The first draft of the entry report will be finished by the end of March, according to Russia's chief WTO negotiator Maxim Medvedkov, with detailed discussions scheduled for the 17th of June. The June meeting will play a key role in determining the acceptability or otherwise, of the conditions that Russia is being asked to meet for accession. Although Medvedkov stated that many of the reforms seen as being conditional to entry, will soon be implemented, citing the new customs regulations as an example of such reforms.

Russia will be able to join the WTO by the end of 2003, according to the head of the working group, although WTO Director-General Mike Moore was even more optimistic on the 24th Janaury 2002, reiterating his view that a spring-summer 2003 accession was still feasible and emphasising President Putin"s personal interest in seeing Russia join the WTO.

For those looking at the WTO process in detail however, accession in 2003 still remains a tough target despite the recent positive negotiations. The Kremlin is however, committed to the process, so the answer may lie in its terms of moving ahead on the liberalisation of such areas as customs duties and the speed with which they are undertaken. The recent reports of pressure on the head of the Customs Service Mikhail Vanin, give cause to believe that the government is seriously committed to the process and that it sees the recent rapprochement with the US, as a window of opportunity where entry to the WTO may be gained without having to concede too much.

For the aerospace industry the outcome of the talks remains of critical importance, with recent comments and statements from government sources suggesting that with the exception of a few key areas such as aircraft production in the same segment as the Tu-204, considerable easing of duties related to the import of both aircraft and components is being discussed and may be conceded by the authorities.

A report for the Presidential Administration from the Ministry of Economics and Trade Development and the Ministry of Transportation delivered in October 2001, appeared to recommend cuts across the board, but left some ambiguity regarding which areas would be exempt. As it was implied that segments of the market were a Russian product was in serial production would retain customs protection.

With the exception of the Tu-204, it is difficult to describe any civil aircraft as being in serial production, although how liberally this distinction may be drawn only time will show. The easing of customs duties may also pose something of a 'Catch 22' dilemma for the government, given that access to foreign imports is essential in making some of the current programmes viable. The government is therefore likely to fudge taking any definitive stance. The expectation must be that the definition of serial production, may be cast fairly widely and potentially include 100 seat aircraft where the Tu-334 continues to stumble along. Operators however, have little expectation of early introduction of the aircraft despite the pressing need for such aircraft.

For those however, who are optimistic about comprehensive and immediate change in the customs and tariff environment for the aerospace industry, we would counsel caution. Change will undoubtedly occur, given the pressure from carriers in particular, and from those foreigners who would invest in the industry. There is however, a significant political difference between the authorities making short term concessions on the import of TVs and consumer goods, to finally acknowledging that there is not a viable future for large sections of the industry worth rendering protection too, and finally closing the door on it.