Russian bid to join WTO needs work-chairman

By Juliane von Reppert-Bismarck

GENEVA, May 31 (Reuters) – Russia must announce next month how it will end a raft of protectionist measures if it wants to join the World Trade Organization this year, the diplomat vetting Russia’s entry to the trade body said on Tuesday.

Leaders of the G8 group of the world’s most advanced economies called last week for Russia to enter the 153-member body by the end of the year, a move expected to boost Russia’s GDP as well as its international standing.

But Russia must first dismantle wide-ranging programmes such as industrial subsidies, import limits on meat, red tape, foreign investment restrictions and health standards that slow trade, said the WTO’s Russian Accession Working Group chairman.

“There is a lot of work still to be done and challenges indeed to deal with. Whether we conclude this year will depend on the speed at which the Russian Federation delivers the few required sections,” chairman Stefan Haukur Johannesson told journalists after negotiations between WTO members and Russia.

For the complex talks to have time to hit this year’s deadline, the WTO would need to see Russia’s proposals by the end of June, the Icelandic diplomat said.

Russia is the world’s largest economy outside the WTO, and its accession would give a welcome boost to an institution reeling from a decade of failed attempts to update global trade rules known as the Doha round.

 

GEORGIAN OPPOSITION AND CUSTOMS UNION

Russia’s neighbour Georgia has opposed Russian accession since a brief war in 2008, but Johannesson said he was hopeful a closed-door mediation process under way would resolve this.

Russia will also have to guarantee that a customs union launched in 2010 with Belarus and Kazakhstan — slated to create a border-free economic area in 2012 — will not override Russia’s obligations to the WTO, he said.

The World Bank estimates WTO entry could increase the size of the Russian economy by 3.3 percent in the medium term and 11 percent in the long term. It expects Russian import tariffs would fall from 14 percent on average to 8 percent.

Fund managers say WTO entry could boost sectors such as steel by removing export barriers, but more broadly it would mark Russia’s integration into the world economy, a step that could improve investor perceptions.

U.S. President Barack Obama said last week a deal would be crucial to global economic growth.

“We are confident that we can get this done,” Obama said. “It will be a key building block in expanding trade and commerce that create jobs and benefit both countries.” (Reporting by Juliane von Reppert-Bismarck; Editing by Jonathan Lynn)