Sunday, June 10, 2018

Russia in the WTO? Not a Chance Now, Bub

A few days ago after the outbreak of hostilities between Russia and Georgia over the breakaway republic of South Ossetia, I ventured that the chances of Russia joining the World Trade Organization were much diminished. With Russia now giving formal recognition to South Ossetia and Abkhazia, it cannot but help alienate even more current WTO members. This point is important as Russia needs the approval of all WTO members--including Georgia--should it be permitted to enter into the organization.

Our cyberfriend Daniel Altman says given the continued inability of the Doha round to finally be completed, the incentives for Russia joining are getting even less attractive. After fifteen years of laying the groundwork for eventual WTO accession, Russia is effectively throwing it all away. Not only is it becoming increasingly belligerent toward its would-be club members, but it is also pooh-poohing the supposed benefits that membership holds. I don't quite agree with the IHT blogger that WTO membership would have been a much greater prize had the Doha round succeeded as the gains to be had from its completion are incremental at best.

There is also a transatlantic divide on how to address the issue. US Commerce Secretary Carlos Guttierez has suggested that the US will raise Russia's perceived rough treatment of Georgia as a bargaining chip. Seeing America's intentions, Russia probably decided that walking away instead of being seen as kowtowing to pressure from Washington was a better decision. OTOH, the European Union--more dependent as it is on Russia's oil and natural gas supplies--actually think the Georgia episode should spur faster Russian accession. (Or, at least it did prior to Moscow's latest stunt of recognizing South Ossetia and Abkhazia.)

In any event, I leave you with the the news agency RIA Novosti's take on the matter. As it is pretty close to the official version of events, it should suffice for now:

Russia wants to join the WTO, but doubts it will be accepted into the global trade body within the next 12 months, the country's first deputy prime minister said on Monday. "The government says WTO accession is in line with Russia's strategic interests, and we will do everything necessary for talks to conclude with Russia joining. However, for the time being, we must note that we see no prospects for WTO accession within several months or a year," Igor Shuvalov told journalists.

He said that Russia would continue the accession process, but at the same time would terminate some of the trade agreements it had previously reached with the WTO as being too onerous." Russia intends to notify its WTO partners about its withdrawal from accords that are in conflict with its interests," he said.

The latest round of WTO talks collapsed in late July, but Russia's top negotiator said the parties could still return to the negotiating table later this year. Talks in Geneva between trade ministers from the largest WTO member countries broke up on July 29 after nine days of meetings to discuss agricultural subsidies and customs duties on industrial and agricultural products, and also try to fix a date for a conference aimed at achieving a breakthrough in the Doha round of talks on liberalizing global trade.

Maxim Medvedkov said that the parties had reached a common understanding on 18 of the 20 issues under discussion, including on the need to cut agricultural subsidies. At the same time, developed and developing nations failed to agree on protection of agricultural imports and reduction of industrial import tariffs. The Doha Round began in Qatar's capital in 2001, but has stalled due to disagreements over farming subsidies in the U.S., the EU and Japan, and trade tariffs in emerging economies.

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