I have spent a couple of days at the US-Russia Business Council annual conference. It was held in Chicago under the amiable yet firm leadership of its president Ed Verona. Representatives of major US investors in Russia gathered in the “Windy City” to take stock of last year’s developments, including the very recent “election before the election” – Vladimir Putin’s decision to run for president – or rather to just take over from Dmitry Medvedev.
Most businessmen expected this. But they were concerned too. “Will modernization remain a relevant slogan for Russia’s new old leader?” – I heard this question many times during the conference.
It seems to me that even if it does, modernization will continue to be seen by the Kremlin as a purely technical or technological endeavour, like installing plasma screens in high-speed trains’ cars or introducing new turnstiles in the Moscow metro. It will not mean modernization of Russia’s institutions, fostering the independent judiciary and transparency.
Still there was a chance for positive developments – if Russia finally joined the World Trade Organisation. A plethora of US officials who attended the USRBC gathering, including America’s number one career diplomat (and former ambassador to Moscow) Bill Burns, spoke with unusual insistence about this. Sometimes it seemed that the Russians who came to Chicago were less concerned about WTO membership than the Americans. In an interview published by “Kommersant” daily on the eve of the conference, the current US ambassador to Moscow John Beyrle declared that Russia could, if it wished to, join the WTO before the end of this year and assured the readers that Washington has leaned on Georgia, the only remaining WTO member that opposes Russian membership.
It is clear why the Obama administration is pushing so hard for Russia’s WTO entry before the end of 2011. In an election year this will help the famously cautious US companies feel safer to invest in Russia, thus creating more jobs for Americans. It would also show that reset is something more practical than just picking the low-hanging political fruit. All this could be a modest but visible contribution to Barack Obama’s re-election campaign.
Although Russia’s first deputy Prime Minister Igor Shuvalov assured USRBC members that WTO remained a priority for Moscow, doubts linger. On the day of the conference Vladimir Putin published a lengthy piece in “Izvestia” daily. In it he extolled the virtues of the Customs Union between Russia, Kazakhstan and Belarus as Russia’s main hope for a future role in global economics. He intends to turn it into what he called a Eurasian Union, without internal borders and with the completely free movement of goods, capitals and labor. Neither Belarus nor Kazakhstan is a WTO member. The former will not be one for a very long time.
The Customs Union was long a stumbling block for US support of Russia’s WTO accession. And although the US officials in Chicago claimed they got all necessary explanations from the Russian side and think the accession process can move forward I still have my doubts. Membership in the WTO would provide Russian and foreign companies in Russia an external reference framework for resolving economic disputes. This will eventually mean the Kremlin losing at least a part of its influence on economic processes. This goes against the grain of everything we know about Vladimir Putin’s principles of government. Keeping Russian business on a short leash has let him accumulate unparalleled economic and, by extension, political power.
The same logic could be applied to the dispute with Georgia. Lately Moscow’s chief sanitary inspector Mr Onishchenko – nicknamed “weapon of mass destruction” for his ability to slap quick bans on imports of foodstuff from countries with which Moscow has political disputes – said that he might allow Georgian wine and mineral water back into Russia after a five year blanket ban. This is an evident gesture of goodwill. However this is not what the Georgians demand. In exchange for a “yes” answer to Russia’ WTO accession, Tbilisi demands that Russia allow the Georgian customs officials to establish posts on the Russian-Abkhaz and Russian-South Ossetian border. This in turn is impossible for Moscow, which recognized the independence of Georgia’s breakaway territories and is loath to compromise its decision by even hinting that Georgia could still have any sovereignty claimed over them. “To square this circle would ask for a lot of diplomatic ingenuity and inventiveness,” a high-ranking European diplomat opined to me. It resembles Chinese efforts to avoid recognizing Taiwan, or West Germany’s diplomatic acrobatics not to do the same to the Communist East Germany – and still maintain a relationship. It’s possible, but it is tricky.
There is very little information about what really goes on in Switzerland where these negotiations take place. But it looks for now as if things are probably not moving forward or at least, not moving forward fast enough. I wonder whether after eighteen years of negotiations Russia’s WTO membership is not destined to still remain an eternal future goal, rather than an achievable reality.
The views expressed in this article are the author’s and may not necessarily represent those of RIA Novosti.
What is Russia's place in this world? Unashamed and unreconstructed Atlanticist, Konstantin von Eggert believes his country to be part and parcel of the "global West." And while this is a minority view in Russia, the author is prepared to fight from his corner.
Konstantin Eggert is a commentator and host for radio Kommersant FM, Russia's first 24-hour news station. In the 1990s he was Diplomatic Correspondent for “Izvestia” and later the BBC Russian Service Moscow Bureau Editor. Konstantin has also spent some time working as ExxonMobil Vice-President in Russia. He was made Honorary Member of the Order of the British Empire by Queen Elizabeth II.