Russia, WTO, and Putin's New NIEO

♠ Posted by Emmanuel in , at 6/11/2007 12:04:00 AM
Whew! That title is a mouthful, indeed. Let me explain what's going on here. First, Russia claims that it is still on track for completing its WTO accession by year-end:

Russia still hopes to complete all procedures related to joining the WTO by the end of the year, Russian Economic Development Minister German Gref told journalists on Sunday in St. Petersburg after talks with European Commissioner for Trade Peter Mandelson and WTO General Director Pascal Lamy. "The timeframe has not changed. We should complete everything by the end of the year," the minister said. Gref said timber export duties were currently the most acute topic at the WTO talks with the European Union.

WTO head honcho Pascal Lamy also sees a good chance that Russia will join the WTO soon as talks on moving the Doha Development Round resume in Germany:
Successful completion of the Doha round of trade talks and bringing Russia into the World Trade Organisation are both achievable, WTO head Pascal Lamy said on Sunday.

"We need political traction, and negotiators should be instructed to walk the extra mile," Lamy told an economic forum in St Petersburg. "I believe it's doable -- we are not there yet."

Lamy's comments reinforced the upbeat mood at last week's Group of Eight summit, where leaders of the world's richest nations called for the long-delayed round of global trade talks to reach a prompt conclusion.

Four trade powers -- the European Union, the United States, India and Brazil -- will meet from June 14 in Germany for five days to seek a breakthrough on Doha.

The round was launched in 2001 to boost the stake of developing nations in free trade, but agreement on trade in farm and industrial goods has proved to be elusive.

Russia, which has been negotiating to join the WTO since the mid-1990s, remains the largest economy outside the club. Its entry talks are far advanced but are being hampered by friction with the European Union.

Meanwhile, Vladimir Putin drew more attention to himself--if that's even possible--by calling for a "new architecture" to handle international economic relations in which developing countries have more say [yawn...] Message to Mr. Putin: We've been down this road before with the New International Economic Order (NIEO), the Non-Aligned Movement (NAM), the G-77, and the UN Conference for Trade and Development (UNCTAD) [zzzzzzz...snore...] Every now and then, developing countries try to band together and have more voice in international economic affairs. Will it be any different this time? Well, the India/Brazil juggernaut seems to be holding up the Doha Development Round pretty good, but we'll see if developing countries finally get a better deal. From Reuters, here is a brief backgrounder on Mr. Putin's statements:
Russian President Vladimir Putin on Sunday called for practical steps to redraw the world economic order to reflect the growing role of fast-growing emerging nations.

He told an economic forum in St Petersburg many global trade and financial institutions tailored to meet the interests of a few key economies were ineffective and pointed to flexible regional groupings as an alternative.

Putin told the gathering of foreign officials and top executives 60 percent of the world's GDP was produced outside the Group of Seven (G7) leading nations -- the United States, France, Germany, Britain, Japan, Italy and Canada.

"The interests of stable economic development demand the creation of a new architecture of international economic relations based on trust and mutually beneficial integration," Putin said, days after attending a summit of the Group of Eight industrial nations, which includes Russia.

Putin, who has pledged to stop the Group of Eight from turning into a club of "fat cats", said the principle of international investment was not applied fairly in practice.

Making an apparent reference to the rebuffs Russian companies have received when trying to invest in some Western markets, Putin said:

"We see the doctrine of free investment being replaced in the developed countries by completely different approaches."

"It turns out that foreign investment is not always seen as positive and foreign participation is practically closed in sectors such as infrastructure, telecoms and energy..."

Putin also rang a skeptical note about the current financial system based on few currencies and financial centers.

"There is only one possible response to this challenge -- the creation of several international reserve currencies and more financial centers," he said.

Of course, Putin's version is a bit more self-serving in that Russia has a central role in this proposed international economic reordering of his. However, a lot of his notions could have been lifted straight from the NIEO's program from the early seventies:
  1. A substantial shift occurred in the developing countries perception of the gains to be had from economic relations with the developed countries under the existing rules of the game; the shift was toward the gloomier side;
  2. At the same time, the developing countries perceived their own economic and hence political power via-a-vis the developed countries to be sufficiently substantial to warrant a strategy of effective trade unionism to change the rules of the game and thereby to wrest a greater share of the worlds wealth and income;
  3. Finally, a straightforward political desire to participate more effectively in decision making on the international economic matters was evident. Participation was demanded not merely to ensure that the developing countriesinterests were safeguarded, but equally as an assertion of their rights as members of an international community, and as a desired feature of a just international order.
Plus Ça Change, Plus C'est La Même Chose