Is Mother Russia Nearing WTO Accession?

♠ Posted by Emmanuel in , at 3/27/2008 01:48:00 AM
Perhaps spurred by the Ukraine beating it to WTO membership, Russia is now pulling out all the stops in its efforts to also join the "nefarious" WTO. To gain entry into the organization, Russia needs to obtain the consent of all the WTO's members. For understandable reasons, negotiations with the Russia-fearing and NATO-joining (well, almost) republic of Georgia are among the most contentious discussions. RIA Novosti has a report on the negotiations between the two antagonists:

Russia will hold negotiations with Georgia on joining the World Trade Organization in late April, Moscow's chief WTO negotiator said on Tuesday. Russia has been seeking membership of the WTO since 1993. So far, Russia has concluded bilateral talks with over 60 states but still needs to complete discussions with the WTO members - Saudi Arabia, the United Arab Emirates and Georgia - that have trade disagreements with the country.

"We are discussing the possibility of a new meeting with Georgia, which is likely to take place in late April in Geneva where a new round of negotiations will be held," Maxim Medvedkov said. Tbilisi earlier vetoed Russia's accession to the world's largest trade body. Relations between the two former Soviet republics have rapidly deteriorated since the Western-leaning Mikheil Saakashvili came to power in Georgia in 2004.

Moscow imposed a transportation and postal blockade on Georgia in October 2006 in apparent retaliation for the detention on espionage charges of four Russian army officers. Russian officials cited commercial reasons, while Tbilisi called the move politically motivated. However, flights are set to resume to Georgia from Russia on Tuesday after a deal was struck in late February.

The South Caucasus republic says it will cease to block Russia's WTO bid only after Moscow honors its 2004 commitment to close down its border checkpoints with Georgia's breakaway republics of Abkhazia and South Ossetia. The two de facto independent republics recently appealed to Moscow for recognition of their sovereignty in the wake of Kosovo's unilateral declaration of independence on February 17.

At the same time, Medvedkov said that Russia would possibly sign a protocol on concluding WTO talks with the United Arab Emirates soon. "We hope to complete negotiations with the United Arab Emirates this week and after that we'll sign a protocol at a time convenient for the parties," Medvedkov said, adding that the document could be signed in late April.

Russia's has already completed bilateral WTO talks with both the U.S. and the EU. Multilateral talks are underway now on agricultural support, export duties, veterinary matters and intellectual piracy.

Aside from the negotiations with Georgia, Saudi Arabia, and the UAE, Russia is facing some contentious discussions with the EU, especially on timber export duties that are having deleterious effects on Nordic paper makers. It's interesting to hear what Alexei Kudrin, Putin's point man on economic matters, has to say. This from Reuters:

Russia is nearing the end of its bid to join the World Trade Organisation (WTO) but still faces "difficult" talks with the European Union on timber export duties, Finance Minister Alexei Kudrin said on Tuesday.

"The WTO accession talks are nearing conclusion. There is intense work going on. Officials from the United States and the European Union are constructively working with us," Kudrin said in a speech. "We are holding difficult but constructive talks on timber duties (with the European Union)," Kudrin, who heads the government's WTO commission, told reporters later. Russia is the largest economy outside the WTO.

Kudrin said he would travel next week to Saudi Arabia and the United Arab Emirates, two of the three countries with which Russia has yet to conclude bilateral deals. Ex-Soviet neighbour Georgia is the third.

"Almost every week we undo a knot. The number of unsolved issues is diminishing," Kudrin said. He declined to predict a date for Russia's accession, but said: "We have a feeling that there is positive movement." Kudrin said WTO accession would be the next major milestone in Russia's economic development after the 2006 liberalisation of capital movement. Kudrin, Russia's economic policy tsar and said to be the leading authority on economic issues for outgoing President Vladimir Putin, met European Trade Commissioner Peter Mandelson in Brussels last week.

His schedule indicated he wanted to achieve a breakthrough in the talks before an expected government reshuffle in May after the inauguration of President Dmitry Medvedev. Brussels has yet to give final clearance for Russia's WTO bid, mainly because of the dispute over Russian export duties on timber that hurts paper and pulp producers in Nordic EU states.

President Vladimir Putin imposed export duties on raw timber in 2007 to promote the development of Russia's wood-processing industry, adding to the costs of Swedish and Finnish paper firms such as Stora Enso, the world's biggest paper producer, UPM-Kymmene, and M-Real.

The duties are due to rise to 25 percent from 20 percent on April 1, one of a series of planned increases. Credit ratings agency Standard & Poor's said a planned increase in the duty to 80 percent from January 2009 would be "potentially devastating" and raised the risk of downgrades for companies in the Nordic forest products sector.

The Bank of Finland has said the higher duties could lead to job cuts and lower national economic output. About 20 percent of raw wood used by Finnish paper mills comes from Russia. Russian WTO negotiator Maxim Medvedkov, who said last year Russia had a solution to the timber export duties row, said the issue was still being discussed with the EU, along with six or seven other duties.

"Our disagreements are diminishing but we have not so far reached common ground. We need a little bit more time," Medvedkov told Reuters. Russian officials declined to reveal the proposals.