Russia ‘90% of the Way' to WTO Membership, Ashton Says


Russia 's long journey toward membership in the WTO appears to be entering its final stages, although several hurdles must still be cleared before the terms of the country's accession package can be finalised

“We are more than 90 percent of the way there,” EU Trade Commissioner Catherine Ashton said last week. “I firmly believe that the remaining issues can be resolved.”

As recently as last spring, officials expected Russia 's entry into the WTO to be negotiated by the end of the year, but accession talks stalled after conflict flared up in neighbouring Georgia in August. But the negotiations have since been revived, and the EU has pledged to support Moscow 's membership bid. In a further sign of progress, a WTO working group on Russian accession had meetings on Monday and Tuesday of this week.

Russia 's top WTO negotiator, Maxim Medvedkov, has said that disagreements with Georgia , which joined the WTO in 2000, should not prevent Russia from becoming a member, even though a single state can veto another country's accession bid. Mark Franco, the head of the European Commission's Moscow office, said that if the US , the EC, and other countries support Russian accession, it would be difficult for Ukraine and Georgia to stop the process.

This week's WTO meetings come on the heels of a summit between Russian President Dmitry Medvedev and French President Nicolas Sarkozy, representing the EC, in Nice last week. At the meeting, the two leaders agreed to create a ‘road map' for Russian accession in order to smooth out any potential problems that could prevent it from attaining membership.

But some major roadblocks remain. Medvedkov identified three main political issues that could prove to be sticking points in the talks: Russian lumber export duties, the activities of state-controlled bodies, and agricultural subsidies. The EU also raised objections to Russia 's plan to raise duties on imported cars.

“Such a move…would not help the WTO accession process which has just gained momentum following the recent EU-Russia summit,” said Peter Power, spokesman for the EU Trade Commissioner.

But Russia has shown a willingness to negotiate. During the summit the country offered to postpone raising duties on lumber for 12 months, but only in return for being allowed to implement a 9 billion ruble (US$ 328 million) agricultural subsidy. The planned tariff increase had been a major source of contention for Sweden and Finland , whose paper manufacturing industries would have been damaged by the higher cost of raw materials.

But this concession may be only a baby-step towards the many reforms that the Kremlin will have to implement before it can gain membership. Washington is demanding that Moscow privatise its state giants, Baltic members want wood export duties slashed, and the WTO is pushing for cuts to soft-loans to farmers. According to Russian Negotiator Vladimir Tkachenko, “Members of WTO will gain, Russia will probably have to give.”

But Moscow may balk at those demands. “The dilemma is whether we need to join or not,” Medvedev said before the Nice summit. “I think we should, but we should do this on normal terms, not humiliating terms.”

Medvekov echoed the sentiment. “ Russia 's economy will not die without WTO. We have alternative methods of securing our trade policy interests. At the same time we would like to be in and we will be in as soon as our partners will agree that we should join.”

Russia , the 10th largest economy in the world, is the only major economy not included in the WTO.

ICTSD reporting; “WTO to discuss Russia's accession bid on Nov. 24- 25,” RIA NOVOSTI, November 19, 2008; “EU Says Rise In Russia Duties Could Harm WTO Talks,” REUTERS, November 18, 2008; “Moscow, Brussels to Create “Road Map” on Russia's WTO Entry,” INTERFAX, November 18, 2008; “New Round of WTO talks eye January 2010 accession,” RUSSIA TODAY, November 24, 2008; “Ukraine, Georgia will not hamper Russia's WTO entry, says EU official,” KYIV POST, 18 November, 2008; “WTO odyssey approaching final straight?” RUSSIA TODAY, November 10, 2008.