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Russia, Allies Edge To Joint But Separate WTO Bid

Trade officials said it was by no means clear that the three states, which will form a customs union from January 1, 2010, would enter the WTO simultaneously as they have pledged.
GENEVA (Reuters) -- Russia, Belarus, and Kazakhstan's efforts to join the World Trade Organization as a single customs union are likely to produce coordinated negotiations but could still see separate accessions, trade officials have said.

The three former Soviet states called a meeting of WTO members to discuss their plans, which may result in a face-saving climb-down.

"I don't see a problem with the three of them coordinating their work -- that's their call," Stefan Johannesson, the Icelandic diplomat chairing Russia's WTO accession negotiations, told Reuters.

But trade officials said it was by no means clear that the three states, which will form a customs union from January 1, 2010, would enter the WTO simultaneously as they have pledged.

Whether or not that happens was likely to emerge from the October 15 and subsequent meetings.

The European Union's trade chief said ahead of the meeting that she hopes Russia keeps open the option of joining the WTO unilaterally. "Russia needs to see strategically it is better to be in the WTO. It doesn't prevent it having strong relationships with their near neighbors," EU Trade Commissioner Catherine Ashton told Reuters in an interview.

Russia is by far the biggest economy still outside the 153-member WTO and has been trying to join for over 16 years.

Frustration at the drawn-out talks, which many in Moscow put down to political considerations, has often boiled over, with officials suggesting that Russia may not join at all, or that the WTO needs Russia more than Russia needs them.

Putin's Proposal

However, only days after EU and U.S. officials spoke of Russia finally getting in this year, Prime Minister Vladimir Putin threw the talks into turmoil by announcing on June 9 that Russia would only enter the WTO together with its two neighbors whose own accession negotiations are far behind Moscow's.

The move aimed to bolster the future customs union, part of Russia's strategy of strengthening ties with other former Soviet states, and may also have been an attempt by Putin to regain the initiative in the talks.

"It's a reflection of their domestic politics, I guess," said one senior trade official, acknowledging that the proposal has become a little clearer in the intervening months.

There is no precedent for a customs union to negotiate joint membership, and WTO members were perplexed by the legal implications.

Kazakhstan's chief WTO negotiator, Zhanar Aitzhanova, added some clarification last week when she said the three states could adopt a twin-track approach.

They could negotiate as a customs union on issues such as the common external tariff that the union would be responsible for, but on other questions such as services and sanitary rules continue to negotiate separately, she told Reuters on October 7.

But Johannesson said on October 14 that the joint approach could seriously delay Russia's accession.

For instance Russia would have to wait while Belarus and Kazakhstan catch up in areas already agreed by Moscow.

And if the customs union -- which itself is still evolving -- takes a different line on such questions, Moscow would have to reopen them and start afresh.

The WTO accessions process requires candidates to negotiate both with individual members bilaterally, and with the WTO as a whole, represented by a working group of interested countries which any existing member can take part in.

That gives not only a decisive say to major trading powers like the United States and European Union, but an effective veto to every member.

So even when the details of the customs union are worked out, Russia and other WTO members will need to convince Georgia, with whom Russia fought a war last year, to let Russia in.

Georgia has blocked formal work on Russia's candidacy, arguing that Moscow's support for breakaway Georgian regions involves illegal interference with customs posts on its internationally recognized border, but is allowing negotiations to proceed informally.

compiled from several reports