BUSINESS
WTO Talks Failed - Tbilisi Waits, Moscow Does Not Hurry
13 October, 2011

Talks between Georgia and Russia over Russia’s entry in the World Trade Organization (WTO) failed again due to Russia’s stiff approach that makes Georgian side think that Russia does not hurry to join the global trade club.

The 17th and last round of negotiations held on October 7-8, 2011 in Geneva between Georgia and Russia over the Moscow’s WTO bid  led to no breakthrough  similarly to all  previous rounds because Russia refused to meet “even the minimum requests that is necessary

to enroll the WTO,” Nikoloz Vashakidze, First Deputy Minister of Foreign Affairs of Georgia, said during the traditional Monday briefing on October 10, 2011.

The minimum demand of Georgia suggests admitting international monitoring body at customs check-points of Georgia on Georgian-Russian border in the Georgian breakaway republics of Abkhazia and South Osetia that Moscow recognized as sovereign states after the five-day war in August of 2008.

To solve the problem Georgia initially 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 international monitors in the trade corridor of Abkhazia and South Osetia bordering with Russia.

Currently only Russian officials monitor the posts and Georgian side cannot control the turnover of goods that poses security and contraband risks, Georgian top officials say.

Moscow finds Georgian proposal unrealistic and blames Georgia in “politicizing” WTO talks. The US and EU been vitally interested in having Russia within the world trade club also hint Georgian government that it should not solve political problems in the WTO format. The point is that Russia is the single big global economy out of the WTO has been knocking at the WTO door for 18 years already. It cannot join the WTO [membership of which is based on full consensus of its member-states] since Georgia is the single country withholding its consent due to border transparency issue.

Georgian economic and political analysts find Georgian government’s approach completely relevant to be solved through the WTO format but they fear that official Tbilisi does not play diplomatic cards skillfully as it still cannot coax Russia to go on concessions.

“The key issue is a result and the result of the WTO talks is zero,” Levan Kalandadze, an economic analyst said. “I do understand that Russia is rigid but no result achieved as yet means that diplomacy fails, that not all tools are used, and the influence of Georgia’s western partners was not used as it should be.”

According to Soso Tsiskarishvili, a political and economic scientist, the WTO talks between Georgia and Russia are stymied as far as Russia lingers to enter the global trade club in the pre- presidential election period scheduled in March of 2012.

Vladimer Putin, the ex-president and incumbent prime minister of Russia nominated for the presidential office again, hates to deteriorate social and economic picture of the country [that definitely ensues the WTO entrance] on the threshold of his pre-election campaign.

“Whatever huge might be the profit of the WTO membership to Russia in a long-term prospect [and it is estimated in 11-13 trillions of dollars] its short-term aftermaths will be the drop in export and employment figures due to increased competition at internal market, and the share of the state protectionisms will be reduced to the minimum – all these is a no-no in the pre-election period and Putin is not supposed to rush in the WTO till the elections are through,” he said.

On the other hand, Russian social economy feels itself quite comfortable without the WTO rules and shuns opening up its doors to free and transparent market principles.

“Therefore if anybody has a critical attitude to Russian WTO bid it is Russia itself,” Tsiskarishvili suggests.

According to him, the single thing that can force Russia to accelerate its WTO bid is failure of euro facing serious crisis at the moment since the lion’s share of Russian income depends on this currency. And if some euro zone countries become insolvent Russia will have no way out but to enter the WTO and attract western investors eyeing Russian market anxiously.

As of much spoken “politicizing” talks by Georgia, Tsiskarishvili thinks that Tbilisi should extend even stronger demands and demand de-occupation of its territory from Russian military forces deployed within Georgian breakaway republics as it obviously hampers economic activity of the country and Tbilisi has full right to solve this problem through the WTO talks.

But Tbilisi sticks to its concessional suggestion and prefers to wait. As Sergi Kapanadze, Deputy Minister of Foreign Affairs of Georgia, who conducted talks with Russian side in Switzerland, told GJ, talks have a sense only if Moscow meets Tbilisi’s demand to admit international monitors so as to control cargo turnover in the trade corridor of Abkhazia and South Osetia.

“Georgia is open to dialogue even tomorrow and we still wait for the Swiss side information whether or not Russia is ready to resume talks this year…But Russia is not ready to meet our demand and we cannot agree till it becomes ready to this,” he said.

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