Russia: Moscow's WTO Negotiations Come Down To The Wire

Russian WTO negotiator Maksim Medvedkov (file photo) (ITAR-TASS) WASHINGTON, July 15, 2006 (RFE/RL) -- After more than 12 years of trying, Russia may be getting close to overcoming the largest hurdle to joining the World Trade Organization -- agreement with the United States.

Russian and U.S. trade negotiators have been working long hours to finalize a bilateral agreement on Russia's WTO accession.

Last week, Russian President Vladimir Putin warned that if the deal was not finalized, then Russia would stop fulfilling the WTO obligations it had already accepted. However, Georgia has thrown up a new last-minute obstacle. It wants to renegotiate its 2004 bilateral deal on Russia's WTO accession, accusing Moscow of discrimination against Georgian exports.

Until the Georgian announcement, concluding a bilateral agreement with the United States was the greatest obstacle to Russia's WTO bid being passed on to the bloc's 149 members. The U.S. agreement has stalled over issues such as Russia's failure to protect intellectual-property rights.

Tremendous Progress

But Randi Levinas, director of policy and programs at the U.S.-Russia Business Council in Washington, says the U.S. and Russian trade negotiators have made tremendous progress.

"Our negotiators are working extremely hard," Levinas said. "They are consulting very [closely] with U.S. industry, and they are working very hard to get this done. I think deadlines are useful and help negotiators make the tough decisions that need to be made. As a WTO acceding country, most of the decisions are in Russia`s court -- [whether or not] to accept WTO obligations and standards."

According to Levinas, Russia would benefit from WTO membership in at least three ways. First, Russian exports would enjoy greater market access in WTO countries.

"In terms of what participation offers Russia, I think you can point to statements by Russia's own officials, [for example], [Maksim] Medvedkov, who is the lead Russian negotiator for the WTO accession," he said. "He has stated that Russia stands to gain somewhere between $8 billion and $10 billion annually from WTO membership. That's due to expanding sales markets -- just due to reforms and efficiencies that would occur in the domestic economy."

In addition, membership would enhance Russia's international political stature. As a WTO member, it would join the rest of the world's largest economies in the setting of world trade rules.

According to Richard Ericson, a specialist on post-Soviet economies at East Carolina University, an additional benefit for Russia would be the repeal of the Jackson-Vanik amendment, which was passed more than 30 years ago to pressure the Soviet Union to allow the emigration of Jews.

"WTO is going to force the U.S. to get rid of Jackson-Vanik," Ericson said. "If Russia enters WTO, it then must be repealed or we are in violation of WTO rules."

Some of Russia's neighbors, particularly those that are already WTO members, might also gain from Russian membership in WTO.

"It will provide them with a forum with international legitimacy to raise issues," Ericson said. "At this point, they can't go to the WTO about what Russia is doing. They can't go to their arbitration procedures, because Russia is not a member."

Moldova, Georgia Trade Disputes Create Problems

Moldova, Georgia, Armenia, and Krygyzstan are all WTO members. Moldova is asking for Russia to lift its ban on Moldovan wine imports before it signs off on its bilateral agreement with Russia.

Russia has also banned Georgian fruit, vegetables, wine, and mineral water -- actions that Georgia claims are punishment for its pro-Western policies. And now, Georgia is now rescinding its 2004 bilateral WTO accession agreement with Russia, according to a statement on July 14 by Georgia's Foreign Ministry.

According to Ericson, while Kremlin officials have been eagerly seeking WTO accession, not all of Russia's economic players are excited by the prospect.

"A lot of Russians don't agree that it's so important," Ericson said. "A lot of them are afraid that their protected niche is going to be hit hard. But I think the political prestige aspect -- the fact that they then are recognized as a big player -- is probably the driving consideration. Certain of their exporting industries want the protections that WTO will provide."

Ericson reports that while Russia's metals industry favors WTO membership, other economic sectors, such as manufacturing, particularly airline manufacturing, are worried about competition from Europe.

MORE: To read more on this topic from RFE/RL's Russian Service in Russian, click here and here.