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Despite Boost In U.S. Support, Russia's WTO Bid Still Faces Opposition In Georgia

  • Richard Solash

U.S. President Barack Obama and visiting Russian President Dmitry Medvedev engaging in some free trade at Ray's Hell Burger in Arlington, Virginia on June 24.

U.S. President Barack Obama and visiting Russian President Dmitry Medvedev engaging in some free trade at Ray's Hell Burger in Arlington, Virginia on June 24.

Addressing reporters eager to hear what came out of a meeting between two of the world's most powerful men, U.S. President Barack Obama and Russian counterpart Dmitry Medvedev spoke of beef and chicken.

Beef because Obama, in a show of U.S. hospitality, had taken Medvedev to his favorite burger joint for lunch that day. And chicken because the package of agreements struck by the two leaders included a pledge by Medvedev to allow U.S. poultry imports back into Russia after they were banned due to what Russia said were safety concerns.

That agreement brought the United States one step closer to fully backing Russia's bid to join the World Trade Organization (WTO), whose members conduct 95 percent of world commerce. Russian accession, Obama said, would benefit all involved.

"I emphasized to President Medvedev, I emphasized to his entire delegation, and I now want to emphasize to the Russian people: We think it is not only in the interests of the Russian Federation, but in the interests of the United States, and in the interests of the world, that Russian joins the WTO. So this is something that we want to get resolved," Obama said.

Concerns about agricultural subsidies, insufficient regulation of state-run companies, and lax intellectual property laws have all been part of U.S. reluctance to support Russia's WTO bid -- even after the countries signed a bilateral WTO agreement in 2006.

Obama said his economic negotiators were working hard with the Russians on tackling the "difficult issues" that remain, saying that they require "significant work." Their resolution, he suggested, "may be in the hands of the Russian government."

Medvedev himself described the outstanding issues as "minor problems" and said negotiators were expected to complete their work by the end of September.

Tbilisi Two-Step

But overcoming longstanding U.S. objections may not necessarily guarantee smooth sailing for Russia. The WTO, which oversees trade treaties and facilitates access to export markets, has 153 member states -- all of which are involved in the decision to admit new countries. Among those members is Georgia, which has long been at odds with its aggressive neighbor to the north.

Tbilisi, long angered by Russian support for its breakaway territories of Abkhazia and South Ossetia, as well as a Russian embargo of Georgian wine and mineral water, for years threatened to use its WTO membership to block Russia's bid. A Georgia-Russia WTO working group was established but has so far failed to reach any agreements.

In recent months, opposition to Russia's WTO bid appeared to die down in Tbilisi, prompting speculation the government, chastened by the August 2008 war between the two countries, had changed its position.

But Niko Mchedlishvili, head of the Georgian prime minister's press office, told RFE/RL's Georgian Service there has been no such switch.

The 2008 war between member Georgia and Russia complicated already-complex efforts by Moscow to join the WTO club.
"The government's position remains unchanged. It stays the same as it was several years ago," Mchedlishvili said. "Not a single point has been changed in the document which resulted from the negotiations between Georgia and Russia. Therefore, all talk about a possible concession from Georgia's side during the negotiations with the World Trade Organization is an absolute lie."

Obama and Medvedev, during their Washington press conference, mentioned Georgia only once -- in connection to U.S.-Russian disagreement over Abkhazia and South Ossetia -- with no mention of Tbilisi's potential role in the WTO process.

Multiple Obstacles

Russian officials have made it clear that they consider full U.S. support the true necessity for gaining membership, which, according to a study commissioned by the World Bank, would encourage foreign investment and, by one measure, would mean Russia could annually gain about 3.3 percent of its GDP, or about $53 billion a year.

Last year, Russian Deputy Prime Minister Igor Shuvalov said Russia's accession depended almost entirely on the United States. Indeed, Russian officials and others have held the U.S. largely responsible for prolonging Russia's 17-year accession process. Ahead of his U.S. visit, Medvedev said pointedly that "the ball is in the U.S. court."

Many experts agree.

"This [Georgia's objection] is not the first issue. This will be left until later," Anders Aslund, senior fellow at the U.S.-based Peterson Institute for International Economics, said. "The main issues now are between the U.S. and Russia. One just needs to clean the table and [decide] how it should be done, and that's a couple of months of negotiations to sort out the technical things. But the important thing is that the U.S. and Russia trust one another."

With the success of the U.S.-Russian "reset" being hailed in both Washington and Moscow, trust indeed appears to be at its highest in years.

Gone is the plan -- put forward by Prime Minister Vladimir Putin -- to enter the WTO in a customs union with Belarus and Kazakhstan, a move that clashed with WTO protocol and befuddled the United States. And with Medvedev tour of the U.S. tech hub Silicon Valley, which preceded his trip to Washington, the Russian leader is sending the message that his country is serious about changing and modernizing its economy.

'Every Opportunity'

Up next is the G20 summit in Canada, to which Medvedev and Obama were traveling together. Russia is the only G20 country that is not a member of the WTO, and after Medvedev's U.S. trip, that looks increasingly likely to change.

And yet, the Georgian problem remains. Matthew Rojansky, deputy director of the Russia and Eurasia Program at the Carnegie Endowment for International Peace, said Medvedev may be looking to Obama to eliminate that hurdle.

"Barring, potentially, a new [Georgian] government which has a different attitude about how you do conflict resolution with your enormous northern neighbor," said Rojansky, "the question is what influence the United States can have vis-a-vis Georgia if we [the United States] are set on paving the way to Russian accession."

The Russian news agency RIA-Novosti quoted Medvedev at Stanford University as saying, "As soon as Georgia gets a new leader we will have every opportunity to restore ties."

Until then, the United States may be looked to help bridge the impasse. Whether it's willing to do so, however, may be influenced by the state of Washington's evolving relations with Georgia.

Lincoln Mitchell, professor of international politics at Columbia University, said the United States, if it wanted to, could offer Georgia economic or other benefits as incentives to sway the Georgian stance, but is unlikely to use threats to strong-arm its Caucasian ally.

"My sense of things is that the U.S. isn't in a place right now where it is going to pressure Georgia to do this, particularly given the way Georgia -- I would say with some success -- has created this narrative of 'the U.S. is selling us out over Russia,'" Mitchell said. "I don't think [the United States] would then go in that context and ask [Georgia] to do something like this."

Aslund said that ultimately, a loophole in the accession process could allow Russia to join the WTO in spite of Georgian disapproval. WTO members must reach a general agreement, or "consensus" of potential members, which is technically not the same as a unanimous vote.

According to a spokesperson from the WTO, however, an applicant country doesn't come up for general WTO review unless disputes with individual members have been previously resolved.

Marina Vashakmadze contributed to this piece from Tbilisi

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