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Russia to become WTO member

by | Nov 5, 2011

TBILISI, DFWatch – Both Russia and Georgia have given thumbs up for an agreement which will allow Russia to become member of the World Trade Organization (WTO). But experts are asking that  ‘significant details’ be clarified before the treaty is signed.

The question of Russia’s inclusion into the WTO has become a pressing issue over the last few years. Part of the reason Georgia used its veto power to block membership for was the fact that Russia refused to fulfill the Georgian government’s main request, which was the opening of custom-checkpoints between Russia and Georgia and lift the Russian embargo on Georgian goods which came in the wake of the arrest of four Russian diplomats accused of being spies in 2006.

It is not surprising that WTO membership has been important for Russia, taking into consideration how beneficial it would be with a simplified relationship with WTO member countries.

Russia is by far the largest economy outside of the WTO, with approximately 1.5 trillion GDP annually, and its entry would mark the biggest step in the liberalization of world trade since China joined WTO 10 years ago. The World Bank has estimated that a Russian WTO membership could add 3 per cent to the Russian economy in the medium term and up to 11 per cent in a long term perspective.

Both Europe and the USA have been trying to solving this issue, but Georgia didn’t abandon its stance in these attempts. It was only after a Swiss brokered deal on October 27 that an agreement was reached, a solution which Russia also greenlighted on November 3.

“We are ready to accept the ideas of this compromise, which has been brought about with Switzerland’s assistance,” Russian President Dmitry Medvedev said at a press conference during G20 Summit this week.

According to him, a Russian membership will contribute to the liberalization of trade and investments.

“Fortunately, Georgia supported the final version of an agreement, and an agreement is reached. Russia has overcome the last obstacles to WTO membership. Dual-side agreement project is based on our proposed conception and doesn’t go beyond the Russian positions. Moscow and Tbilisi have agreed on records of goods on the Abkhazian and South Ossetian borders,” Maksim Medvedkov, chairman of the Russian delegation during the negotiations said.

According to him, there will be an audit carried out by a neutral company of the trade between Russia and Georgia, which will also assist Russian and Georgian customs services.

Georgian Deputy Foreign Minister Sergi Kapanadze says there are some issues left to sort out regarding Russia’s WTO membership, but these problems should be solved by November 10.

He says that a two-component monitoring will be carried out on all cargo moving between Russia and Georgia. THis deals with control over three trade corridors. First, the River Psou crossing, on the border between Abkhazia, Georgia’s breakaway region and Russia.

“Monitors will be located on the river Psou and will control everything exported into Abkhazia,” Kapanadze says.

The second trade corridor is the Roki Tunnel, and approximately 3.7 km long tunnel which divides the greater Caucasus range and connects North and South Caucasus. The road which goes through the tunnel leads from the North and ends up in the city of Gori. Everything which runs in this corridor will also be controlled. This corridor connects the Russian republic of North Ossetia with Georgia’s breakaway region South Ossetia.

The third corridor is on undisputed territory in the Kazbegi mountains, the Lars checkpoint.

Georgian negotiators claim that international observers from a private company will be located at the start and the end of the trade corridors and will carry out the monitoring of what runs through these corridors.

In the case of Abkhazia and South Ossetia, observers will be located on the Russian side of the borders, and one more group will be operating on the Georgian side of the administrative border, which means that they won’t be located inside the territory of the separatist regions.

As Sergi Kapanadze states that these trade corridors are defined according to their geographic coordinates, which will avoid ‘terminological’ misunderstandings about the status of the breakaway regions.

“Trade corridors are defined due to geographical coordinates. So there won’t be used the word ‘border’ and politically charged terminology,” Kapanadze says.

The final round of negotiations is scheduled for 9-10 November. 153 countries will review Russia’s WTO membership at a ministerial meeting December 15.

“The agreement achieved in the current dialog on Russia’s WTO membership is our diplomatic victory,” Georgian President Mikheil Saakashvili says.

“Economically we had won the fact that the perspectives raised to return Georgian goods on Russian market; politically – locating international monitors on the borders of occupied territories Georgia had recorded legal right of these checkpoints’ control.” This is Georgian Government’s official view, as released by the Foreign Ministry on November 3.



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