MOSCOW. (RIA Novosti economic commentator Oleg Mityayev) – After 16 years of touch-and-go accession talks with the WTO, the Russian authorities have decided to stop the process of individual accession and make a joint bid with Belarus and Kazakhstan instead.
The decision was announced at a meeting of their Customs Union on June 9.
Later that day, the meeting of the Eurasian Economic Community established Eurasec’s Anti-crisis Fund to the amount of $10 billion.
Russian Prime Minister Vladimir Putin said on June 9 after a meeting of the Customs Union’s Supreme Body that Russia would no longer have to negotiate accession to the World Trade Organization as an independent state.
“WTO accession remains a joint priority for us,” he said. Russia, Belarus and Kazakhstan are still seeking WTO entry, “but as a united customs union, not as separate countries.”
However, they first need to formalize their union, which is to become operational on January 1, 2010, when its common customs tariff will be applied.
Russia’s First Deputy Prime Minister Igor Shuvalov said the tariff had been fully coordinated, with a transition period established for sensitive groups of goods during which the three countries will apply their own tariffs for such goods.
By July 1, 2011, customs control will be moved to the three countries’ common border and the customs borders between them will be liquidated.
The possibility of a joint bid by several countries is stipulated in the WTO procedure. However, Russia has covered 95% of the road as an independent state. Since 1993, it has coordinated with the WTO member states the most complicated terms and conditions for its entry, such as the mechanism of foreign banks’ access to the Russian banking system.
However, President Dmitry Medvedev said the accession process was taking too long and looked more like insincere promises than a genuine desire to admit Russia in the past few years.
Moscow has likely come to see that some Western countries are using the WTO accession talks for political bargaining.
Moreover, accession benefits are questionable especially since the global energy markets are already open to Russia’s main export commodity – energy. Metallurgy is one of the few Russian industries that may benefit from WTO accession, while other sectors will most likely lose. Besides, a crisis is not the best time for opening one’s market.
Russia’s intention to bid for WTO accession jointly with Belarus and Kazakhstan will put off accession for years. But Moscow has apparently decided that strengthening economic ties with its closest neighbors is more important than the WTO entry.
On June 9, Moscow also hosted a meeting of Eurasec’s Interstate Council.
Eurasec comprises Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan, while Moldova, Ukraine and Armenia have observer status.
It was announced after the meeting that Eurasec and Armenia had set up an Anti-crisis Fund to the amount of $10 billion. Since Russia will contribute $7.5 billion, its finance minister, Alexei Kudrin, was elected chairman of the fund.
The money will be used to issue sovereign loans to the member states and finance interstate investment projects.
The Fund will become a regional analogue of the International Monetary Fund (IMF), which issues stabilization loans, and the European Bank for Reconstruction and Development (EBRD), which finances investment projects.
Russia has recently refused to increase its IMF fees, which are used to issue stabilization loans to countries worldwide. It is now using the money to set up a regional fund for assistance to its allies.
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