Russia May Join WTO this Year

Russia’s long-running negotiations to join the WTO could see it enter the global trade body in 2011, according to WTO Director-General Pascal Lamy.

“I believe Russian accession to the WTO before the end of the year is doable,” the WTO head told reporters after meeting with trade ministers on the sidelines of the World Economic Forum summit in Davos on Saturday 29 January.  He said that in the last year, the Russian leadership has “been pushing on the gas pedal and as a result of that the process has been moving on very substantially.”

Russia, the world’s largest economy outside the WTO, has been seeking membership since 1993, surpassing even China’s 15-year-long entry negotiations. Nevertheless, developments in the past several months augur well for the prospects of Russian accession.  In December, Russia signed a memorandum of understanding with its biggest trading partner, the EU, setting the terms for resolving all bilateral issues between them. In one key provision, Moscow committed to reduce export restrictions on lumber.

The Obama administration has praised Moscow’s concessions on intellectual property rights and US Trade Representative Ron Kirk has reported that talks with Russia have been going well with the US, with over 95 percent of outstanding issues resolved.

However, there are still several outstanding issues that Russia needs to resolve with its partners before it successfully accedes. These include farm subsidies, the treatment of state-owned companies, and intellectual property.  It also faces a potential veto from neighbouring Georgia, with which it has a troubled diplomatic and commercial relationship.  Theoretically, any individual WTO member could block consensus on a country’s entry into the organization. How-ever, major players, like the US, could encourage Georgia to accept Russia’s bid.

While Russia had been aiming to join by the first half of 2011, a Russian official acknowledged on Tuesday that negotiations would continue through May or June.

WTO accession is a multi-phased process that can take several years. The country seeking accession must first negotiate bilateral market access concessions with the other WTO member countries, and then seek approval in the multilateral and consensus-based working group.  Currently, Russia is working on negotiations to complete the final phase of the process.

The working party that oversees Russia’s accession talks met on 25 January.  According to sources, the parties are still gathering information about Russia’s agricultural programmes. While no firm commitments on farms subsidies have been reached, movements on the technical level have been proceeding well.  The next working party meeting is scheduled for late March.