Trade Chief Seeks to Keep Oil Quotas

Russian Foreign Trade Minister Oleg Davydov said Thursday that his ministry has proposed postponing the removal of restrictions on oil exports until next year.


While most other Soviet-era restrictions on the export of raw materials are due to expire Friday, Davydov said that the oil-export quotas should be preserved in order to avoid chaos and the redrawing of previously signed contracts.


Those are the two things over which oil exporters have fretted since President Boris Yeltsin issued a decree in June that eliminated export quotas.


Davydov said his ministry has put up for discussion by the cabinet a list of quotas that should not be lifted.


He was certain the government would preserve restrictions on the export of arms and materials that can be used to produce nuclear, chemical and biological weapons.


He also argued that the government should retain control of exports and quickly reimpose restrictions if exporters infringe on the country's strategic interests.


"Say the harvest is beginning and everyone is taking diesel fuel out of the country because it fetches a better price overseas," Davydov said.


"We have to get the grain in somehow, so the government must keep some control levers."


Davydov said that exporters will have to register their contracts with the Foreign Trade Ministry. He added that while the ministry will not initially have the right to veto a contract, it will be able to step in should the need arise.


Davydov said Russia expected that lifting the restrictions will result mainly in boosting the export of raw materials.


"We export raw materials because that's all we have," he said. "Our goal is to use the increased revenues from these exports to finance the country's industry so that it could produce exportable goods in the future."


The partial lifting of export restrictions is in line with the trade agreement Yeltsin signed with the European Union a week ago in Greece.


While both sides decided to remove Cold War-era export barriers, Russia has retained the right to limit EU imports.


"We couldn't give the West equal conditions in terms of imports," Davydov said. "Our economy is still in a transitional stage and it isn't strong enough yet. Throwing the markets wide open would harm Russia's interests."


Davydov acknowledged that the inequality had made negotiations difficult.


It took Russia and the EU over two years to reach the agreement, which is a step toward Russia's accession to the General Agreement on Tariffs and Trade, an international agreement to which all EU nations belong.


According to Davydov's deputy, Georgy Gabunya, once Russia joins GATT it will have to relinquish the remaining trade restrictions. He said that according to the agreement with the EU, Russia had the right to reject 10 percent of the general volume of imports from the union but hoped to gradually accept more imports.


On the part of the EU, the remaining barriers to Russian exports were caused by fear of dumping, Davydov said. Europe has kept some restrictions on the import of Russian textiles and steel and negotiations continue on special agreements which will cover these fields.


While the full enactment of the trade agreement will require changing the laws of both Russia and the EU countries, a release circulated by the Foreign Trade Ministry said that a temporary agreement is expected to come into effect in the fall pending the ratification of the treaty by the member countries' parliaments.