Brussels, 25/07/2011 (Agence Europe) - Six months after bilateral agreements were secured at the WTO on access to the market with the United States and the EU, Russia sees its entry into the WTO hampered by various obstacles, far from insignificant. In addition to the fact that Moscow must reach agreement with Georgia, under Swiss mediation, on the implementation of various common customs structures in Abkhazia and South Ossetia, Russia must also settle the thorny issue of meat import quotas and that of its automobile sector investment scheme.
In under two weeks, Vladimir Putin has doused Russian hopes of membership to the WTO by the end of the year, which would have completed a laborious process begun in 1993. In mid-July, the Russian prime minister warned that Russia cannot sacrifice its new investment scheme in the automobile sector, which aims to encourage national production, in order to gain accession to the multilateral organisation governing world trade. In order to protect one of the most promising automobile markets, Moscow has in fact set up a series of measures - such as tax reductions on imports of spare parts - to incite large global groupings to manufacture on the spot in partnership with Russian companies, in exchange for the development or construction of production sites in Russia with a production capacity of at least 300,000 cars annually by 2020 and the use of a significant quantity of parts produced in the area. Speaking in mid-July and cited by several Russian press agencies, Putin said: “Discussions with the European Commission and the US administration on the process for admission to the WTO are difficult. They are adamant that we should lift our production requirements of 300,000 motor vehicles and local production of 60% of spare parts.” He went on to stress: “We have said that our position on this is unchanged and that it is a red line we are not prepared to cross.”
In addition to the automobile dossier, Russia must also settle the matter of meat import quotas, especially for pigmeat. Also in mid-July, the Russian economic development minister, Elvira Nabioullina, admitted that there was still disagreement about the Russian meat import regime. Such discord was confirmed by Putin, who warned on 22 July that Moscow could not revise its import quotas for poultry meat or pigmeat until after WTO accession. “During accession talks, parameters other than quotas are also covered. However, we cannot adopt them and implement them unless, and when, Russia becomes a full member of the WTO”, he said.
“We continue to believe that Russian accession to the WTO remains possible this year” on condition that the EU and Russia come to political agreement, including on the issues of quotas, health and plant health measures and the regime applicable in the motor car sector, by the summer holidays, said Commission President José Manuel Barroso after the EU-Russia summit in Nizhny Novgorod on 10 June. Russia is “fed up” seeing negotiations going on for 17 years: it is time a conclusion was reached said Russian President Dmitri Medvedev, calling on the EU to do all in its power so that this could be so before the end of the year. One week later, however, Medvedev gave warning at the opening of the Saint Petersburg Economic Forum that Russia would not accept to pay any price to achieve WTO accession. “I believe that it is realistic that discussions can be concluded this year, unless, of course, the political games begin again. We have been ready for accession for a long time, longer than other countries but people are trying to wring too many concessions from us. Russia will not accept any decisions which are clearly detrimental to it”, he insisted.
While still claiming they hope to join the WTO before the end of 2011, the Russian authorities have, for several months been making gaffe after gaffe, such as when they were quick to impose a ban on the import of European vegetables at the start of June following the deadly E.coli outbreak. After the source of the outbreak was discovered, Moscow agreed to lift the embargo. Much more will be required than this for Russia, the only global economic power not yet a member of the WTO, to subscribe to the rules of multilateralism. Many observers agree that Vladimir Putin, who continues to blow hot and cold with the risk of disorienting his interlocutors, has his hand firmly on the accession talks. “Russia will not over exert itself to join the WTO, and if it believes its demands have not been met, it could very well walk away”, a diplomatic source said. Russian business circles have never been very enthusiastic. With little support from the ordinary Russians, the path of Russian accession to the WTO remains difficult.
Russia has still, of course, to settle a final, and not inconsiderable, obstacle: bilateral agreement with Georgia on access to the goods and services market, as it has already done with some 60 member countries. Georgia has set as a precondition for its approval of such an agreement that Russia accepts the legalisation of customs posts in Abkhazia and South Ossetia, two breakaway Georgian provinces that have been recognised by Moscow as independent states since the 2008 war. (E.H./transl.jl/rt)