Becoming a Russian Oligarch After Rebirth
Chapter 1291 - 1045: Stick to the Bottom Line_2

Chapter 1291: Chapter 1045: Stick to the Bottom Line_2

"Whoever dares to play against them is playing with fire. They are expert at this game," Wang Ye knew. In his former life, after many years, only one country had grown strong enough to wrestle with the United States over food prices.

Of course, this life was different with Wang Ye’s involvement. Having realized the importance of food early on, he aggressively consolidated all the resources of the Commonwealth of Independent States in the agricultural sector. Perhaps in a few years, they might also be able to wrestle with the United States over food prices, but that was a story for another time.

Now, the United States was taking advantage of Russia’s desire to join the WTO to strike at Russia’s agricultural industry.

They probably knew that Russia had already begun to prioritize agricultural development. The later they opened up the agricultural products sector, the harder it would be for the major US grain merchants to control Russian agriculture.

Therefore, the United States was actually more eager for Russia to join the WTO than Russia itself...

However, as a mandatory condition for joining the WTO, Russia still had to open up its agricultural sector and allow foreign investment.

On this point, Wang Ye could agree in principle, as joining the WTO meant not only reaping benefits but also making contributions, since benefits come from exchange.

But openness had to be conditional and phased!

It was not possible to join the WTO and immediately open up all industries and sectors to foreign capital unconditionally; doing so would truly disrupt the national economy.

Some less important and non-sensitive industries could be opened up immediately without any restrictions.

However, the opening up of some sectors had to be gradual, loosening a little each year until they were fully open several years later.

For example, for agricultural products, when they first joined the WTO, a 50% tariff would be imposed on foreign agricultural imports. This would not give US agricultural products any price advantage, thus protecting domestic agricultural development.

Then, each year the tariff would decrease by 2%, reaching zero tariffs after 25 years!

This was essentially providing a buffer period for domestic agricultural development.

Certain industries related to national security issues, however, could never be opened up!

...

Negotiations with the European Union were a bit more complex since some member countries within the EU were against Russia joining the WTO and intentionally set up obstacles.

But a few leading countries in the EU, especially France and Germany, still agreed to Russia joining the WTO, albeit hoping to leverage this opportunity to extract more concessions from Russia.

Their demands mainly focused on energy, seeking cheap and stable energy supplies from Russia, especially natural gas!

Since the year 2000, the EU had been negotiating with Russia over energy supplies and, after several years of back-and-forth, had basically established a framework, namely the so-called "North Stream Pipeline."

In fact, during the Former Soviet Era, Russia already had a pipeline delivering natural gas to Europe. This pipeline passed through Ukraine, then reached Austria and Romania, and spread to other Western European countries.

However, the capacity of this pipeline was limited, and now it was clearly insufficient to meet the natural gas demands of so many countries.

Even just Ukraine’s own demand took up most of the pipeline’s capacity!

Thus, the need for constructing another pipeline was urgent.

The newly proposed "North Stream Pipeline" plan would start from Russia’s Vyborg Fortress area, directly crossing the Baltic Sea, running through the seabed all the way to Greifswald, Germany.

This was essentially a "point-to-point" direct supply service, without middlemen making a profit!

Furthermore, the North Stream Pipeline project was divided into two phases and was extremely large in scale.

Once completed, it would fully meet the natural gas needs of multiple Western European countries, making it a win-win choice.

Russia’s abundant natural gas resources could then be sold off, bringing in large amounts of foreign exchange to invest in domestic infrastructure, support other industries’ development, and improve livelihood issues.

Western Europe, in turn, would have a stable and affordable natural gas supply, not having to bear exorbitant energy costs, and could also promote the re-development of their industries.

Natural gas is not just for civil use; the industry also requires a large amount of it.

Of course, although both parties are aware that whether the North Stream Pipeline project is signed will directly affect whether the European Union supports Russia’s accession to the WTO,

publicly, no one would admit to it.

So, whether the deal on the North Stream Pipeline can be finalized before the opening of the Sixth Ministerial Conference of the World Trade Organization will directly determine whether Russia can join the WTO this year!

Wang Ye was well aware of this.

The current disagreement between the two sides is about how much money each party should invest in the pipeline and how many shares each should hold!

Considering the previous super Oil and Gas Contract negotiated by Wang Ye and the Chinese side, the Russian side naturally hopes that Germany fully finances the pipeline construction, then Russia controls the pipeline company, and Germany just needs to pay the natural gas fees annually.

However, Germany was not as accommodating as China had been; they demanded that the construction funds for the pipeline be split evenly between the two, with both parties holding shares and co-managing the pipeline company!

Thus, the two sides reached a deadlock on this point, and negotiations had not been settled for years.

Previously, these pipeline negotiations had always been led by the government, with the Russian Gas Industry Group and the Pipeline Group involved, not much concerning Wang Ye.

But now it was different because whether this cooperation could be negotiated successfully was directly related to the upcoming WTO accession negotiations.

Thus, Wang Ye forcefully took over the leadership of the negotiations from the government and started leading them himself. Although the government had some reservations, they could not really say much.

After all, they had been unable to finalize the cooperation.

Add to that the fact that Medvedev and Wang Ye had a good relationship, with the top government official not saying anything, those below naturally had even less to say.

Frowning in contemplation for a moment, Wang Ye instructed, "We must stick to our bottom line, but on aspects that are less crucial, concessions can be made. When negotiating with Germany again, we absolutely must control the pipeline company—that point is non-negotiable. But as for the investment in building the pipeline, that can be negotiated; splitting it fifty-fifty is the maximum concession!"

In reality, Wang Ye was not short of funds right now, neither was the Russian Gas Industry Group, and even if all pipeline construction costs were covered by the Russian side, it would not be a problem.

After all, even if Germany fully financed the pipeline construction, the cost would be deducted from future natural gas fees, just like the clauses in the previous China-Russia Oil and Gas Contract.

But, that’s not how business is negotiated, and the situations in China and Germany are entirely different...

This involves a hidden issue: the pipeline construction typically spans three to five years, which is a prolonged timeline.

What if the circumstances change during this construction period, and one party reneges?

Certainly, Russia wouldn’t go back on its word, as they are the ones selling the natural gas; there’s no scenario where they wouldn’t want to make money.

But the situation with Germany is not so certain; what if a few years down the line, once the pipeline is nearly completed, Germany suddenly says they won’t buy Russia’s natural gas?

This might seem unlikely, but in fact, such situations are not uncommon.

After all, Western European countries are based on an electoral system, and there’s no guarantee that the individuals you reach an agreement with today will still be in office after the next election.

What if the new administration loses the election, and someone from an opposing faction comes in and immediately wants to overturn all contracts and agreements signed by their predecessors?

Then Russia, having fully funded the pipeline construction, would be left at a loss...

So, the best and safest course of action is to have Germany fully fund the construction, or at least pay half. That way, the tens or even hundreds of billions of US dollars in real money already invested would most likely not be gambled away by any political changes in Germany...

Even if the successors dare to take that risk, they would have to consult the German enterprises that made the initial investment!