WTO Still One Year Away, Minister Says

Itar-TassGref at the Duma on Wednesday. He said WTO talks could go beyond 2007.
Russia will not join the World Trade Organization before the end of 2007 at best, Economic Development and Trade Minister German Gref said Wednesday.

Addressing the State Duma during the monthly "Cabinet hour," Gref said he hoped rocky talks with the United States -- the only main roadblock to Russia's accession to the WTO -- would be concluded by a late October deadline.

But the negotiations could continue beyond the deadline, he said.

"God willing, [Russia will join] by the end of 2007, but it is quite possible that it will happen later," Gref said.

The United States and Russia set the deadline in July after they failed to reach a much-anticipated agreement on the eve of the Group of Eight summit in July, which was hosted by President Vladimir Putin in St. Petersburg. The talks collapsed over the issue of U.S. meat imports.

Gref last month raised the stakes by threatening sanctions on U.S. meat if the deadline was not met. It was unclear whether a possible prolongation of negotiations would prompt Russia to stick to the threat to curb U.S. meat imports.

At the moment, there are more than 130 discriminatory procedures against Russia when it comes to international trade. As a nonmember of the WTO, Russia is treated as a country with a non-market economy, Gref told Duma deputies.

"This means billions of dollars in losses for Russian exporters ... Once we are a WTO member, we will have the right to fully protect our interests," he said.

Gref spent almost two hours briefing the deputies on the benefits of WTO membership for Russian exporters.

The delay in joining is particularly harmful for Russia's developing manufacturing sector, and is blocking diversification of the country's economy away from raw material exports, said Yevgeny Gavrilenkov, chief economist at Troika Dialog. "One doesn't need to be a WTO member to export oil and gas," he said.

Even exports of famous goods such as AK-47 assault-rifles are being undermined by Russia not being a member of WTO, Gavrilenkov said. Only about 10 percent of the world market for Kalashnikovs is controlled by Russia, and the market is flooded with illegal copycats. As a member of WTO, Russia would have a way to defend its interests against such violations, he said.

But even though economists like Gref and Gavrilenkov advocate WTO membership, not all Duma deputies are convinced.

Dmitry Rogozin, a Rodina deputy, said now was not the time to join the WTO. "There is no question about whether it makes sense for Russia to join the WTO, but why do it now before giving many the national economic sectors an opportunity to get stronger," he said.

Communists, too, expressed wariness. "Joining the WTO in haste poses serious threats to the national industry and agriculture," Deputy Anatoly Lokot said.

If anything, haste is unlikely to be the right word to describe the accession process, Gavrilenkov noted.

"American business, which normally is the biggest lobbyist for such agreements, simply does not register Russia. They are much more concerned about China. ... For them, Russia is just the same as Zanzibar," he said. "It's just we are very egocentric; we think Russia is the center of the universe. But others don't share this view."

Valery Draganov, head of the Duma's Committee on Economy, Entrepreneurship and Tourism, said Russia would join WTO eventually, but only after the terms of accession were in full compliance with the nation's interests.