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First half 2003 critical for Russian entry to WTO
BOSTON (November 17 2002) : Russia could gain entry to the World Trade Organisation by the end of 2004, earlier than previously thought, if significant progress in economic and legal reforms are made in the first six months of next year, a senior WTO official said on Friday.
"I cannot give you a finite prediction, but I think it is safe to say that if real progress is made, then it would be possible for Russia to enter before year-end 2004," Rufus Yerxa, Deputy Director General of the WTO told investors at the 6th Annual Russian Investment Symposium in Boston.
Last year, Russian President Vladimir Putin put a tremendous emphasis on gaining entry into the 145 nation-strong trade body, making it one of his key policy goals before running into stiff resistance from business interests that are fearful they will lose out to foreign competition.
This resistance has slowed the process of badly needed reforms to the energy sector where the government holds major stakes. But there are some signs of hope.
Yerxa said there has been a renewed vigour within Russia's government in the last six moths to push forward and that has helped boost its chances for a quick entry.
"The building blocks are starting to fall in place, but the first six months of next year will be a critical test of whether it will succeed in gaining quick entry," Yerxa said.
Still, some analysts are not as optimistic.
"I don't think we'll see a membership, the earliest maybe sometime in 2005, but there are too many interests of the industrialists who want to keep Russia to themselves," said Peter Westin, chief economist at Aton Capital in Moscow.
There is also some resistance against a fast entry in Russia's Parliament, or Duma.
"Russia can compete in many areas, but we want capital to flow in, not finished goods because those businesses, as opposed to the raw materials sector, are not ready to compete with Asia," said Konstantin Remchukov, a member of the Duma who serves as chairman of the Public Council on Russia's accession to the WTO.
"We need another transition period with protections in order to build up our good Russian companies in order to compete by the western rules of the WTO game," he said.
Unless Russia and the WTO make progress in addressing reforms to most sectors of the economy, including agriculture, energy and transportation, Yerxa said upcoming Russian parliamentary elections in December 2003 followed by a presidential elections in March 2004 will only make negotiations more difficult.
"Then Doha gets in the way," Yerxa said, referring to the current Doha Round of trade talks for liberalising global markets in goods and services which is due to be completed by the end of 2004.
The Bush administration has thrown its support behind Russia's WTO bid, least of all for supporting its war against terrorism.
US Ambassador to Russia, Alexander Vershbow, told participants there is new and considerable momentum on the part of the Russian Parliament to make changes in the country's legal framework.
However, he followed that up by reading off a laundry list of areas where the US wants to see changes, with intellectual property rights at the top.
"I think this will be the biggest issue when our Congress weighs in," Vershbow said.
Courtesy Business Recorder
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Pakissan.com; Advisory Point
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