Russia's WTO Accession Pushed Into 2012

The chances of Russia joining the World Trade Organization by the end of the year are slim, according to the country's Economic Development Minister, who told a recent investment forum that failed talks with Georgia, and ongoing negotiations with the European Union, could drag the process into 2012 and potentially beyond.

Russia, the largest country outside of the trade bloc, had been widely tipped to receive approval from the WTO when member states convene in December, concluding what has been a protracted eighteen-year process.

With Georgia and Russia still at loggerheads over certain issues following the South Ossetia war, minister Elvira Nabiullina told forum attendees that “there is a very slight chance that we could finish the negotiations by the end of the year as planned”.

Responding to questioning on a timescale for talks, the Minister admitted that the Georgia setback could cause further years of delay, but said the government remained optimistic of gaining membership in 2012.

Russia has already completed much of the work needed to establish a trade regime compliant with WTO rules. In 2010 the nation concluded talks with the US, and the bulk of issues with the European Union have been resolved. Negotiations with Europe on a number of remaining areas are still ongoing.

An economist at the World Bank with responsibility for Russian affairs has said a 2012 deadline is achievable, particularly if an amicable solution between Georgia and Russia can be found.

It has been noted that WTO members could even take the unprecedented step of pushing through the nation's accession without the approval of Georgia, perhaps after outstanding issues with the European economic bloc have been resolved.

The WTO Agreement states that decisions must be approved by a two-thirds majority of members (currently at 153), but elsewhere in the Agreement, it is stated that the Organization's practice is to arrive at decisions by consensus, and that a vote is only taken when it is impossible to reach a consensus. A 1995 Council vote decided that consensus should take precedence over vote-based decision making.

September 22, 2011

Source: Tax News