By Kester Kenn Klomegah
MOSCOW, Jul 12 2006 (IPS)

The G8 summit in St. Petersburg this week is expected to take Russian membership of the World Trade Organisation a step closer.

“By now Russia has completed negotiations with the overwhelming majority of interested WTO (World Trade Organisation) members, and has introduced into its laws all provisions reflecting its future commitments under the WTO,” a senior official at the Russian Ministry of Economic Development and Trade told IPS.

“Certainly, some issues remain to be solved in forthcoming negotiations but world leaders participating in the G8 summit have on different occasions supported Russia’s early accession to the WTO,” the official added.

Russian officials had been trying earlier to secure WTO membership before the summit of leaders from the G8 countries (the United States, Canada, Britain, France, Germany, Italy, Japan and Russia). But it might not happen that soon now.

U.S. President George W. Bush has indicated he wants Russia in the WTO sooner rather than later – a position reiterated by outgoing U.S. treasury secretary John Snow at a G8 finance ministers’ meeting in St. Petersburg last month.

“During all the last months we are in permanent dialogue with our U.S. counterparts on remaining issues in bilateral WTO accession talks, and the list of unresolved problems is shortening,” Snow said.

But Russia still has major areas of difference with the United States. It especially wants to limit market access to foreign companies for financial services.

U.S. officials say Russia has yet to remove some remaining obstacles before its full acceptance into the 149-member trade organisation. But it has signed bilateral protocols with 57 members from the 58-member working party on its accession to the WTO.

The United States has long insisted that Russia strengthen protection of intellectual property rights, and make concessions in opening up the agricultural and financial sectors.

It has further demanded that Russia drop protective measures that bar foreign banks and insurance companies from operating wholly owned branches. But Russia wants to protect its fragile financial sector, and restrict foreign competitors.

“We are working to shape the leaders’ statements in a way that encourages Russia’s embracing of democratic and free market principles,” a U.S. diplomat said. “We are close to concluding our WTO bilateral market access negotiations, but there are issues yet to resolve. We have been working with our Russian partners on solutions, and in most cases we are very far along.”

The Russians in turn want the U.S. government to do more. “We expect that the U.S. authorities adopt some flexible approach towards this protracted issue to give Russia an international stamp by facilitating the procedures,” Viktor Supyan, deputy director of the Institute of USA and Canada under the Russian Academy of Sciences told IPS.

“Russian negotiators have worked hard and there are noticeable signs that Russia is prepared to reform it economy better and to enjoy its associated economic benefits,” Supyan said.

President Vladimir Putin who will host U.S. President George W. Bush and other world leaders at the G8 summit Jul. 15-17 has made WTO accession a key policy priority. But his patience might be running out.

Russia will stop honouring its commitments to the WTO if it is not accepted as member, Putin said at a meeting recently with representatives of the International Chamber of Commerce-World Business Organisation.

Putin said the United States was “artificially pushing back the negotiating process” by submitting a list of areas for “additional negotiations.” He said these issues would be on the agenda at the summit.

Putin said Russia has adopted a number of laws to protect intellectual property. But problems in this area affect not only Russia but other countries as well, primarily those with developing economies, he said.

“The United States is the only country we have been unable to agree accession terms with. If for some reason we are unable to reach agreement (on WTO accession) then we’ll stop being bound by the commitments that we have not only accepted but which we are honouring while we are not even a member of the organisation.”

Putin added that in many ways the Russian economy is more liberal and open than that of many countries who have been members of the WTO for a long time. He was dismissive of “attempts to negotiate a protocol in accordance with U.S. legislation, rather than with WTO rules.”

Sergey Prikhodko, an aide to Putin, told media representatives that Russia’s acceptance into the WTO might not come before the G8 summit. “In principle, there is such a possibility, but it will not be a tragedy if the final deal comes later.”

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