17/11/2011

Russia to Join the World Trade Organization

After 18 years of negotiation, Russia is set to become a member of the World Trade Organization (W.T.O.). The world's 11th largest economy will be joining over 150 countries in the primary global institution dealing with the rules of trade between states. Three questions come to mind: 1) What took so long? 2) What changed? 3) Is this important?

Membership in the W.T.O. is determined by member countries. As a member-driven organization, the W.T.O. is based on consensus with any member state having veto power over new members. While there were several internal stumbling blocks concerning Russia's agricultural and tariff structure, the major hurdle was a positive vote from Georgia. Relations between Georgia and Russia have been strained for years. With Georgia's accession to the W.T.O. in 2000 and the armed conflict between the two countries in August 2008, Georgia's position became the last obstacle for Russian admission.


Since the suspension of diplomatic relations between Russia and Georgia in 2008, Switzerland has represented Russia in Georgia and Georgia in Russia. This is part of Switzerland's good office policy based on its neutrality, just as it represents the United States in Cuba and Iran. The Swiss Foreign Office served as an intermediary between the two sides and successfully negotiated an agreement dealing with border issues and trade, specifically concerning South Ossetia and Abkhazia, two regions that have declared independence from Georgia post 2008.

While diplomatic relations between Russia and Georgia remain suspended, this agreement bodes well for the ongoing Geneva talks between the two countries concerning political/security matters. Although trade issues are not necessarily linked to other topics, there is no question that Swiss diplomacy has decreased tensions between the two sides. In addition, Switzerland's diplomatic help in Russian membership has decreased tensions between the United States and Switzerland concerning banking issues, according to the Swiss Foreign Ministry.

Russia's joining the W.T.O. has important consequences beyond improved relations with its southern neighbor. The accession commits Russia to follow W.T.O. rules or risk complaints by other countries with eventual monetary sanctions. Membership places Russia with the world's largest economies - China joined the W.T.O. in 2001 - in an organization based on transparency and the rule of law. Compliance with W.T.O. rules should help Russia's economy and encourage foreign investment. While the Doha Round of trade negotiations at the W.T.O. have not been completed, the W.T.O. continues to function as the primary platform for multilateral trade negotiations. Russia's membership is an important step for the organization as well as bringing post-Soviet Russia into the community of states in respecting a variety of policies within an overall international legal framework.

November 17, 2011

 

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