Knocking on the WTO's door

Russia's decision to seek membership of the World Trade Organisation (WTO) together with two other post-Soviet states, Belarus and Kazakhstan, puzzled many observers in the EU, which had given a green light to Russia's membership back in spring 2004.

Both Russian and EU officials were making optimistic comments about the possibility of Russia joining the WTO before the end of 2009. It is the only major world economy still outside the organisation - an international body of 153 countries - and has been seeking membership for 16 years.

"The prime ministers of Russia, Belarus and Kazakhstan will notify the WTO of their intention to start negotiations on the accession of the tripartite customs union and the end of national negotiations on WTO membership," Prime Minister Vladimir Putin said after a meeting of the Eurasian Economic Community. This move had clearly been agreed: the next day, Kazakhstan, which had been seeking WTO membership for 13 years, also suspended negotiations.

Putin explained the decision by the need for synchronising the three countries' WTO entry with the creation of the Customs Union, due to start operating on January 1, 2010.

"Entry into the WTO is a common priority, but we want to do it as a common customs space," Putin said.

This may not be the only explanation, since Russia's eventual WTO membership had been announced several times between the start of negotiations in 1993 and the beginning of the world financial crisis in 2008. During the crisis, many countries are trying to protect their economies and markets by building trade barriers. Stopping individual negotiations and opting for a sort of collective membership may have been prompted both by Russia's irritation at the long wait and considerations of the moment - the crisis is pushing many countries towards protectionist solutions.

The American Government is widely seen as the main force which tacitly blocked Russia's WTO entry over the last 10 years. To join the WTO, a country needs to gain a green light from all "working group" members. Somehow, this or that US ally in Russia's working group always raised objections to the country's membership at the moments when entry seemed certain.

If the aim of this policy was to politically damage former president Putin and his successor Dmitry Medvedev, its authors miscalculated.

Alexander Floudas, former head of the TACIS project on Russia's WTO entry, believes public attitude towards the organisation fluctuates from neutral to negative. Therefore, there was no way a delay in membership could steal Vladimir Putin's votes in 2004 or United Russia's parliamentary seats in 2003 and 2007.

But realising this took too long a time for Russia's Western partners.

Obviously, Russia finally lost patience. A round table on increasing the role of international co-operation and fighting protectionism, held on the eve of Russia's move in the framework of the recent St Petersburg economic forum and chaired by Thomas Friedman, an internationally known columnist for the New York Times, provided some interesting insight into the problem.

The Russian participants, such as finance minister Alexey Kudrin and chief WTO negotiator Maxim Medvedkov, voiced their grievances - not just over the 16-year delay in membership, but also on recently imposed restrictions on Russia's trade with other countries.

"In the conditions of the international crisis we feel increased discrimination," said Medvedkov. "During the last nine months the number of discriminatory measures against Russia has increased fivefold compared to last year."

Kudrin added that Russia was the only major world economy not yet a WTO member and that this was preventing the country from making its contribution to the stability of international trade. Answering Thomas Friedman's question on whether Russia saw its future primarily with the developed members of the OECD or the oil-exporting members of Opec, Kudrin noted that membership of both remains a stated goal of Russia's foreign policy - as reaffirmed in Prime Minister Putin's statement during his recent visit to Finland.

Dmitry Varnavin is a political commentator for Russia Profile magazine

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