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. Last Updated: 07/27/2016

Russia's WTO Accession: Into the Final Phase

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Nine years after applying to join the General Agreement on Tariffs and Trade, predecessor to the World Trade Organization, Russia's WTO accession is at last entering its decisive and final phase. This is vividly demonstrated by the circulation of the first draft of the working party report. The final version of that document, together with a protocol of accession and the schedules of concessions in goods and services, will set the terms and conditions of Russia's entry into the World Trade Organization.

Reaching this stage has required an intense process of legislative renewal and reform by the Russian authorities. In just two years, the number of legislative acts that the authorities themselves consider essential for assuming WTO membership has been reduced by more than two-thirds to about 40 laws or decrees for which final enactment is still pending. Legislative work is now moving rapidly on a new version of the Customs Code and of the law "On State Regulation of Foreign Trade Activity," which, once finally enacted, should go a long way to aligning Russian provisions and procedures in these key areas as well as complying with WTO requirements.

This has been made possible because of the strong political resolve shown by the Russian authorities at the highest level. Without this resolve, accession to the WTO would still be very far away.

But why was such a strong political resolve required to move things forward?

The answer to this question lies in the natural relationship between WTO accession and the process of domestic reform. Accession is directly linked to a sound process of domestic economic reform. This is a natural result of the need to bring the internal economic structure of the country into line with fundamental international norms, of which the WTO agreement is the expression. In recent years, domestic reforms have indeed determined the pace of Russia's accession to the WTO. The government of President Vladimir Putin has been marked by a new intensity in the speed and scope of reform of the country's economy.

It is clear from Russia's long history, the size of its internal market and its importance in the shaping of world politics that the process of economic reform will have wide-ranging political and social implications. Changes of this kind consequently require vision as well as steady determination. They also require the building of consensus among domestic interest groups to sustain the changes, notwithstanding inevitable difficulties.

The time for hard decisions has arrived. Reform of the Russian economy must be completed. Leaving the job half done would run the risk of watching the results so far slip away. This would diminish the prospects for further economic growth and threaten those that have taken such risks in supporting difficult change.

The political costs of change have already been paid and only early accession to the WTO will allow Russia to receive the full dividends of the hard work already done, such as guaranteeing the opening of markets by all WTO members to Russia on stable and predictable terms. The availability of WTO dispute settlement procedures for the resolution of trade disputes is a key aspect of WTO membership. It is a critical tool to contain the sometimes inevitable commercial disputes from spreading or affecting the more general political relationships of the countries concerned. Membership in the WTO is the guarantee that trading disputes, no matter how complex or difficult, are contained and settled within a stable multilateral framework.

There is widespread consensus in Russia on the strategic need to accede to the WTO, even among those that question the possible terms and timing of entry. Over the years, we have seen interest groups in many acceding countries engage in the same debates as the accession negotiations enter their final phase. Those debates require clear and constructive decisions from policy-makers and this is certainly happening in the case of Russia's accession to the WTO.

At the Doha Ministerial Conference in November 2001, WTO member governments agreed to undertake one of the most complex and important trade negotiating rounds ever attempted. The Doha Development Round aims to define international trading relations for the first part of this century and to provide tangible and universal economic benefits to all, particularly including developing economies and economies in transition.

Should Russia exclude itself from negotiations by delaying its assumption of full membership in the WTO?

In my view, the answer to this question can only be no. Moreover, after the recent accession of China, Russian entry will also provide a further step to reaching universality of the multilateral trading system that would be beneficial for all members.

But there is another important aspect that makes the agreement in Doha unprecedented. For the first time, the WTO members also stressed the importance of concluding the round within a defined time frame when they launched the negotiating agenda. In the past, negotiations tended to be extended in line with the increasing complexity of the subject matters addressed or with the difficulties encountered in giving concessions in sectors such as agriculture and textiles.

Today, the understanding of both the task before us and the need to deliver speedy dividends from the acceleration of globalization have caused ministers to explicitly state that results should be seen within a much shorter period of time. This is why already in these first months after Doha, the road map for completion of the negotiations is being put in place with unprecedented speed.

In my mind, the road ahead is clear. Member governments, the Russian authorities, the WTO secretariat and the international community should all redouble their efforts to make Russia's accession happen as quickly as possible. What is at stake is the evolution and eventual stability of the multilateral trading system.

Even though very strongly politically supported, Russian accession to the WTO cannot be concluded on a purely political basis. Clearly, the contractual and legally binding nature of the WTO does not permit it. To complete accession, we will need to see the completion of meaningful market access deals in goods and services and a solid legal and administrative framework in Russia -- that will guarantee the implementation of contracted commitments.

From this standpoint, are the conditions for an agreement starting to come together?

Yes. I am firmly of the view that we can already see the emergence of the basic elements that will eventually lead to the final package. I believe that in a few months' time, and in the expectation of further legislative developments, we should be in a position to define exactly what the outstanding issues are, as well as setting out a framework for their resolution. The necessary breakthroughs will then depend on political resolve and courage. Therefore, it is more important than ever to use the present time to foster within Russia a constituency in support of continuing economic reform efforts.

Our common objective is to build a balanced package capable of providing member countries with meaningful access to the Russian market on multilaterally enforceable terms. In turn, Russia will receive guaranteed and predictable access to the markets of its trading partners. Russia will also take a central place in the management and future development of the world economic system. In this way Russia's reintegration into the world market will be completed. No matter how difficult the outstanding problems may be, I believe there are people in Washington, Brussels and Moscow with the horsepower, firepower and willpower to make this accession happen.

Accessions, in their final phase, always come back to such core issues as agriculture, banking, insurance or telecommunications. I can only hope that negotiators think in historic terms, because it will be a great failure of leadership if this accession is not completed in time for the Mexico Ministerial Conference next year.

Mike Moore is director general of the World Trade Organization. This comment is excerpted from a speech he made on Friday at the fifth annual Russian Economic Forum in London.