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When will Russia join the WTO?

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Russia's accession to the World Trade Organization (WTO) was discussed as far back as the late 1940s, when Russia was part of the Soviet Union.

Russia's accession to the World Trade Organization (WTO) was discussed as far back as the late 1940s, when Russia was part of the Soviet Union. At that time, the WTO was known as the General Agreement on Tariffs and Trade (GATT). The Soviet Union was enthusiastically invited to join GATT but did not for several reasons. In 1993, two years after the collapse of the Soviet Union, Russia announced its desire to join the WTO. Since then, the date of Russia's accession to this organization has been set more than once, but it is still not one of its 153 member countries, which together control 92% of the world's trade and set the rules of the game for global commerce.

Negotiations on Russia's accession are in their seventeenth year. Russia has signed bilateral agreements with all WTO members, essentially securing their consent for Russia's membership in the club, but obstacle after obstacle has blocked Russia's path. Poland, upset by Russia's decision to ban the import of substandard Polish meat, blocked Russia's accession at one point. On another occasion, Russia's ban on imports of American chicken and U.S. concerns over the protection of intellectual property rights became an obstacle to Russia's entry. After joining the WTO in 2008, Ukraine demanded that Russia cancel quotas on imported sugar, spirits and large diameter pipes and repeal export duties on Russian crude oil, alleging that Russia was subsidizing domestic producers with these duties. Other countries voiced complaints against Russia regarding export duties and the scale of government support for various industries.

Last August, the Russian government markedly stepped up its efforts to join the WTO on the order of President Dmitry Medvedev, and it made concessions on perhaps the most sensitive issue in the negotiations - agricultural subsidies. The level of government support for the agriculture industry will remain unchanged at $9 billion a year until 2012; however, subsidies for agricultural producers will be reduced to $4.4 billion by 2017. This is a major victory for the Western negotiators, one they have been pursuing for many years. Former Minister of Agriculture Alexei Gordeyev said this will reduce Russia's share in the world's agricultural exports from 1.3% to 1% and increase its food imports from 1.9% to 2.3%.

The completion of Kazakh-American bilateral talks in mid-September may have accelerated the talks between Russia and WTO countries (that along with major concessions from the Russians). Although the members of the Customs Union of Russia, Kazakhstan and Belarus decided to apply for WTO membership separately, they nevertheless agreed to coordinate their actions. And it seems Russia intends to be the first to join the WTO.

Russian Finance Minister Alexei Kudrin said that Russia may enter the WTO in the next four months. Maxim Medvedkov, director of the Economic Development Ministry's department on commercial talks, declined to give a more specific date because, as he said, his predictions never came true in the past. "If progress on negotiations keeps pace, I don't think that we will enter the new year of 2012 without being a member of this organization. I think this is unlikely," he said cautiously at a press briefing with RIA Novosti on October 2.

Now that talks with the United States, a key WTO member, are complete, an optimistic prediction of when Russia will join the WTO is more than justified, all the more so since there is a clear schedule for negotiations within a multilateral group on Russia's entry: meetings to settle outstanding issues are planned for October 25 and December 5 of this year. In early 2011, the group's report on Russia's trade regulations will have to be approved - the last step in the accession process. Another six months will be spent adjusting technical documents.

However, there still are some issues to be resolved. Russia and the EU have not yet reached an agreement on Russia's export duties on timber (next year Russia intends to raise the duty on a cubic meter of round timber from 15 euros to 50 euros). Nor has the dispute over Russia's meat imports been settled completely. Medvedkov said the terms for imports should take into account Russia's plans to develop livestock farming and its ongoing talks on this issue with a dozen or so countries. Subsidies for state-run companies and the protection of intellectual property remain a topic of discussion at multilateral talks. Moreover, on October 5 the Georgian government announced its intention not to support Russia's accession to the WTO. The Russian-Georgian bilateral talks on Russia's WTO entry were completed in 2004, but Georgia later withdrew its signature. In the words of the press secretary to the Georgian president, Manana Mandzhgaladze: "Georgia will not support Russia's WTO entry until Russia complies with Georgia's terms, which include customs checkpoints and a whole range of other issues in Russian-Georgian relations." Georgia is, in fact, demanding joint control of the checkpoints by the Psou River in Abkhazia and the Roksky tunnel in South Ossetia, and access for its goods to the Russian market.

So it appears that Russia will only be able to join the WTO in the near future if it makes concessions on issues that have been discussed for years. However, Russian officials may not agree to this, even if it is in the interests of major exporters and raw materials producers in Russia, which stand to benefit the most from Russia's WTO membership. Therefore, it is still too early to set the date for Russia's WTO entry. It may have to be delayed for another few years.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

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