Georgia may lose the WTO game if it sticks to political demands
05 May, 2011
Georgia may lose the WTO game if it sticks to political demands

The second round of negotiations over the Russia’s entry in the World Trade Organization is over and Georgia still sticks to its political demand in exchange of voting for Russia. Georgian analysts fear that if Georgia does not shift the focus from political to economic demands it may lose the WTO game.

Details of the second round of Georgian-Russian negotiations over the Russia’s WTO membership [held on April 28-29, 2011 in Bern, Switzerland] are kept confidential. Meantime Georgian government assures

that things are going in the right direction.  As Nino Kalandadze, Deputy Foreign Minister of Georgia stated on May 2, 2011, the indicator of positive movement is that the sides appointed the third round of negotiations  in May [in Switzerland again for it is the mediator country between negotiating sides starting 2008 when Russia routed Georgia in August].
“Negotiations are going successfully and there is no need to stop it. On the reverse it is encouraged from both [negotiating] sides. I would not elaborate details at the moment for sides agreed not to disclose details at the moment. However the positive move is that we started discussing very serious concrete proposals on comprehensive issues that is a step beyond formal phase,” Kalandadze said reiterating once again that Georgia’s demands are unchanged: Georgia would support Russia’s bid to join the WTO if Moscow agrees to make borders with Russia in Georgian breakaway republics of Abkhazia and South Ossetia transparent.  Currently Russian officials monitor the posts and Georgian side cannot control the turnover of goods that poses security and contraband risks.
To solve the problem Georgia proposed three versions. Initially it demanded restoration of Georgian customs supervision on cross points. Then it proposed to control borders mutually together with Russian side. Now Tbilisi offers “a compromise solution” involving deployment of EU monitors on the questioned borders. Moscow finds all of them unrealistic and blames Georgia in “politicizing” WTO talks. Moreover Moscow hints it can join the global trade club without Georgian consent but it would not like to do it.
Georgian economic analysts cannot recollect such a precedent but they believe the EU and the US [been vitally interested to have Russia within the WTO] would make this kind of precedent for Russia exclusively and Georgia would rather focus on economic demands and negotiate lifting Russian trade embargo imposed on Georgia in 2006. They believe Russia will go on this concession while it never allows restoration of Georgian state control over borders in Abkhazia and South Osetia once the Kremlin recognized them as independent republics in 2008.
The EU and the US made it categorically clear to Georgia that they would like to have Russia one of the major economies world over, within the WTO and the WTO talks is no mechanism to solve political issues. 
Few days earlier the second round of WTO talks Michael McFaul, the U.S. President’s special assistant and National Security Council’s senior director for Russian and Eurasian Affairs, reiterated once again that Russia’s entry to the WTO is a top priority to the US, and hinted the embargo problem might be easily resolved.
“I am not worried about that,” he said. “But there is this fundamental issue about border.”
Georgian government meantime downplays importance of Russian market and underlines the most important term in the WTO talks with Russia is control over the borders in the occupied territories.
“This is our fundamental requirement emanating from the WTO Charter,” Kalandzde said on April 26 adding it is a “purely economic” requirement of Tbilisi. When asked of recently revealed contraband case of Georgian mineral water to Russia, she said:
“We have neither motivation nor desire to restore this [Russian] market in any way. Is it connected with the WTO entry issues? I decidedly say these issues have no interconnection with each other.”
Temur Iakobashvili, Ambassador of Georgia to the United States, also backed this approach.
McFaul accentuated that US would not be mediating between Georgia and Russia and squeeze on Georgia over the WTO talks’ terms with Russia to escape politicization of the issue.
Georgian economic analysts find governmental approach extremely unserious and fear such confrontation may lead only to a deadlock.  They fear Georgia may lose a chance to get back to Russian market that actually can be used as a platform for political reconciliation process with Russia.
“The key thing is a result. We want to strengthen political relationships and can confrontation lead us to this result? No business person and reasonable country will say that any market even a tiny one is not important. And how can we say that the Russian market with more than 100 million consumers is not a priority. It will be a priority for the coming 100 years and no other market can replace it, it is impossible from technical point of view. To hit new market needs huge money and how can we refuse Russian market that is already familiar to us?” Demur Giorkhelidze, an economic analyst, told Georgian Journal.
Levan Kalandadze, an economic analyst, believes McFaul’s statement in folk terms translates as following: Georgia sticks to wrong position; its partner got annoyed and turns a back to it.
“Russia will enroll the WTO in this way or other, and Georgia will end the game with no result,” he said.


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