To speed WTO bid, Russia ditches customs union idea

By: | at 08:00 PM | International Trade  

Russia will pursue a separate bid to join the World Trade Organization, dropping its insistence on joining as a customs union with Belarus and Kazakhstan, a top Russian official said.

“Russia will formalize its membership separately,” First Deputy Prime Minister Igor Shuvalov told reporters at the start of a Washington visit aimed at lobbying for U.S. support.

“It would be beneficial to all if Russia is a member of the WTO before we create a single market with Kazakhstan and Belarus,” he said.

Russia threw its longtime bid to join the WTO into confusion last year when it said it would join the world trade body as part of a “customs union” with former Soviet republics Belarus and Kazakhstan.

Early WTO membership for Russia could help lay the groundwork for the other two countries to join as a customs union, Shuvalov said.

He said his meetings in Washington, which include talks with Secretary of State Hillary Clinton and National Economic Council Director Lawrence Summers, would seek to weigh U.S. support for concluding Moscow’s entry in the WTO.

He suggested this could be the subject of a follow-on summit between U.S. President Barack Obama and Russian President Dmitry Medevedev in a matter of months modeled on the recent START nuclear arms treaty.

“Everybody waits for a strong signal from the American administration that America is interested in having Russia in the WTO,” he said. “If our level is not sufficient, we will go to the presidents, like with the START treaty.”

Removing One Obstable

Russian Prime Minister Vladimir Putin announced the customs union plan last year as final talks on Moscow’s WTO entry seemed to be getting back on track after being derailed by the short war between Russia and neighboring Georgia in August 2008.

Shuvalov said the customs union proposal had been floated primarily to reassure Kazakhstan and Belarus that they would not be left behind but that Moscow now believed it could speed things by joining first.

“Our idea is cement all the relations with the whole group of WTO countries and then base our customs union or single market treaties on WTO membership,” he said.

U.S. officials have recently signaled their interest in resuming negotiations with Russia.

“It is worth it for both of us to take a hard look at how we might re-energize Russia’s WTO accession bid, despite the considerable complications posed by Russia’s decision to enter into a customs union with Kazakhstan and Belarus,” U.S. Undersecretary of State for Political Affairs William Burns said in a recent speech.

U.S. Trade Representative Ron Kirk is scheduled to meet Tuesday with Russian Minister of Economic Development Elvira Nabiullina.

Shuvalov said Russia had prepared a number of possible compromises on outstanding issues, which include intellectual property rights, imports of specialized equipment, state-owned industries and certain government subsidies.

“Everybody agrees that Russia has almost completely completed all the issues, just a few points left, and we are able to find compromises,” he said, adding that Kazakhstan had completed only about 70 percent of the required preliminary work and Belarus far less.

He declined to give details of the new proposals and played down prospects of a breakthrough during his visit.

House of Representatives Ways and Means Committee Chairman Sander Levin, whose committee has jurisdiction over trade, said he welcomed Russia’s interest in resuming WTO talks.

He also said Congress was unlikely to repeal a Cold War-era trade provision known as the Jackson-Vanik amendment to establish “permanent normal trade relations” (PNTR) with Russia until Moscow makes a final WTO deal.

“PNTR is the only avenue we have to make sure we participate in the WTO accession process,” Levin told the Reuters Global Financial Regulation Summit. (Reuters)


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