Russia recognised by EU as fully-fledged market economy

Date: 30/05/02

By David Cronin

THE EU became the first major trading power to formally recognise Russia as a fully-fledged 'market economy' yesterday (29 May).

European Commission President Romano Prodi described the announcement as an 'important milestone' on the road to the country joining the World Trade Organisation (WTO).

Speaking in Moscow after the Union's summit with Russian President Vladimir Putin, he said: 'What we promise we will keep. As Russia's principal trading partner it is right and proper that we will be the first to recognise and reward the considerable efforts undertaken in recent years.'

The Commission has indicated it should only take a few months before the legislation conferring this status is placed on the statute books.

The principal benefit for Russia will be that its own market data will be assessed in suspected cases of 'dumping' cheap goods on the EU market. Analysts believe it should now be easier for Russian firms to prove they are manufacturing their products at economically viable prices and not selling below cost.

The situation facing Russia's Baltic enclave Kaliningrad featured prominently in the summit talks. Prodi's spokesman Jonathan Faull said the region, bordering two of the EU's applicant states - Poland and Lithuania - should be considered as an 'opportunity' for the enlargement process instead of a problem.

The EU became the first major trading power to formally recognise Russia as a fully-fledged 'market economy' on 29 May 2002.