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RUSSIA: Eighteen Years of WTO Negotiations Continue

Analysis by Kester Kenn Klomegah

MOSCOW, Apr 25 2011 (IPS) - After almost 18 years of unsuccessful but persistent struggle to join the World Trade Organisation (WTO), experts say that efforts by Russian authorities have not been enough and have often lacked political will.

“Russia’s struggle to join the WTO has been because Russia has had great difficulty in deciding whether it really wants to accept normal WTO disciplines,” Michael Emerson, a visiting lecturer at the Moscow State Institute for Foreign Affairs, told IPS.

Russia, the only major economy outside the global trade body, has been negotiating membership for nearly 18 years, although the average accession period is only five to seven years.

“Russia has come a long way in improving its economy, and by joining the organisation, it will stimulate the economy further for foreign investors,” a senior director at Russian Economic Development Ministry told IPS.

Russian business still only sees the WTO as a threat. Russia’s leaders do not really understand the benefits of membership, but have a clear vision of the limitations that the WTO imposes in terms of public procurement and transparency.

“WTO accession is at the same time an old and a new issue. The agenda of Russia accession to the WTO is a long lasting topic which is still prominent under [Russian President Dmitry Anatolyevich] Medvedev,” Sandra Fernandes, a former researcher on Russia at the Center for European Policy Studies, a Brussels- based academic think tank, told IPS. “This long process of Russian accession to the WTO has been delaying the Russian participation in a set of open market regulations.”

She explained further that the bilateral market access negotiations between the European Union (EU) and Russia for the accession of the Russian Federation to the WTO were concluded in 2004.

Fernandes underlined that the EU is the biggest trading partner of Russia, and that Russia is the third most important partner of the EU.

“The Russian business sector has not been pushing for WTO accession. This sector considers that it does need the trade organisation because it has a zero-sum perspective on WTO accession. Contrarily, the WTO looks for a win-win perspective. Even if recent official declarations point to a will to join until the end of the year, this is not the first time that such calendars are set and not fulfilled,” according to she Fernandes.

Anoush DerBoghossian, spokesperson for the World Trade Organisation, explained in an email from Geneva, Switzerland, that Russia – currently a non-WTO member – is not bound by the organisation’s rules, but once it becomes a full-fledged member it will have rights and obligations.

“In order to be a WTO member, the candidate country would need to follow certain procedures. First, it would need to translate all the WTO law into its national law so that its trade regime falls in line with WTO rules,” DerBoghossian told IPS. “This requires for the candidate country to implement new legislation or amend its current legislation related to trade… Second, the candidate country would have to enter into bilateral negotiations on market access for goods and services. You can see that this process is quite long and technical and that the candidate country is in the driving seat.”

The WTO was established on Jan. 1, 1995, as the successor to the General Agreement on Tariffs and Trade (GATT) that had been operating since 1947. It is the only international body now supervising world trade. The WTO has 153 members, and negotiations on the admission of a new member are held within a working group that unites countries that have unsettled trade problems with the candidate.

As a rule, negotiations focus on four areas: accessibility to the goods market, agriculture, accessibility to the market of services, and systemic matters. The candidate must bring its national laws in compliance with the WTO rules. Two-thirds of votes of WTO members are sufficient for the admission of a new member.

A few more rounds of informal working group consultations are necessary, Russian chief trade negotiator, deputy head of the Economic Development Ministry’s trade negotiations department Maxim Medvedkov said last week.

“We received a dozen of questions from WTO members. There are another seven sections to discuss, including three very difficult concerning technical regulations, veterinary and phytosanitary measures and general legal matters,” Medvedkov said. “We would like to finish the settlement of technical issues within the next few months.”

The next round of consultations will be held in late May or early June, and some of these issues will be on the agenda.

Georgia, a former Soviet republic that has been in political conflict with Russia, has repeatedly threatened to block Russia’s accession to the WTO citing various bilateral disagreements. Russia, however, accuses Georgia of politicising the issue. Tensions between Russia and Georgia came to a head in August 2008 when the two countries fought a brief war over the breakaway Georgian republic of South Ossetia.

Russian Foreign Minister Sergei Lavrov has also alleged that Western bureaucratic hurdles are delaying Russia’s WTO accession. “Our accession is largely being lobbied now in Washington not by bureaucrats, but by businesses,” Lavrov said on Ekho Moskvy radio station.

Another important issue is the long-standing Jackson-Vanik amendment on restricting trade with the Soviet Union, which the U.S. Congress adopted in 1974 to pressure the USSR into allowing emigration. The controversial amendment is still applied to Russia, and has proved a key barrier for the country’s entry to the WTO. The U.S. Congress may terminate the application of Jackson-Vanik to Russia during 2011.

In March, Medvedev voiced hope to U.S. Vice President Joe Biden that the question of Russia’s accession to WTO will be settled this year with energetic support from the U.S.

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