Russia is about to Step in Something

Why has the United States become so insistent that Russia enter the World Trade Organization? Perhaps the “reset” has finally worn out? Or maybe they are afraid that the fish has escaped the hook? After all, it is no secret that at the current stage of Russian economic development, it is Russia’s overseas partners who stand to benefit more from its membership in the organization.

For days, the U.S. Ambassador to Russia, John Beyrle, and — more remarkably — the U.S. Trade Representative, Ron Kirk, have announced in unison that Russia is just about to join the WTO. It will happen possibly this year during the course of the December WTO Ministerial Conference and if not, then certainly in 2012.

U.S. Secretary of State Hillary Clinton went even further: She spent half an hour of her precious time in a conversation with Georgia’s Minister of Foreign Affairs, Grigol Vashadze, mainly trying to win over Tbilisi so that it will stop hindering Russia’s entry into the WTO. After this conversation, Ron Kirk announced confidently that Georgian-Russian differences would soon be resolved. If that is so, it will become clear this weekend in the course of the next round of Georgia-Russia talks, to be mediated by Switzerland. Possibly, the “compensation” from the Russian side would be the admission of Georgian wine and Borzhomi mineral water into our market; the Russian Federation’s Chief Sanitary Inspector, Gennady Onishenko, has already hinted at this. Then again, representatives of the Russian Ministry of Foreign Affairs and the Ministry of Economic Development suggested that if Georgia is stubborn, its position could be ignored by other members of the WTO, who are prepared to accept Russia into their ranks.

The U.S. is, indisputably, among those countries. In February, Ron Kirk told Congress that the establishment of a regime of “permanent normal trade relations” with Russia (that is, abolition of the notorious Jackson-Vanik amendment) would be one of the most important goals of the administration in 2011. This would have to happen simultaneously with the entry of Russia into the world trade club.

Why such excitement across the ocean regarding Russia’s entry into the WTO? After all, the United States more than once put the brakes on the process, but now it rushes it. Apparently, there are a few causes. First, with the accession of Russia, the U.S. hopes to gain a like-minded ally in difficult multilateral talks (like at the Doha Round) and also in trade battles with China. These hopes prove, in part, how much Russia also often suffers from Chinese trade expansion.

But the main reason lies elsewhere. Vladimir Putin, having announced his intention to run for president this coming March, has not expressed particular enthusiasm for Russia’s entry into the WTO. It will cost us too high a price: It will require Russia to open its markets pretty extensively, while giving us practically nothing in exchange. Last spring, Putin very firmly expressed his doubts regarding membership in the WTO: He was outraged that cheap Chinese equipment does not allow the development of domestic energy, and we cannot raise import duties, inasmuch as we have already bound ourselves to certain obligations before the WTO. So, would it be worth it to rush to join this organization? The prime minister considers the priority to be not the WTO, but reintegration of the post-Soviet region (even if only a partial reintegration). In general, he does not begrudge global organizations much and considers the most effective integrated regional groups to be the European Union, the Association of Southeast Asian Nations and the Single Economic Space.

Our partners from the WTO understand well that three years ago, Russia suddenly decided to establish a customs union with Belarus and Kazakhstan because the nearly-completed talks on its entry into the world trade club had to begin almost from scratch. It is not understood how the prime minister’s concept of a Eurasian union, proposed just days ago, threatens the talks process. So it will be better if Russia succeeds in zipping into the WTO now, under President Medvedev. The prospect of a new and very lengthy Putin presidency “indicates that we should act quickly, but not at any price,” said Jochen Homann, the secretary of state of Germany’s Federal Ministry of Economics and Technology. That is, in the coming weeks, they will try to resolve all of the outstanding issues (for example, the regime of industrial assembly of foreign cars and support for agriculture) and accept Russia’s membership in December, even if this requires setting aside Georgia’s opinion and establishing a precedent of non-unanimous acceptance into the organization’s membership.