Russia puts its WTO entry in doubt

Russia puts its WTO entry in doubt

Moscow threw its 16-year campaign for World Trade Organisation membership into doubt on Tuesday when Vladimir Putin said Russia would only join as part of a trade bloc with Kazakhstan and Belarus. Mr Putin, Russia’s prime minister, said in a joint statement that negotiations for all three countries would begin anew on the basis of the customs zone. “Our priority remains WTO entry, we confirm this, but already as a customs union and not as separate countries.” The turnround could add another significant delay to Russia’s entry into the 153-member global trade body just as the European Union had said accession was near after more than a decade of stop-start negotiations. Russia is the largest country outside the trading body. The WTO said it had not received any notification from Russia or its partners of their wish to change the basis of membership talks. There are no precedents for negotiating the simultaneous WTO accession of all members of a customs union. It would be within the rules, trade officials say, but the three countries would have to agree a common negotiating position in advance and decide who would speak for the customs union. “The three countries referred to are at very different stages in accession negotiations. It is difficult to see how the negotiation process can be harmonised,” said one EU source. One person close to another large western WTO member said: “We are in deep shock. It looks like they are trying to brake the process.” Mr Putin’s announcement that Russia was scrapping talks as an individual nation came days after senior EU and US trade officials held top-level talks at the St Petersburg investment forum in which Russian officials said they were committed to ironing out differences to ensure Russia’s soonest possible entry. Catherine Ashton, EU trade commissioner, had said Russia and the EU had agreed its WTO accession should be completed by the end of the year. Russia’s accession had long been dogged by issues over EU objections to import duties on timber and cars, while talks with the US had stalled after Russia’s war with Georgia last year. Mr Putin was speaking after the three former Soviet states agreed to create a long-planned customs zone by January 1 2010. Dmitry Medvedev, the Russian president, said the creation of the customs union did not mean Russia was rejecting membership of the WTO “even though the process dragged out and in recent years was more like a feast of promises”. Igor Shuvalov, the first deputy prime minister, said joining the WTO as a customs zone would speed the process up rather than slow it down. The EU trade commission said the EU wanted to probe the comments before drawing conclusions, but a spokesman added that during the talks in St Petersburg “the Russian side said it was committed to WTO accession by the end of the year”. “But should the basic parameters of these negotiations be changed this would create a new situation,” he said. Sergei Markov, a member of the ruling United Russia party, said that Russia had grown tired of the repeated delays on accession talks which he said were being caused by politicking by Russia’s western partners.