Russia's 17-Year Bid To Join The WTO Faces One Last Hurdle
May 09, 2011
By Robert Coalson
Russia's tortured 17-year journey toward accession to the World Trade Organization (WTO) seems to be nearing its end. But exactly how the endgame will play out remains fraught with suspense.
With Washington and the European Union strongly endorsing Russia's bid and pushing for it to happen before the end of the year, the only obstacle remaining, by all appearances, is tiny Georgia. The two countries held a second, inconclusive round of Swiss-mediated talks in Bern last month and have scheduled another meeting for the end of this month.
Russia is the largest economy in the world that is not in the global trade body, and Moscow's accession is being advertised as a major achievement for the "reset" of U.S.-Russian relations that was proclaimed in 2009.
The sticking point is Tbilisi's insistence that it be able to monitor trade along the borders between Russia and the breakaway Georgian regions of South Ossetia and Abkhazia, which Moscow recognized as independent countries following the Russia-Georgia war in 2008. Tbilisi maintains that WTO rules stipulate that members must have control of their own borders.
It is a rare instance in which Georgia -- which says Russia is illegally occupying 20 percent of its territory -- has leverage over its giant neighbor.
"We are in a situation where Georgia for the first and only time has the chance to veto Russian ambitions," says Bakur Kvashilava, a program coordinator of international affairs at the Georgian Institute of Public Affairs. "In the past, it was always the opposite -- at the OSCE, at the UN. And this little country is now trying to use this tool to the maximum."
Can Georgia Block Moscow?
But just how much leverage Georgia has is uncertain. Historically, countries have always joined the WTO only with the unanimous consent of all members. However, according to the treaty, accession only requires the approval of two-thirds of the member countries, of which there are currently 153.
Russian Foreign Minister Sergei Lavrov made a provocative visit to South Ossetia and Abkhazia just days before the latest Bern talks and told journalists on April 26 that Russia might seek WTO membership without reaching an agreement with Georgia.
Moscow is relying on backroom support from Washington either to broker an agreement with Tbilisi or to ensure it can get the necessary votes to join the WTO over Georgia's objections, says Hans-Georg Heinrich, a political scientist and vice president of an Austrian think tank, the Institute for Advanced Studies.
"I don't think the Russians are concerned about Georgia so much. They leave it to the U.S. to put pressure on Georgia and if that doesn't pan out, they would seek a majority vote," Heinrich says. "It is no major preoccupation for the Russians."
Lavrov's statement might be a way of signaling to Washington that Moscow is growing impatient: Perhaps the only thing more embarrassing than Russia becoming the first country ever to join the WTO by less-than-unanimous consent would be the spectacle of Washington and its allies having to vote to override Georgia's objections.
RFE/RL's Georgian Service asked Ghia Jandieri, vice president of the New Economics School in Tbilisi, what kind of message such a vote in the WTO would send.
"I think the message won't be just for Georgia. This would be the clear domination of powerful nations over weaker countries, which would shatter the entire current international order. Everything would be allowed," Jandieri says.
"The OSCE was prevented from having an office in Georgia. The United Nations is not allowed to send peacekeepers. And if even in such a nonpolitical organization as the WTO you can do anything you want, then everything would be allowed."
Where Does U.S. Stand?
Washington's public position so far has been ambiguous. One the one hand, Michael McFaul, the president's senior director for Russian and Eurasian affairs, has said Russia's WTO membership is in the U.S. national interest. On the other hand, he has said the talks with Georgia are a bilateral issue and has denied that Washington is pressuring Georgia to drop its objections.
During a recent visit to Tbilisi shortly after Lavrov's statement, U.S. Deputy Assistant Secretary of State Tina Kaidanow stressed that Washington supported Georgia's territorial integrity and was calling on Moscow to observe the August 2008 cease-fire agreement.
On Russia's WTO bid, she expressed some sympathy for Georgia's position, saying that Washington was "supportive of Russian accession, but it also believes that Georgia has legitimate trade concerns that need to be addressed."
There are a number of carrots that Washington can use to entice Tbilisi. Most importantly, Georgia's efforts to negotiate a free-trade agreement with the European Union are currently effectively stalled. Movement on that front would be particularly attractive.
In addition, the United States is preparing a package of grants and concessions under its Millennium Challenge Corporation program that could be worth between $100 million and $250 million.
Third, Washington could offer back-channel assurances that Moscow will drop its 2006 embargo on the import of Georgian wines and mineral water if it joins the WTO. Although Tbilisi has downplayed the significance of this blockade, lifting it would be a significant boost to the country's economy.
Finding A Compromise
But even if such enticements shift Tbilisi's position, the problem of how to forge a face-saving compromise in the Georgia-Russia talks remains. Tbilisi will certainly never agree to anything that signals a renunciation of its claim to South Ossetia and Abkhazia, while Moscow has categorically rejected any Georgian presence along that border. In fact, Moscow heretofore has rejected the presence of UN or Organization for Security and Cooperation in Europe (OSCE) monitors in the two regions as well.
This is precisely where Thomas de Waal, a senior associate at the Carnegie Endowment specializing in the South Caucasus, sees room for the two sides to strike a deal that looks like a mutual compromise.
"It is possible that some sort of monitoring could be put in place which is not Georgian, but which is international, which could be seen as a symbolic victory for the Georgians," De Waal says. "So I think there are possible compromises out there. They are hard to achieve, but I think the stakes are so high and I think no one really wants this to fail, so it has to work in the end."
Indeed, there are signs that this is exactly what is happening. Following the latest round in Bern, the Russian daily "Kommersant" reported that the two sides are close to agreeing on "a compromise variant that does not include the physical presence of Georgians on the border." Georgian officials have denied this report.
Austrian political scientist Heinrich predicts that Moscow will give the current process with Georgia until late summer or early autumn and then will begin pressing for a vote of the entire WTO membership. The administration of Russian President Dmitry Medvedev seems determined to force the issue before the end of the year.
RFE/RL Georgian Service correspondent Lela Kunchulia contributed to this report
Copyright (c) 2011. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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