MOSCOW, July 5 (RIA Novosti) U.S. expects to monitor Russia's nuclear forces/Chinese exports may "bury" some sectors of Russian economy - experts/Deripaska set to take over Ford Motor Co.'s luxury car division/Rusal divests itself of one more non-core asset
Nezavisimaya Gazeta
U.S. expects to monitor Russia's nuclear forces
The first feasible result of the Russian-American summit at Kennebunkport has been an agreement between Russia and the U.S. to cut their nuclear arsenals further.
However, Moscow may ultimately lose the ability to verify Washington's strategic and anti-missile potential.
The need to keep the verification mechanism in place, as stipulated by the Strategic Arms Reduction Treaty (START) of 1991, is clear.
The Strategic Offensive Reductions Treaty (SORT), concluded in 2002 and providing for a ceiling of 1,700-2,200 "deployed" warheads for each party by 2012, has practically no teeth without it.
Washington and Moscow have already announced their intention to hold negotiations to prepare for START's expiry in 2009.
"Putin and Bush have prevented a slide toward a new Cold War," Sergei Rogov, director of the U.S. and Canada Institute of the Russian Academy of Sciences, said.
In his opinion, it is time for some sort of military-political bargaining to begin. The analyst believes the chances for a new agreement under the present Bush administration are "50-50."
Moscow's desire is to have no American anti-missiles in Eastern Europe nor a radar capable of scanning all of European Russia, said Colonel General Viktor Yesin, former chief of the main missile strategic force headquarters.
By way of reward, Washington has been offered a few carrots - data from radars outside Armavir and in Azerbaijan's Gabala, and the establishment of missile launch information exchange centers in Moscow and Brussels.
The expert thinks the Americans are willing to "eat the carrots," but that they are not going to abandon their third positioning area for their strategic missile defense system in Poland and the Czech Republic.
According to Yesin, the Russian side is seeking to keep control over strategic arms reductions.
The American side seems to be of the same mind, but interprets monitoring after its own fashion. The Americans, the general said, consider the we-are-no-longer-enemies argument an unbeatable ace.
Why, they ask, should we need such verification procedures, as stipulated in the START treaty, when we are not enemies?
The U.S., in the expert's view, expects to be able to monitor Russia's strategic nuclear forces through the Nunn-Lugar program, which this year was extended for another seven years, but it does not want to let Russians do the same on its territory, and will not agree to include such a procedure in any new agreement.
Vedomosti
Chinese exports may "bury" some sectors of Russian economy - experts
Given state support, Chinese exporters may "bury" some sectors of the Russian economy, including the entire engineering sector, experts of the Institute of Natural Monopolies Research (IPEM) said.
The authors of the IPEM report propose to start anti-dumping and anti-subsidy investigations and take regulatory measures that would hinder the operation of Chinese companies in Russia.
"The expansion of Chinese products has already created a tangible threat to the development of the entire Russian engineering complex," Yury Saakyan, IPEM's general director, told Vedomosti.
"A crisis situation is also developing in the metallurgical, chemical and petrochemical industries," he added.
Chinese exports are also a threat, though not a catastrophic one, to the Russian automobile industry, considering the low quality of Chinese automobiles, said Vladimir Torin, press secretary of the Russian automobile giant GAZ Group.
According to Alexander Zhukov, an analyst with the Metropol investment company, Chinese automobile manufacturers will increasingly compete with Russian producers, although they will not be able to completely displace the Russian automotive sector.
The authors of the report propose making use of Western experience in order to protect the Russian economy, i.e. introducing import quotas, anti-dumping measures, and voluntary export restrictions.
It is also proposed abolishing the preferential trade regime, because it helps Chinese exporters avoid anti-dumping and anti-subsidy investigations, and because the Russian system of preferences was designed to support developing nations, whereas China can no longer be considered as such, Saakyan said.
The IPEM experts said Russian state-owned companies and natural monopolies should give priority to the purchase of Russian producers' goods and introduce tax cuts for leasing companies purchasing Russian equipment.
Many proposed measures - for instance, import quotas - are contrary to the obligations Russia must assume when joining the World Trade Organization, said Yaroslav Lisovolik from Deutsche UFG.
Therefore, in its fight against Chinese exports, Russia will have to rely mostly on anti-dumping and regulatory measures that have not yet been properly developed.
Gazeta.ru
Deripaska set to take over Ford Motor Co.'s luxury car division
Magna International, a Canadian company manufacturing and selling car components, said it wanted to buy the loss-making luxury car division of auto giant Ford Motor Co.
Russian billionaire Oleg Deripaska, owner of Russian Machines company and co-owner of Magna International and Russian automaker GAZ Group in Nizhny Novgorod, will vie with Cerberus Capital Management, one of the world's leading private investment firms that recently bought troubled U.S. carmaker Chrysler from auto giant DaimlerChrysler, for the right to manage Land Rover, Jaguar and Volvo assets.
Russian producers are doing their best to revive the hard-pressed national automotive industry, which lacks state-of-the-art technologies.
They are following the example of China, which buys loss-making European luxury car brands, and are eyeing other troubled brands offered by major automotive concerns.
The online Autocar Magazine said Oleg Deripaska, who owns an 18% stake in Magna International, wanted to buy Land Rover, Jaguar and Volvo luxury car brands, now receiving components from the Canadian company.
Ivan Bonchev, head of automotive services at International Audit and Consultancy Company Ernst & Young, said Deripaska would acquire several major European luxury car brands if the deal were closed.
In the long-term, GAZ would be able to utilize ample foreign experience, Bonchev told the paper.
Although it is still unclear whether Magna International can buy Ford's premium car division, Deripaska has already lured several experts from other companies.
Andrzej Kasperek, former vice president for corporate strategy and business development at Volvo Car Corporation, who has worked for Volvo, Jaguar and Land Rover since 1989, was recently appointed director for development, mergers and acquisitions at GAZ Group.
Two years ago, Eric Eberhardson, former vice president at Volvo Construction Equipment CIS, was appointed GAZ Group CEO.
Gazeta
Rusal divests itself of one more non-core asset
Rusal is selling off its subsidiary, Rostar, to its direct rival, British Rexam, for $297 million (including Rostar's debts). The British rival will now be able to consolidate 98% of the Russian market for aluminum cans.
United Company Russian Aluminum (UC Rusal) was set up through a merger of Russian aluminum giants RusAl and SUAL with Swiss raw materials supplier Glencore in March 2007.
Yury Shitov, commercial director of Rexam in Russia and the CIS, said: "Financial and legal aspects of the transaction will be settled within eight weeks, and structural issues in the next few months."
Rostar, which was not incorporated into the united company, has become a non-core asset. It stopped processing and focused on production of raw materials and primary aluminum.
Before the merger, Rusal sold two of its companies that produced rolled aluminum to North American Alcoa.
Yevgeny Ryabkov, an analyst with the Antanta Capital investment company, said: "Rusal has decided to focus on the production of primary aluminum, which is good only when you also produce raw materials."
There was a conflict of interest between Rusal's commodities and packaging businesses. In 2006, growing aluminum prices secured the growth of the parent company's revenues, but delivered a heavy blow to Rostar, which had to buy rolled aluminum from non-allied companies.
Rexam, which holds more than 40% of the European market, expects a synergetic effect worth $20 million from the deal, Shitov said.
As of now, it accounts for 45%-48% of Russia's aluminum can market. Together with Rostar's 50%, Rexam will take over 98% of the market, becoming "the only producer of aluminum cans in Russia," the manager said.
The Federal Anti-Monopoly Service has not yet approved the deal.
"We have not received the requisite documents from the companies," said Alexei Ulyanov, head of the service's industrial control department.
"The deal could be approved if the companies involved comply with the requirements and prove that their transaction will have a positive economic effect," he said.
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