The G8 adopted a statement that welcomed the progress made at the talks and supported Russia's accession as soon as possible.
Before the St. Petersburg summit, Russia, which has been working to join the trade organization for 12 years, had several unsolved issues with the United States. They concerned access to financial markets (the permission for foreign banks to open branches in Russia and for non-residents to work on the insurance market), civil aviation, agriculture (agricultural imports quotas and subsidies to the agricultural sector), phytosanitary control and intellectual property rights protection.
On some of these issues, Russia and the U.S. had reached agreement ahead of the summit. The day before, the Russian Finance Minister announced that a preliminary agreement on financial services had been worked out. The U.S. gave up its demand regarding opening foreign banks' branches in the Russian Federation, whereas Russia no longer objected to branches of foreign insurance companies, he said. Later, Economic Development Minister German Gref said intellectual property protection was no longer on the agenda. Then came the news that Russia and the U.S. would not sign the protocol on Russia's WTO accession during the summit because of several remaining disagreements on trade issues.
One of them, Gref said, was not too significant: application of veterinary standards to U.S. beef and pork imports. The United States insisted that Russia should issue a certificate for these imports without auditing the American veterinary control system, but Russia refused to import meat that had not gone through inspections.
The fact that the talks that already reached the final stage were suspended because of a minor issue, when a compromise had been found on more serious ones, makes one wonder whether Russia's partners are ready for it to become a WTO member.
Despite its active foreign trade, Russia has so far played by the rules it had not participated in establishing, and that sometimes worked against it. WTO accession would allow it to sit at one table with other member states and become involved in drafting and amending these rules in its own interests. In fact, Russia's WTO membership will make it a fully-fledged player in global trade. So, the fact that it is not a member, allows its critics to say that it cannot act as a leading player in the global economy. However, there is an increasing amount of objective reasons for strengthening Russia's foothold on the world markets. The Russian economy is growing steadily, the country has almost paid off its debt to the Paris Club and the IMF ahead of schedule and become a net creditor, and has removed the last restrictions on foreign currency regulations.
The abolition of discriminating measures against Russia would be very important for its further development. There is mounting evidence, however, that Moscow's partners are not ready to give up this discrimination and view it as an equal economic partner, primarily for political reasons. It is not only about the attitudes of American opposition, although the move by a group of Democratic senators, who urged President Bush not to hurry with completing the WTO talks with Moscow, could not pass unnoticed. All the more so, as the U.S. press engaged in an aggressive anti-Russian campaign. Apparently, the main reason is that the issue of Russia's WTO accession can be conveniently used to put political pressure on Moscow. That and criticism of failing democracy are among the last leverages the West has left after Moscow has paid off the bulk of its debts.
On the other hand, Russia is capable of defending its interests, which proves that it is already becoming a leading player on the global stage. A lot has changed since the moment when the WTO talks started in the 1990s and when Western countries had huge influence on market reforms in Russia. Russia has strengthened its position substantially. It is still interested in joining the WTO, but on its own terms, as the Russian authorities have repeatedly said. Its talks with WTO member states have been very difficult. Russia received many demands which other countries did not have to meet prior to their accession. Russia, however, stuck to its position, emphasizing that it would negotiate for acceptable conditions. President Putin said at the summit that Russia would continue talks, "defending its national interests."
Moreover, WTO accession may cause certain problems for Russia, as not all domestic industries would be able to stand competition. Therefore it is not interested in accepting additional commitments. Foreign Minister Sergei Lavrov has even said that "Russia has other opportunities to develop its economy apart from joining the WTO."
Finally, it is important to keep in mind that Russia is a huge emerging market, attractive for many countries, including the United States, whose companies can push Russian firms aside in some industries. Russian partners cannot fail to understand that after the WTO accession it will become more predictable, as it will play by the same rules as all other nations. Apparently, this is why the Finance Minister Kudrin said he was positive that Moscow would come to terms with Washington. Russia will joint the WTO, even if it happens a little later than planned, he said.
So the deadline for signing the protocol with the U.S. has been extended once again, this time until November, when Putin and Bush are to meet at the APEC summit in Hanoi.
