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Russia’s on-again, off-again, bid to join the WTO will be discussed again in November, but expectations are low for a quick solution.
In the wake of wide-spread Western criticism of its actions in the Caucasian crisis, Russia announced in August that it would withdraw some commitments it had undertaken during its 15-year quest for WTO membership (Bridges Year 12 No.4 page 12).
After informal talks held with key trading partners in September, Russia’s chief negotiator Maxim Medvekov said his government would not backtrack on agreements already submitted to the WTO secretariat. It could, however, stop honouring certain bilateral concessions made in the course of the accession negotiations, mainly in the area of market access for agricultural products, including chicken and beef. Mr Medvekov proposed to start consultations with trading partners on the changes Russia was seeking. He characterised the response as ‘diplomatic’, but gave no further details.
Few countries spoke at the brief informal meeting of the working party on Russia’s WTO accession held on 18 September, and no one brought up the Georgian conflict. Members tentatively scheduled another meeting for early November to advance negotiations on unrelved topics, such as export duties, state trading enterprises and domestic support in agriculture.
US, EU Weigh Course of Action
US Ambassador to Moscow John Beyrle told the Interfax news agency on 22 October that his country still considered Russia’s WTO membership very important as a ‘strategic matter’, but added that it would take “concerted action by the Russian government to overcome the last obstacles.” Specifically, he said the US was hoping that WTO Members would not have to “go back and renegotiate understandings we thought were settled already.” A month earlier, Secretary of State Condoleezza Rice had warned in a speech to the German Marshall Fund that “Russia’s bid to join the World Trade Organisation is now in jeopardy. And so too is its attempt to join the Organisation for Economic Co-operation and Development.”
EU member states have requested the European Commission to provide a comprehensive review of EU-Russia relations, including the bloc’s support for Russia’s WTO accession. The commission will deliver the review ahead of a 10 November foreign ministers’ meeting, which is expected to decide whether the EU should ‘defreeze’ negotiations suspended in August on a wide-ranging bilateral partnership and co-operation agreement. A summit between the two sides is scheduled for 14 November.
Securing a commitment that Russia will not impose new export taxes or raise the level of existing duties has been one of the EU’s objectives in the WTO accession talks. That avenue now appears closed, and only a last-minute bilateral compromise can avert a massive export tax hike on unprocessed timber on 1 January 2009 (see related story on page XX).
Ongoing differences notwithstanding, former EU Trade Commissioner Peter Mandelson told a Reuters correspondent in September that it would not be in “anyone’s interests to keep Russia out of the WTO for a day longer than is avoidable.” Such a course of action would not only weaken Russia, but also represent a lost opportunity for European and other countries seeking new exports and investments, he argued. A number of EU countries share this view, but some recently acceded Eastern European members have reservations.
Both the EU and the US have held out a possibility of launching free trade negotiations with Georgia, although neither has explicitly committed to doing so. Meanwhile, the US is looking into expanding Georgia’s access to its Generalised System of Preferences and the EU is preparing for negotiations on easing visa requirements. The two trading powers also accounted for the lion’s share of the US$4.5 billion aid package for the Caucasian country pledged by a donor conference in October.
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