Russia to Stalemate WTO Talks
27 October, 2011

Russia led its bid on the World Trade Organization (WTO) to stalemate by resisting Georgia’s far claim on admission international monitor control on its internationally recognized economic borders.

After more than 18 years of negotiations, Russia appears to be on the verge of joining the WTO. But it must first reach an agreement with Georgia, routed by Russia in a 5-day war in August 2008, on customs and border issues. Since the WTO membership is based on a consensus, Georgia has

an effective lever to keep Moscow tapping at the WTO door without success if it does not make concession and agrees to admit international monitors in the trade corridor within Georgian conflict zones bordering with Russia. Russia still has troops in the breakaway Georgian regions of Abkhazia and South Ossetia, which Moscow recognized as independent nations after the August war.

Tbilisi claims it lost control over its internationally recognized economic borders in the breakaway territories, which poses security and contraband risks and  requires from Moscow to admit international monitors  in exchange of Tbilisi’s vote for Russia’s WTO bid. Russia is the largest global economy outside the WTO and the West is vitally interested to have it in the trade club to enter the huge Russian market that lures the West especially today against the backdrop of fears against another bout of financial crisis, Soso Tsiskarishvili, a political-economic scientist, believes.

Tbilisi, who  had been requesting restoration of Georgian customs check-points at the pre- 2008 August war position, has already made a step backward during WTO talks this year under the international pressure and agreed on admission of international monitors but Moscow still defies this compromise.

On October 25, 2011 just before Georgian-Russian round of negotiations esteemed as pivotal since the countdown for Russia’s WTO bid this year is on, President Dmitry Medvedev’s economic adviser said Moscow will never meet Georgia’s demands and warned of serious economic ramifications if Russia is unable to join the WTO.

Georgia alleges that the two regions that split off in the war are occupied territory used as staging points for Russian terrorist incursions. Nevertheless international pressure became forcing before 25 October talks. European diplomats are fearful that the political momentum to close a deal could evaporate with Vladimir Putin’s expected return to the presidency next year who has long been ambivalent about the WTO, and has instead been pushing for a regional customs union involving Belarus, Kazakhstan and Ukraine.

“There is now very little time left to reach a bilateral agreement between Georgia and Russia. I call on both parties to continue their efforts to find a solution in a spirit of compromise,” Mr De Gucht, the EU trade commissioner, said offering the EU’s help to resolve the impasse.

The WTO’s director-general said on October 21that members should not “sustain blockage for the pleasure of blockage” and should make good faith efforts to resolve disagreements. Georgia is believed to be an addresser of the hint.

Tsiskarishvili believes the situation is a true stalemate with no move backward rather than an impasse enabling to step back and it was Moscow not Tbilisi that led to it by its inflexible approach.

“Georgia enjoys no pleasure in blockage Russia’s WTO bid, it just has no move backward after it agreed on international monitors on its internationally recognized economic borders, it is a legal claim resisted by official Tbilisi till 2008 when Russia occupied our territories and it could get stronger now requiring de-occupation rather than milder like to let Russia within the WTO without any claim. Letting Russia bypassing Georgian demand means additional capitulation to Georgia and a complete loss of national pride. The gain we can enjoy in return is zero unless quite questionable getting back Georgian wine and mineral water to Russian market scarcely able to offset the loss,” Tsiskarishvili told GJ adding that “if Russia enters the WTO bypassing consensus rule it is not supposed to observe any rules further and will be a permanent headache to the WTO.”

He suggests all the WTO members to put themselves on the place of Georgia and imagine whether or not they would like have economic partnership within their WTO partner who violates their internationally recognized economic borders.

Two senators and Republicans in White House unlike European diplomats hailed the Obama administration not to sacrifice Georgia’s security and sovereignty concerns in Washington’s effort to help Moscow join the global trade club this year.

“The administration should resolve this stalemate in a manner that respects the territorial integrity of Georgia. Then — and only then — will movement on the WTO question be worth considering”, House Speaker John Boehner said on October 25, 2011

In a letter to US Secretary of State Hillary Clinton and US Trade Representative Ron Kirk, Senators Roy Blunt and James Inhofe came down strongly on the side of Georgia.

“It should not come as any surprise that Georgian leaders are insisting on maintaining at least some semblance of territorial integrity through the customs process,” they said. “Without such recognition, agreeing to Russia WTO accession could be tantamount to international ratification of a new border arrangement imposed by Russia through force of arms.”

If Russia were to join the WTO, the US would be required under world trade rules to establish “permanent normal trade relations” (PNTR) by removing a Cold War-era trade restriction with Russia known as the Jackson-Vanik amendment.

Blunt and Inhofe, two usually reliable votes for trade, said in their letter they could only support PNTR if Russia agrees to border and custom procedures that respect “Georgia’s security considerations and future sovereignty,” Reuters reported on October 19, 2011.

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