Economy Not Yet Stable, Putin Tells WTO

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President Vladimir Putin told visiting World Trade Organization director general Michael Moore on Friday that Russia was committed to joining the WTO, but not at any price.

"We are not asking for, nor are we counting on any privileges. We ask for a standard approach while acceding to the WTO," Putin told Moore in remarks broadcast on ORT television.

"We hope the WTO understands that Russia has not yet ended a period of structural reforms and has not yet reached a state of [economic] upturn and stable development," Putin said.

At a round table earlier in the day attended by Moore and top EU and Russian officials, Prime Minister Mikhail Kasyanov reiterated Russia's position that WTO entry is a priority only if its economic interests could be protected.

"We are aiming to become a full-fledged partner," he said. He said Russia had already made several concessions to the global trade body, but "we need between five and seven years to restructure some of the main sectors of our economy."

Moore and the EU also expressed support for Russia's entry.

"The WTO will not be a full global organization without Russia as a full-fledged member," Moore said.

"Russia's accession to the WTO [is] a gradual process that cannot be completed overnight. Russia can count on us to accompany it along this road," said EU Trade Commissioner Pascal Lamy.

Economic Development and Trade Minister German Gref refused to give a timetable for entry, but said that the bulk of remaining issues should be resolved by the end of the year.

Russia's talks with the WTO have dragged on since 1995, but have accelerated lately. At issue are bringing Russian legislation — most prominently intellectual property rights, customs and tax regulations — in line with international standards and agreeing to terms that will open Russian markets.

Gref said becoming a member of the global trade club has specific economic benefits: "Expert estimates show that several years after accession to the WTO, positive cash flows [into the economy] could increase as much as $18 billion a year, specifically from lowering protectionist trade barriers," he said.

Presently, WTO lists a dozen categories of Russian export products that currently face trade barriers — including steel, agricultural pesticides and paper products — which complicate international trade for Russian businesses.

But gaining access to WTO member markets would also mean that Russia has to lower its own protective trade barriers as well.

As a result, many of the country's enterprises "still question the advantages and opportunities" of WTO membership, Kasyanov said.

One of the goals for entering WTO is to protect Russian importers that have encountered negative attitudes from its foreign trade partners, including European countries, Kasyanov said.

Overall, anti-dumping measures cost Russian importers more than $2.5 billion in recent years, he said.

Gref said the country has already resolved the bulk of issues necessary for accession, especially when it comes to import tariffs.

In a bid to align its regulations with WTO norms, the government recently slashed import duties on more than 3,000 items, effective January 2001.

Currently, the Economic Development and Trade Ministry is bargaining with 50 WTO members over obtaining mutually satisfactory tariffs on a wide range of products.

While market reforms remain the government's priority, a number of economic sectors, including agriculture, remain extremely inefficient, Gref said.

According to Gref, the government will aim to push 10 draft laws concerning customs tariffs and intellectual property rights through the legislature by the end of August.

These conditions are necessary if Russia is to receive approval from the 40 WTO member countries it is currently negotiating with.

Agriculture remains one of the main problem areas.

WTO currently has 135 member countries responsible for 90 percent of the world trade, while another 30 countries are currently considering entry.

"An arranged marriage with WTO is something that Russia is striving for, and Russia is counting on the support of its European partners," Gref said.