Double talk- time to get Avian results

By Douglas Busvine

ST PETERSBURG, Russia (Reuters) - Russia and the United States failed on Saturday to strike a bilateral deal allowing Russia to join the World Trade Organization but agreed to set a deadline to wrap up talks within three months.

Negotiators who have been discussing Russia's 13-year-old WTO bid virtually non-stop since Wednesday were unable to achieve a final breakthrough on a key "deliverable" ahead of the Group of Eight summit in St Petersburg.

"There is more work to be done," President George W. Bush told journalists after meeting summit host Vladimir Putin. "The intention to achieve an agreement is there."

U.S. Trade Representative Susan Schwab negotiated into the early hours on Saturday with Russian Economy Minister German Gref, but the two sides ran out of time.

"It's a complex process," Putin told a joint news conference with Bush. "We will continue to talk while standing up for our interests."

The talks made breakthroughs on financial services and defense of intellectual property rights, but foundered on the relatively minor issue of safety inspections on U.S. exports of frozen beef and pork, Gref said.

"I expect this problem can be solved by the end of October and we will be able to sign a deal," Gref told reporters, adding this would enable Russia to seal entry terms by next spring.

Schwab said the two sides were drafting a "blueprint" aimed at reaching a final deal within two to three months

"We've made significant progress, in fact virtually closed the industrial tariff side, virtually closed the services side, excellent progress on intellectual property rights and very close on agricultural issues," Schwab said.

Russia is the largest country outside the 149-member trade club, and a bilateral deal with Washington would remove the last major obstacle to its accession.

The failure of the bilateral WTO talks is likely to undermine efforts by G8 leaders here to revive the stalled Doha round of global trade talks.

WTO chief Pascal Lamy was due to brief the G8 on the Doha round, which must reach agreement soon or fail, as Bush loses his power to "fast track" trade deals in mid-2007. Britain and Germany are pushing hard on the issue.

CONGRESS KEY

Rampant video and music piracy in Russia has infuriated the U.S. entertainment industry and, ahead of mid-term elections this autumn, top U.S. Democrats have lobbied against Russia's WTO bid.

"We're tough negotiators," Bush said. "The reason why is that we want the agreement we reach to be accepted by the United States Congress."

Twenty Senate Democrats published an open letter this week expressing "serious concerns" over the possibility of a Russia-U.S. WTO deal, which would require the approval of U.S. lawmakers to take full effect.

As its part of any pact, the United States would have to provide Russia the same tariff treatment all other WTO members enjoy. This would require Congress to grant Russia "permanent normal trade relations".  

Gref said the theme of intellectual property had been closed and would not be reopened, under a road map which would allow the multilateral WTO admissions procedure to run parallel to the Russia-U.S. bilateral talks.

He cautioned that Russia's WTO bid could fall prey to electoral politics if there was any further delay. Both Russia and the United States hold presidential elections in 2008.

"If we don't close the talks next spring we will fall into the election cycle. It will be our last chance," said Gref.

(Additional reporting by Darya Korsunskaya and Steve Holland)