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Putin, Key hopeful for Free Trade Agreement

Sunday 9 Sep 2012 7:16 a.m.

By Political Editor Duncan Garner in Vladivostok

Russian President Vladimir Putin has told Prime Minister John Key he "hopes" a free trade agreement with New Zealand will be signed but neither party can say when.

And in a sign that negotiations are fraught and getting harder, Mr Putin says concluding a deal is far from easy.

“It isn’t a simple matter, but I can assure you we are determined to bring this work to successful completion and I hope it will be done,” says Mr Putin.

“We need to find solutions to all issues that are impeding an FTA. Once again it is a difficult process that requires the ability to compromise but we need and must find compromise," says Mr Putin.

Mr Key and Mr Putin met last night for 30 minutes and afterwards Mr Key said the deal wouldn’t be finalised this year and it was only a “possibility” that it could be signed next year.

The positive signal from Mr Putin is what New Zealand was looking for at this APEC summit, but the delays in signing the deal show just how difficult it is for heavily subsidised countries like Russia to get these trade deals over the line.

Mr Key says New Zealand wants a high quality deal, otherwise it’s not worth it.

A high quality deal means reducing Russia’s high tariffs and subsidies on our agriculture products coming into the country, but Mr Putin needs to convince his voters it’s worth it.

Russia has a growing middle class and new found wealth in minerals and opening up this market of 140 million Russians could signal a windfall new market for Kiwi farmers.

It’s likely Russia will want to stage the removal of tariffs over time, like the free trade agreement New Zealand signed with China in 2008.

Earlier Mr Putin had kept Mr Key waiting almost two hours for the meeting after getting caught up hosting other APEC events. Russian journalists say he is always fashionably late for meetings.

Mr Key was not worried about the delay in getting the meeting underway.

APEC wraps up later today after the leader’s retreat. Mr Putin says this APEC is about building bridges for the future but he admitted last night the world economy was weak.

“The recovery of the global economy is faltering,” he told leaders as they gathered in Vladivostok.

His concerns come on top of the negative sentiments aired by some of the world’s top chief executives a day earlier who agreed the world economy was struggling and getting weaker.

Mr Putin says one of the answers is to break down barriers to trade and open up markets.

Although, as New Zealand is finding out, that’s easier said than done for big countries like Russia, Japan and America, which despite their rhetoric at this APEC meeting, are still some of the most heavily subsidised countries in the world, along with greater Europe.

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