A First Step to Russia’s Entry into the World Trade Organization.
by Janki Shah
On November 19, 2006, in Hanoi, Vietnam, Russian President Vladimir
Putin and U.S. President George W. Bush are due to sign an agreement
that will bring Russia's $1 trillion economy a step closer to joining
the 149-member World Trade Organization. This will also be a huge step
in forwarding US-Russian relations. For Russia, this deal means its
entry to the World Trade Organization will be safe from potential attacks
by U.S. lawmakers. The bilateral deal with the United States will be
the last and most difficult in a string of 56 similar agreements signed
by Russia in the past six years.
It is Russia’s hope that the next stage, which includes multilateral talks, will take no more than 6-8 months, allowing Russia to finalize the whole process by mid-2007. On the US end, U.S. business groups have welcomed the pact, which removes long-standing Russian obstacles to U.S. beef, pork and poultry exports and required Moscow to cut tariffs on a long list of agricultural and manufactured goods. In addition, Russia has also agreed to open up its services sector and to combat piracy and counterfeiting of foreign goods.
In the past few years, many have criticized and belittled every action of President Bush. Yet, I find it hard to say anything negative about his current decision. Allowing a large economy to create trade ties with the US has been one of, if not the smartest, decisions that Bush has made in his presidency. It seems that this is the first time he is thinking about the welfare of the US and of Russia, and not only of what he and his cronies will get out of the decision. Recent criticism has arisen, from both the US and Russia, that the only reason that President Bush is going though with this Russian campaign is that Bush, who needs a strong political boost after the Republican defeat in the mid-term polls, is pushing for a WTO deal with Russia in the hope of getting Putin's support on issues like Iran or Iraq. Therefore, it is important to note that these talks were put into action before the elections, but whatever the case might be, the point is that something positive is finally being done by the Bush administration to bring feuding nations together, rather than tearing them apart. In reality, both parties deny any link between the Republican loss and US-Russian talks as they cannot recall any specific event that has made their WTO talks easier.
In fact, their talks will not be easy come Sunday. Both Russian and US officials are talking about the possible feuding points that both presidents will be discussing over Sunday’s meeting. Bush and Putin are expected to deal with the potentially uncomfortable question of U.S. sanctions imposed against two Russian companies — jet maker Sukhoi and arms exporter Rosoboronexport — for allegedly violating the U.S. Nonproliferation Act of 2000, even though Russia has steadfastly insisted that its dealings did not violate international laws. They will also be discussing the nuclear programs of North Korea and Iran. Russia, which has close trade ties with Iran and is building the country's first nuclear power plant, is resisting a U.S.-backed proposal for sanctions against Tehran.
Another aspect of their talks will probably include the Russian energy problems with Europe. Russia is ready to participate in the creation of a new energy configuration in the Asia-Pacific region and is seeking to expand ties with Asia to balance its traditional focus on Europe as its main energy market. This is because energy relations with Europe have hit a rough patch. Currently, Russia is under increased pressure to ratify an energy treaty that would require it to open up its oil and gas pipeline systems to outside producers. Russia has shown no interest in doing so, nor do they show any sings of compromise as ratification of such a pact would break the ability of gas giant OAO Gazprom — Russia's sole gas exporter — to control the price of gas it sends to Europe. For Russia, such a treaty would revoke any additional benefit they would get from trading with the US and other nations since gas and oil are their highest grossing product. Russia is the second-biggest oil exporter after Saudi Arabia and the world's largest supplier of natural gas.
Though there seems to be many problems that still lie ahead for US-Russian relations (not to mention Russian relations with most of Europe) before they can become trusting trading partners and before Russia can join the WTO, the talks and bilateral agreement that will take place on November 18, 2006, will still be looked upon as a milestone in the evolution of Russia from a former Cold War enemy to a growing trading partner.
