Russia finance minister says WTO entry will reform economy

(Reuters) - Russia has not given up hope of securing membership of the World Trade Organization in December and says accession will help it win a higher credit rating and reform its economy, Finance Minister Alexei Kudrin said on Tuesday.

Russia is the largest economy still outside the WTO and could become the 154th member at the group's next ministerial meeting in December if it overcomes differences with the European Union and Georgia does not block its entry.

"We have not given up on the possibility of securing membership at the ministerial meeting in December. There is just one small point that has not been agreed with the European Union," Kudrin told the Reuters Russia Investment summit.

"Entry to the WTO itself, if it happens in December, will be a structural reform of a global nature ... If we join the WTO, it will make up for delays in reforms in recent years."

Russian President Dmitry Medvedev said in August that Russia's chances of joining the WTO were "rather high." WTO Director General Pascal Lamy has also said the end of Russia's 18-year-old bid to join the world trade body "is in sight."

But a big issue still to be resolved is foreign automakers' objections to Russia's requirement that they commit to major Russia-based production if they want to take advantage of lower import tariffs for car parts.

Kudrin said entering the WTO and the Organization for Economic Cooperation and Development (OECD) would be a "good signal" that could help the world's top oil producer win a positive revision of its ratings.

Fitch Ratings and S&P have confirmed Russia's sovereign rating at "BBB."

Moscow, which has been in accession talks since 1993, also faces resistance from WTO member Georgia, with which Russia fought a brief war in 2008 and which has the right to veto Russian membership.

"The Russian side has not shown the necessary degree of flexibility, in particular on the issue which is of most importance to Georgia," said Tamara Kovziridze, Georgia's negotiator at the WTO.

If Russia wants to join by the end of the year, "relatively intensive work is ahead" for Russia, she said.

Georgia wants Russia to accept customs controls on their internationally recognised border, including the border with two regions inside Georgia that have rebelled against rule from Tbilisi and are loyal to Moscow.

September 13, 2011

Source: Reuters