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. Last Updated: 07/27/2016

Russia in No Hurry for WTO




Despite recent pronouncements by government leaders that Russia could join the World Trade Organization next year, Moscow is still not in a great hurry.


Russia is quite happy to delay admission in order to negotiate a better deal for entry because Russia's economy would be devastated if it were to suddenly drop tariff and nontariff measures that currently shield domestic producers.


"We are not competing with anybody [to join the WTO first] and will continue talks to get more advantageous terms of trade," said Georgy Gabunia, acting first deputy trade minister.


He shrugged off a United States decision to place Russia behind five other former Soviet republics in a list of countries seeking to join the World Trade Organization that it will support.


The United States said this week that it was backing bids by Armenia, Georgia, Lithuania, Moldova and Estonia, but not by Russia, to be admitted to the WTO, the Bloomberg agency reported.


Russian officials said they did not want early admission to the WTO on unfavorable terms and that they would like to negotiate a better deal with the organization's members.


The WTO is a forum for negotiating the terms of international trade. New members are obliged to negotiate bilateral agreements with any of the 134 existing members that expresses concern about the status of bilateral trade.


Gabunia doubted that the economies of the five former Soviet republics would fare better after admission to the WTO, saying they had opened their economies even more than Kyrgyzstan.


Last October, Kyrgyzstan became the first former Soviet republic to get admission to the World Trade Organization.


Later it was joined by Latvia, and the five other former Soviet vassals might become members of the WTO before end of the year.


"Kyrgyzstan joined the WTO despite the fact that it had a customs union with Russia [and other countries in the CIS]," Trade Ministry spokesman Igor Makurin said.


As a result, Kyrgyzstan later faced unilaterally imposed tariffs by its neighbors.


"This [the U.S. ranking of Russia behind former republics] is a purely political decision. Of course, there are no real economic reforms in countries like Moldova and Georgia," said Alexander Ostapovich, group manager with the Bureau of Economic Analysis, a Moscow-based research center.


"Russia should negotiate the longest possible transition period, during which restrictions will gradually be removed," he added. This year Russia pledged to lower import tariffs from 30 percent to 20 percent on 300 products.


Most of them said that decisions in the WTO were made exclusively on economic criteria.


"If the U.S. were driven by political reasons, Russia would already be a member of WTO," said Ben Slay, senior economist with PlanEcon, a Washington-based research center.


The United States International Trade Administration refused to comment Thursday.


Russia started talks with the WTO in 1995, and most of the time these have merely involved an exchange of information on terms of trade.


Disputes on tariff policies, subsidies to agriculture and access to the services market, including banking and insurance, have to be resolved, Gabunia said.


He did not dismiss a possibility that Russia could join the WTO next year, though he said talks would be drawn-out and no easy solutions were expected.


Should Russia come to terms with the United States, the latter will have to lift restrictions on imports of Russian steel.