Georgia must focus on economic issues at WTO talks with Russia
17 March, 2011
Georgia must focus on economic issues at WTO talks with Russia

A long pause in Georgian-Russian negotiations over Russia’s entry to the World Trade Organization is broken. Sides started the first round of negotiations in Switzerland on March 10, 2011. Georgian economic analysts think that Georgia must focus on lifting Russian trade embargo rather than on tackling political issues.
Having been knocking at the door of the World Trade Organization (WTO) for 17 years, Russia seems really willing to step over the threshold of the free trade club since it initiated

resumption of WTO talks with Georgia [already the WTO member], who withholds its consent for economic and political problems  with Russia.
Russia, the largest economy outside the WTO, has sought membership with varying levels of enthusiasm for it has been acting leery by dropping some protectionist tariffs and letting foreign business in. Although the country wants to improve its prospects for international trade with EU and Unites States  - a huge potential market restricted by the Jackson-Vanik amendment imposed by the US on Russia during the Cold War. Jackson-Vanik has been in force since 1974, and to this day hinders Russia’s normal trade relations. It can be waived after it enters the WTO.
The US and EU, both seeking for Russian huge market, show their intense desire to see Russia as a WTO member as soon as possible. According to White House’s projection, Russia was supposed to enroll the WTO by the end of 2010, but the forecasted entry-date is protracted to end of this year now.  
Russia has already secured votes of all WTO members except Georgia that swears to withhold its consent unless Russia meets two key demands: to lift trade embargo imposed on Georgia in 2006, and allow supervision by Georgian customs at checkpoints in Abkhazia and South Ossetia, Georgian breakaway republics.
Talks stalled in 2008 when Russia routed Georgia in a five-day war in August 2008 and acknowledged sovereignty of Abkhazia and South Osetia. They renewed only on March 10, 2011 in Swiss capital Bern under Russian initiative.  The event was preceded by the US Vice President Joe Biden’s visit in Moscow aimed to “reset” economic relations with Russia during which visit Biden accentuated that Russia’s entry at WTO is a top priority to the US. Biden lamented the low level of trade between the United States and Russia.
“The value of the goods that cross the US border with Canada and Mexico every few days exceeds the annual value of our trade with Russia…We’ve gotta do better, and I believe we can,” he is reported saying by Itar-Tass.
And as far as Georgian government did not disclose details of its demands till the day of the first round of resumed talks with Russia Georgian economic analysts supposed that they most probably yielded to interests of its strategic partners [the US and EU] and remove political demands from the talk’s agenda.
“Russia’s entry to WTO is a pure economic issue and no political issues are supposed to be discussed within its format,” Demur Giorkhelidze, an economic analyst, told Georgian Journal. “And Georgian government has to take it into consideration. Political tension with Russia cannot be solved through WTO, but if Georgia focuses on lifting trade embargo and sides sit down at the table for negotiations relationships can be settled down gradually and the lifting trade embargo may lead to solution political problem in a long-term prospect.”
According to Giorkhelidze, losting of Russian market was a huge blow to Georgian economy and it may take tens of years to restore this loss. Therefore Georgia is better to focus on trade issues during its WTO talks with Russia and gain as much benefit as possible and avoid unrealistic political demand that may lead talks to deadlock.
But Georgia did not change its demands during the first round of negotiations in Bern unless that allegedly it proposed admission of international customs along with Russian one at the disputed check-points like Transdniestria model, Georgian media reported. But no official source confirms this information.
Georgia’s attempts ‘to politicize’ Russia’s WTO entry terms are ‘categorically unacceptable’ for Moscow – this is the standpoint of the Kremlin aired after Bern talks.  The Kremlin appears hopeful the White House will negotiate Georgia. Biden accentuated that Washington had tried to talk Georgia out of blocking Russia’s accession, but the US government could not provide guarantees on the issue.
Georgian experts believe that if Georgia continues to be stubborn its strategic partners increase a pressure behind-the-scenes that may slow down both political and financial support of international organizations.
“It is an important message that just a fortnight prior the first round of Swiss talks EU made its demands on conclusion of Free Trade Agreement (FTA) with Georgia more stringent. On the other hand Biden’s visit to Moscow focused on reset of economic relationships coincided with talks in Bern,” Levan Kalandadze, an economic analyst said. “WTO is a purely trade organization and I doubt that Georgia could ever achieve solution to its political problems within WTO talks with Russia. Restoration of its control over economic borders is acknowledgement of its political territorial integrity in fact and Russia will never go on to it after it has acknowledged sovereignty of breakaway republics - it may blot its political image.  But Russia [since it initiated to resume talks] may go on economic concessions and change trade regime as well as visa regime with Georgia – that must be negotiated at the moment.”
Kalandadze presumes that if Georgia sticks to its political demands it may be just “moved aside” by its strategic partners for international community always makes exceptions for Russia with or without Georgia.
Georgian experts hope that the first round of Swiss talks was just a change of messages and real bargain only launches. Second round of negotiations is supposed to be held in April tentatively, Georgian government said.

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