Economy & Trade, Europe, Financial Crisis, Headlines

TRADE: Russia Joining, Joining…

Kester Kenn Klomegah

MOSCOW, May 30 2009 (IPS) - After years of negotiations on joining the WTO, Russia is still far from meeting the requirements set forth by the organisation.

Russia has been negotiating entry into the World Trade Organisation (WTO) the global trade institution that regulates trade, for more than 15 years. Following another round of talks in Geneva May 25-29, WTO officials say they would like to see Russia join the organisation as soon as possible, but acknowledge that problems still exist.

“For Russia there are some problems in both the bilateral and multilateral negotiating arenas,” WTO spokesman Keith Rockwell told IPS on email. “Bilaterally there is some political opposition – Georgia has concerns about its relations with Russia – but there are also other countries with some commercial concerns related to energy services, textiles and some other products. Multilaterally there remain many problems.”

Some progress was reported at the talks, and further talks have been scheduled with the EU and with the U.S.

Russia is simply not ready for the strict multilateral trading system, some analysts say. “Some areas of business were and, in a certain sense, still are not mature enough to compete on the base of the WTO rules and regulation, for example, banking and insurance services,” Tatyana Isachenko, WTO researcher at the Moscow Institute of International Relations (MGIMO) told IPS.

Contradictions between Russian national interests and foreign partners’ interests, as well as political problems in relations with some neighbouring countries, remained unresolved, Isachenko said.

But it is not pragmatic for Russia to stay outside the WTO, and besides, world trade rules could hardly be formulated without Russian participation, Isachenko says.

“The process will be faster if all our partners in the negotiations understand the importance of it clearly,” Maxim Medvedkov, Russia’s WTO negotiator told IPS in an email interview.

Problems such as intellectual property rights and agricultural subsidies still exist in Russia, but this is no worse than in some other countries that were allowed into the global trade organisation, Medvedkov said.

A WTO working group will take up Russia’s proposals on unresolved issues, in particular domestic agriculture subsidies, Medvedkov said. There are also around 15 to 20 technical issues that are unresolved, but where substantial progress has been made, he said.

Russia has concluded the necessary bilateral negotiations with 60 interested countries, but has yet to agree positions on issues such as agriculture, export duties for timber, and regulation of the activities of some state companies.

Russia is the world’s only major economy still outside the WTO. It had expected to join the 153-member body by the end of last year, but the accession process has dragged on due to political and economic delays.

Russia’s accession stalled after the United States put the issue on ice over Russia’s military incursion into Georgia in 2008. Now, the new U.S. administration has grown warmer to Russia’s bid, allowing it to move ahead with accession plans.

President Dmitry Medvedev says Russia would like to join the global organisation but that the process should not be endless.

“Our position on joining the WTO is the same, it has not changed, and it is the following: the Russian federation is ready to join on normal, non- discriminatory conditions. We have done all that is necessary. This process has been drawn out, and this irritates us,” Medvedev said after talks last month in Moscow with Chilean President Michelle Bachelet, who reaffirmed Chile’s support for Russia’s membership of the WTO.

“The key thing is that this (process) does not turn into an endless story,” Medvedev said.

A source at the international cooperation and organisation department of the Russian Foreign Ministry told IPS that “despite the continuing doubts in certain circles, the earliest accession to the WTO is an invariable priority of Russian foreign policy, and perhaps, in the period of the economic crisis it is better to be outside the WTO, but we look to the future and realise our international responsibility – hence our principled stand on the WTO.”

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