Russia’s chronic economic woes dash its hopes of achieving early WTO membership

Date: 11/02/1999

By Simon Taylor

RUSSIA'S progress towards World Trade Organisation membership has stalled, with diplomats in Geneva complaining that Moscow's moves read more like a textbook on how not to conduct negotiations.

Whatever it might say, Russia clearly has other, more pressing priorities at the moment than pushing ahead with its bid for membership of the global trade body, although it still complains bitterly when it is treated as a 'non-market economy'.

The European Commission has agreed to relax this broad definition and take the Russian economy as it finds it: a strange mixture of market and non-market forces.

However, the fundamental reforms necessary to support Moscow's WTO bid do not seem to be happening at the moment and few can see any signs of them on the horizon.

“There does not seem to be much political will behind their application,” said one Geneva-based diplomat. He added that it was unclear what laws had been adopted by the Russian parliament, what presidential decrees had been passed and what the priorities were. “We are waiting for offers on trade in services and goods,” he explained.

In the meantime, no fresh meetings are scheduled in Geneva to discuss Moscow's application.

Russian President Boris Yeltsin promised last September to intensify his country's efforts to join the trade body, but Russia's continued economic difficulties and government reshuffles have made this an empty pledge.

Yeltsin's own repeated bouts of ill health have also contributed to the impression that Moscow is drifting on this and many other issues.

The summit between the EU and Russia next Thursday (18 February) will provide an opportunity for Moscow to outline its intentions.

These are likely to include a pledge to introduce systematic controls on state subsidies by the end of 2000, the creation of an anti-monopoly watchdog, adoption of WTO rules governing public procurement, and an action plan to protect intellectual property rights.

But nobody is holding their breath in anticipation of serious progress. Instead, Russia has been overtaken in the race for WTO membership by former Soviet republics such as Kyrgyzstan and Latvia; both of whose protocols for accession were adopted last October by the trade body's general council.

These former Russian satellite states have proved that a bit of political will can go a long way towards achieving the desired results.