Russian's long way to WTO: no losers

Russian's long way to WTO: no losers

Trend European Desk Commentator Elmira Tariverdiyeva

Russia on Wednesday signed the long-awaited agreement with Georgia that eliminates the final barrier on the path of Moscow's membership in the World Trade Organization. It took Russia 18 years to get accepted into WTO membership, but it was really worthy from the economic point. WTO membership will strengthen Moscow's influence amongst world's largest economies and encourage Moscow to make its economy more transparent.

Russia's joining the WTO is a real breakthrough in terms of attraction of investors to Russia, which is important after the 2008 financial crisis. Besides, this event is a little diplomatic victory of Washington and Brussels.

Over the past year of active phase of US-Russian talks under the so-called reloading, the White House has got almost every barrier on the Kremlin's path toward the WTO eliminated but Georgia, a WTO member that did not want Russia to be given membership in the organization due to well known circumstances.

That process long ago left the economic plain and entered the political one, which considerably disturbed Russia's plans of joining the organization.

Tbilisi formally did not relate its demand for Russian troops' pullout from Abkhazia and Southern Ossetia to the issue of Russia's joining the WTO but made every effort to make Russia let Georgian frontier guards enter the territories of self-proclaimed Abkhazia and Southern Ossetia.

Frankly speaking, Moscow actually ignored the factor of Georgia in a hope that its Western partners would pressurize against Tbilisi.

Eventually, Tbilisi made a compromise. The Governments of Georgia and Russia signed bilateral agreement of basic principles of customs administration and observation of goods turnover.

"The activity of observers, as provided by the agreement, envisions establishment of favorable environment for international observations. However, as provided by the agreement, an observer can not be a citizen of Russia or Georgia; observers will be given the freedom of movement when on duty," the Foreign Ministry of Georgia reported.

Evidently, it was difficult for Tbilisi to approve decision that envisions international observation of the territories of Abkhazia and South Ossetia with no Georgian frontier guards in presence.

Nevertheless, the Georgian side, probably, will be able to extract certain benefits from Russia's joining the WTO. Today, it is essential for Tbilisi to restore its trade links to Moscow to improve the economic situation in Georgia substantially. An ideal compromise decision for the two countries would be Georgia's agreement with Russia's joining the WTO in an exchange for Russian market's being open for Georgian produces.

In addition, such giants of Russian business as LUKoil, Bi-line, and bank VTB-24 pursue their interests in Georgia.

On the other hand, it is clear that Tbilisi no way could block Russia's joining the WTO for a long time so such a compromise variant is the best way-out of the deadlock.

Russia more likely will see long-term benefits from joining the WTO. The joining should make Russia a safe direction for investments, which will encourage Russian companies to become more efficient, competitive.

For the United States, the last legal barrier preventing improvement of trade relations with Russia is the so-called Jackson-Vanick Section of the 1974 Federal Law that disturbs US's permanent normal trade relations with Moscow and may undermine benefits from Russia's WTO membership if it is not cancelled in the near future. Most likely, the Obama Administration will not like so many its efforts to fail because of the cold war-era atavism.

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