Saturday

4th Feb 2023

Russia inches closer to WTO membership after EU deal

Russia hopes to join the World Trade Organisation next year after agreeing on Wednesday (24 November) with the EU on tariffs for raw materials, a move that will be formalised at an EU-Russia summit on 7 December.

Russia's willingness to phase out export duties on raw materials such as timber - which are particularly problematic for countries like Finland, where timber and paper industry are a big share of the economy - removes an EU veto on Russia's WTO accession.

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  • Moscow hopes to join the WTO next year (Photo: kremlin.ru)

On the other hand, oil and gas – Russia's main exports to the EU – are not covered by WTO rules, which means that pricing disputes such as the ones with Ukraine leading to gas cut offs in 2007 and 2009 will not be subject to WTO arbitration.

"The negotiators of the Russian Federation and of the European Commission have concluded the bilateral talks on key outstanding elements in the accession of the Russian Federation to the WTO," a statement of the commission reads.

While being "aware of the remaining multilateral issues" such as agricultural trade, sanitary and phyto-sanitary rules and the investment regime in the automotive sector, both Moscow and Brussels are confident that Russia will be greeted into the Geneva-based global trade organisation.

"After all these talks, we can say now we have practically resolved all the issues," Russian deputy premier Igor Shuvalov said after talks with European Commission President Jose Manuel Barroso and the commissioners for trade and foreign relations. He added that the Russian President Dmitry Medvedev would finalise the agreement at an EU-Russia summit on 7 December.

"Russia now has no more problems dealing with other countries relating to WTO accession," he said, in reference to an agreement with the US two months ago.

Russia first filed an application to join the WTO in 1993 and needs consensus of all 153 countries which are already members. Asked if he expected problems from WTO member Georgia, with whom Russia waged a brief war in 2008, Mr Shuvalov said that "we haven't heard anything about Georgia blocking."

In a speech held on Tuesday in the European Parliament in Strasbourg, Georgian President Mikhail Saakashvili reached out to Russia and "unilaterally" pledged not to use force to resolve conflicts anymore. The speech marked a shift in Georgian foreign policy, more in line with the US administration's "reset" policy towards Moscow.

Washington's backing of Moscow's WTO bid is also likely to be a strong incentive for Georgia not to block the application.

In an interview with the Wall Street Journal last week, WTO director Pascal Lamy said Russia's WTO bid was "accelerating", as it is seen as a "political priority" by both the Russian president and prime minister.

The country's lower house in the past six months has passed key legislation in line with WTO requirements, Mr Lamy pointed out, but "whether they join in 2011 is another question."

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