Brussels, 27/09/2007 (Agence Europe) - Recent statements by the new Russian government leave little doubt that Russia wants to join the World Trade Organisation (WTO) and hopes to conclude the entry negotiations this year. Speaking on Tuesday 25 September, Elvira Nabiullina, the new Russian economic minister in the latest cabinet reshuffle by Russian President Vladimir Putin, said she would be pursuing the economic reform process launched by her predecessor, German Gref, and concluding Russia's accession talks with the WTO. In a press release published on Tuesday, the Ministry for the Economy explained that successful conclusion of the WTO talks was the number one priority for the ministry and the Russian government alike. Joining the WTO is needed to ensure favourable development conditions for the Russian economy and to consolidate the outcome of the reform process, it explains. The ministry promised to continue the socio-economic reforms under the new minister.
Genuine political will in Moscow. In an interview with this newsletter on Monday 24 September, the Russian ambassador to the EU, Vladimir Chizhov, confirmed the Russian authorities' political will to join the WTO, 'perhaps before the end of this year, perhaps only next year, but the process is slowly moving on'. He said that the go-ahead for Russia to join would require the signing of a bilateral agreement between Russia and the EU on market access for goods and services. The talks between Brussels and Moscow are still hampered by friction over certain minor trade issues in veterinary and phytosanitary affairs, intellectual property rights (IPR) and customs cooperation but also, more importantly, by two more major issues, differential export tariffs for Russian wood (the July 2007 increase in tariffs is penalising Finland, Latvia and Sweden - see EUROPE 9493), and Russian rail duty (tariffs levied by Russia on rail freight from EU member states) which discriminates against the Baltic States. Chizhov said: 'It may take a bit of time and further bit of effort, but WTO accession does not depend only on discussions between EU and Russia. I believe the remaining issues will ultimately be solved by all the players. The overall atmosphere in WTO is not a very promising one on the Doha Round. But we are slowly edging towards the brink of accession'.
Stiff resistance within Russia. Russia still has to win over a segment of public opinion and business circles which dislike the idea of joining the WTO because it would lead to greater liberalisation of the Russian economy. 'I cannot say this is an issue over which Russian public opinion has lost its sleep. I wouldn't even say that there is a 100% consensus across Russia on WTO, even across the Russian business community, because many small and medium-sized businesses are quite apprehensive on this perspective. Also, some less developed regions are a bit scared over how accession might influence their own economic development,' explained Chizhov. He went on: 'This is an issue that requires not only negotiating skills but also power of persuasion domestically. It's not that Russia's fate or the growth of the Russian economy depends on this but understandably, Russia is still the biggest non-WTO economy in the world. The government is convinced that WTO membership will bring more advantages than disadvantages.'
More work required. The WTO accession talks seemed to be reaching an end last year with the reaching of agreement in December 2006 of a bilateral agreement on market access between Russia and the United States, but were delayed due to the fact that the EU and Russia have not yet concluded their bilateral negotiations in parallel with the multilateral accession process requiring the transposition of WTO rules into Russia's domestic legal system. WTO negotiators from the EU and Russia in Geneva are continuing to meet informally, while sources close to EU Trade Commissioner Peter Mandelson in Brussels explain that the Commission is in constant and very regular contact with the Russian authorities and the talks will certainly intensify in the run-up to the EU-Russia summit in Mafra (Portugal) on 26 October 2007. Sources at the WTO headquarters confirm that the talks are continuing. At multilateral level, the issues still to be ironed out are technical barriers to trade, veterinary and phytosanitary issues, IPR and agriculture. Negotiations are making progress on the bilateral front as well. After reaching a bilateral market access agreement with Cambodia last week, Russia now has to reach agreement with Saudi Arabia and Georgia. Meetings were held in Geneva last week between Russia and Saudi Arabia but disagreement over customs issues (no doubt complicated by political concerns) mean that agreement with Tbilisi is likely to take more time to hammer out. (eh)