A debate in Foreign Policy over Russia's WTO accession. From Anders Aslund and Fred Bergsten
Russia has never been closer to WTO accession. The remaining hurdles are modest: sanitary rules for U.S. exports of chicken and pork, limits on future agricultural subsidies, rules for encryption, regulation of state-owned enterprises, and export tariffs for lumber. By and large, these issues can be settled bilaterally with the United States. If any query remains after the Obama-Medvedev summit, it can be concluded at the G8 and G20 summits in Toronto that follow on June 26-27. Russia is the only member of the G8 or G20 outside the WTO.
The real obstacle is the lack of mutual trust. Russian trade negotiators fear that the Americans will raise new concerns after they think they have settled all the outstanding issues. A year ago, American negotiators were thrown off balance by Prime Minister Vladimir Putin's assertion that Russia's customs union with Belarus and Kazakhstan had priority over its WTO accession, but Russia has now made clear that WTO entry comes first and should proceed on its own. Therefore, Russia's accession needs to be decided politically by the presidents, and the outstanding technicalities could then be sorted out in a few months.
Now is the right time for Obama and Medvedev to resolve the last obstacles on the way to Russian entry to the WTO. The resulting encouragement of Russia's modernization is very much in the interest of both countries. Russia urgently needs to modernize, and the United States, bogged down in Afghanistan and facing the prospect of a nuclear-armed Iran, needs Russian cooperation more than ever.
And a reply by David Christy:
Russia has managed to turn WTO accession on its head by acting as a deal maker, not a deal taker. Year after year, Russian negotiators have signaled that they have made more progress than is in fact the case and have refused to budge on key issues. They are playing a waiting game, counting on a variety of extraneous issues to make its set of proposed commitments (which WTO members would have rejected out of hand had any other country made them) more attractive. Compared with the accessions of China and Saudi Arabia, the reforms Russia has offered and implemented are far less extensive.
Russia might benefit from the major international players' preoccupation with other priorities, for which they require Moscow's help. The U.S. negotiating position has fluctuated as part of a larger dance relating to its effort to isolate Iran. The European Union has yet to place pressure on Russia, presumably because of the reliance of many of its member states on Russian energy. And there are also powerful institutional factors affecting the negotiations: The WTO, put simply, needs a win. The Doha Development Round, meant to lower global trade barriers, is still going nowhere. Russian accession would put a smile on everyone's face, at least for a while, and would help cement WTO Director-General Pascal Lamy's legacy.
These factors tilt the balance toward WTO members' acceptance of a very modest set of commitments for Russia's entry. Should this happen, Moscow's strategy will have succeeded brilliantly -- and in spite of a substantial list of open concerns. Medvedev's June 24 agreement to remove the ban on U.S. poultry imports is significant, but the open issues range from straightforward trade issues, such as high export duties on timber, to the Kremlin's leveraging of its energy sector to achieve political goals, such as during its dispute with Ukraine in January 2009. In addition, the impact of the customs union between Russia, Belarus, and Kazakhstan on all three members' accessions will be profound, but has yet to be fully assessed. One thing is certain: If the customs union requires changes to Russia's trade regimes, WTO negotiations which had closed will be reopened.
As Russia pushes for accession, time is on its side. Aslund and Bergsten's article was well-timed for Russia's charm offensive in Washington this week. But with each article like theirs, Russia's negotiating position grows stronger.