The U.S. White House's chief economist, Alan Larson, urged Russia on Wednesday to support U.S. proposals to eliminate agricultural subsidies around the world, stressing it would help Russia's bid for World Trade Organization (WTO) accession.

"One of the things that could make the negotiations of an agricultural component to the accession package easier would be for Russia to offer support to U.S. proposals to eliminate agricultural-export subsidies, domestic subsidies and market-access barriers," Larson said at a conference organized by the American Chamber of Commerce in Moscow.

The U.S. undersecretary of state for economic, business and agricultural affairs was urging Russia not to increase subsidies for Russian farmers in response to protectionist policies used by the majority of countries around the world.

"My point is to stress how strongly the United States feels that we ought to bring protection down and bring these subsidies down globally," he said.

Among Organization for Economic Cooperation and Development (OECD) member states, farm subsidies account for almost $1 billion per day. In 1999, experts say $126 billion was spent by the EU on supporting its farmers. Russia simply cannot match this sort of protection, Larson added.

"I don't think the budget committee or [Finance Minister Alexei] Kudrin are going to be able to produce the revenues that would allow Russia to subsidize agriculture on the scale of the EU," he stressed.

This makes perfect sense to John Shmorhun, manager of Dupont Eastern Europe, the largest seed company in the world, which has been operating in Russia for nearly 30 years.

The scaling-down of agricultural subsidies in Russia would take a significant strain off the Russian budget, Shmorhun said.

"If a farmer buys Russian herbicide, 30 percent of the price of the herbicide is subsidized. This is inherently corrupting," he explained.

However Yevgenia Serova, president of the Analytical Center on Agrifood Economics, said the United States urging Russia to lift farming subsidies is rather a case of pots, kettles and name-calling.

"It is funny to hear this from the American side after the new farm bill that allocated $20 billion to assistance in agriculture. It is not really very fair."

Serova was referring to the notorious U.S. Farm Bill, which was passed in May this year, subsidizing U.S. cotton and grain farmers by $360,000 per farmer per year.

She argued that, despite popular beliefs to the contrary, Russia has one of the most liberal agricultural industries in the world.

Russia's Product Support Estimate (PSE), which is a conventional measurement of agricultural support that calculates the price gap between domestic and world prices, is the fifth-lowest among OECD member countries, at only 9 percent. The higher the PSE, the greater the subsidies.

The PSE of the United States is more than 20 percent, while the EU's is more than 30 percent.

In response to a question about "sector problems" facing Russia on the road to WTO accession, in addition to agricultural subsidies, Larson said the U.S. administration is convinced services and intellectual-property rights are especially pertinent issues in Washington's eyes.

"[Services] support the rest of the economy, and without a modern state-of-the-art services industry, it will be very hard for Russia's manufacturing and agricultural sector to be globally competitive," he said.

Cliff Gauntlett, managing director of ROL, a subsidiary of Golden Telecom, a telecommunications company operating in Russia, claimed the telecoms industry would play a pivotal role in Russia's economic future.

"The tremendous costs associated with the badly needed upgrade of transportation services will force the communication-services industry to become a vital link in the growth of the economy," he explained to The Russia Journal.

Larson also emphasized the importance of intellectual-property rights in any knowledge-based economies, such as those of the United States and Russia.

"In such an economy, if you can't protect your knowledge with intellectual-property rights, you suffer greatly," he said.

"We appreciate the direction of [intellectual-property rights] policy in Russia, the legal regime is getting better, the laws are in the process of being enacted in the Duma… We will be looking for a very strong agreement on intellectual-property rights."

In the next few days, President Vladimir Putin is expected to sign Russia's breakthrough trademark law, approved by the State Duma and the Federation Council last month. This law is central to meeting the legal requirements of WTO accession.

For the Coalition for Intellectual Property Rights (CIPR), Larson's comments are music to the ears.

Alexander Shelemekh, vice president of the CIPR, agreed that there is now a genuine will in the government to improve intellectual-property rights, and the Trademark Law is a testimony to this, but the focus must now turn to law enforcement.

"The legal framework is about to be put in place, but practical implementation is still a concern," he said.

"We have to see practical steps on the side of the government and representatives of the private sector. This includes foreign companies."