Rocky start to Russia’s WTO membership

Ahead of this week’s EU-Russia Summit, where a new partnership and cooperation agreement could be signed, EU members, including Latvia, need to understand that Russia is nowhere near fulfilling the obligations it undertook when joining the World Trade Organization (WTO), as well as obligations in other agreements signed between the EU and Russia, European Parliament Member Roberts Zile believes, reports LETA.

“Ahead of the EU-Russia Summit, we must understand the kind of partner we are dealing with. Is this a democratic partner which observes human rights, fulfills its obligations and doesn’t dream of increasing its geopolitical influence in the territory of its partner? I strongly doubt this. It looks more like Vladimir Putin will arrive as the czar of Eurasia, with clear geopolitical objectives,” Zile emphasized.

According to Zile, Russia has not only shown its two-faced attitude towards previously-signed agreements, but also towards the WTO and the requirements of this organization.

EU Trade Commissioner Karel de Gucht agreed, telling reporters in Geneva on Dec. 13 that Russia needed to change its “unacceptable” behavior, wrote Reuters. “Next week we have a summit meeting with Mr. Putin in Brussels, but if they do not remedy what they have been - how do I say it? – wrongdoing in recent months, we will have to take action. I hope they realize that they have to do something about it and do it quickly,” De Gucht said.

He stopped short of saying the row needed to be resolved at the summit, but said it would be “an important meeting” in the process, and reiterated the EU’s threat of WTO action. “Let there be no doubt that if it continues like it is now, we will see each other back in Geneva.”

While the EU is upset about Russia’s restrictions on livestock, cars and wood, Russia has a problem with EU energy rules that threaten Russian control of a European gas pipeline. Russian gas export firm Gazprom has a 51 percent stake in the Nord Stream pipeline running from Russia to Germany, but EU law prohibits energy suppliers from dominating distribution networks.

Russia regards the rules as a trade restriction and could bring the case to the WTO, four months after it joined the body. Russian Energy Minister Alexander Novak said on Dec. 12 that regulators, companies and the European Commission would meet during the next week to discuss Russian concerns and the possibility of giving Gazprom a waiver.
Zile believes that relations between the EU and Russia are seriously hindered by Russia’s divide and conquer tactic to oblige certain EU countries to its will. “By obliging individual countries, Russia is basically dividing the EU, and lessening [the  EU’s] ability to commonly defend its interests in various areas,” Zile added.

On Dec. 13, the European Parliament passed a resolution on Russia, pointing out that the country can become a strategic partner of the European Union only if it shares and upholds the bloc’s democratic principles and values.
EU-Russia relations are still suffering from Russia’s failure to embrace democratic values fully and strengthen the rule of law. Yet talks on a comprehensive new EU-Russia pact must continue, despite Russia’s lack of enthusiasm for them.
The new agreement, which is to replace one signed in 1994, must provide a comprehensive, forward-looking and legally-binding framework for the further development of relations with Russia, MEPs say. They stress that respect for democratic principles, human rights and rule of law must be an “absolute prerequisite” for signing the agreement, as must Russia’s full compliance with its WTO obligations.

MEPs are concerned that the climate for the development of civil society in Russia is deteriorating. They call on Russia to put an end to the culture of impunity, endemic corruption, politically-motivated persecution, arrests and detentions. The Russian authorities should also refrain from using repressive measures against the political opposition, they add.
Fully-fledged political reform must accompany Russia’s economic modernization, MEPs say. The reform must focus on guaranteeing the rule of law and fighting corruption. The EU and Russia both stand to gain from Russia’s political modernization and economic restructuring, MEPs say.

The peoples of Russia and the EU must be joined in genuine partnership, the text says. It calls for rapid progress on a visa facilitation deal for academics, students, researchers, journalists, business people, civil society representatives and youth exchange schemes.

Progress with relations may not happen so fast. Some trade diplomats suspect that, unlike China, which took years to become a prominent player in the WTO’s dispute settlement system, Russia will quickly become embroiled in litigation.
Moscow and Washington, for example, have not even begun their WTO relationship, since the United States has not passed legislation to normalize trade relations with Russia, but they already show signs of starting off on the wrong foot.
In a statement released on Dec. 8, U.S. Trade Representative Ron Kirk and Agriculture Secretary Tom Vilsack said Russia’s new testing requirements on U.S. beef and pork exports “appear to be inconsistent with its obligations” to the WTO, implying that the case could eventually lead to litigation.