WTO – will Ukraine make life difficult for Russia?

MOSCOW. (RIA Novosti political commentator Oleg Mityayev) - At the WTO's General Council on February 5, Ukrainian President Viktor Yushchenko signed a protocol on joining the World Trade Organization. This was the culmination of a process of preparation and negotiation that Ukraine embarked upon as long ago as 1993.

Russia started its own preparations to join the WTO at around the same time. But while Ukraine is likely to be a full-fledged member by summer, its powerful northern neighbor is unlikely to have even completed the endless rounds of talks on accession by that time. Indeed, once a member, Ukraine may set its own requirements of Russia, pushing the dream of WTO membership even further back.

In order to become the 152nd full member of the WTO, Ukraine's parliament, the Rada, must ratify the protocol on accession. That ratification may be delayed, considering that the Orange coalition has a minimal majority in parliament, an impediment that is continuously hindering its work. Moreover, according to WTO rules, a country becomes a full WTO member only 30 days after the protocol's ratification. Nonetheless, Ukraine can still expect to acquire full membership by May.

Although Russia has already travelled a long way to enter the WTO, there are many more obstacles to be overcome before it becomes a full member. In order to join the WTO, the stated aim of which is to uphold free trade throughout the world, a candidate nation has to conduct talks with all WTO members that would like to do so. In late 2006, Russia signed a bilateral agreement with the United States on its WTO entry after years of negotiations. It seemed that the last serious obstacle had been removed. This was an illusion.

New negotiators have emerged, preventing Russia from completing its WTO entry talks. Many of these started talks with Russia immediately after joining the organization themselves, including the former Soviet republics of Estonia (1999), Georgia (2000), and Moldova (2001).

Recently, several of the Gulf States have questioned Russia's WTO entry. Last September, Saudi Arabia (which became a full WTO member in late 2005) initiated talks with Russia on the WTO. At the very end of the past year, the United Arab Emirates (UAE) suddenly voiced their interest in talks with Russia.

Russia has little time left for avoiding talks with Ukraine. The sluggish talks with the Saudis and the UAE must be brought to a close sometime in the next two or three months. So far, this looks far off. A RIA Novosti source in the Russian negotiating team found it hard to say when the talks may end.

Second, Russia has to resolve specific problems with some WTO members with which it already has bilateral general agreements - on railway tariffs and export duties on round timber with the European Union (EU), and on check-points on the border with Abkhazia and South Ossetia with Georgia.

Third, Russia has to hold multilateral negotiations on support for agriculture, veterinary and phyto-sanitary issues, and intellectual property rights protection.

The same source told RIA Novosti that if Russia fails to resolve all these problems before Ukraine joins the WTO, its own entry may be delayed for a long time. "In this case, our Ukrainian friends will insolently say that they want to start bilateral talks with us, as the Saudis and the Arab Emirates have done," he said.

A few days before signing the protocol in Geneva, Viktor Yushchenko bluntly announced his intention to use WTO membership to exert pressure on Russia. He said that the two countries would have interesting talks on the problems of bilateral trade, including Russian anti-dumping duties on Ukrainian produce.

Russia and Ukraine will have many subjects for discussion. Ukraine estimates that Russian restrictions on Ukrainian goods have reduced its exports by three billion dollars, and increased Ukraine's negative balance in trade with Russia to six billion dollars.

Ukrainian Prime Minister Yulia Tymoshenko declared recently that Kiev would not use its accession to the WTO to exert leverage on Russia. But economists find it difficult to believe that Ukraine will resist the temptation to use the benefits of its WTO membership to settle its problems with Russia.

The opinions expressed in this article are the author's and do not necessarily represent those of Trend.-0-

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