Russia took a "big step" towards joining the World Trade Organisation after 18 years of trying when it secured on Thursday the first of two approvals needed for its membership to the trade body. "It has been a long journey but today Russia has taken a big step towards its destination of membership in the WTO," WTO director-general Pascal Lamy said.
"Today we have concluded 18 years of work as a result of that the Russian Federation is about the cross the goal," he said at a press conference when he also presented Russia's lead negotiator Maxim Medvedkov with a T-shirt bearing the slogan: "Welcome to the WTO ... finally." Russia applied to join the trade body in 1993 but talks dragged on and its brief war with Georgia in 2008 further delayed the bid.
No other country has had to barter so long before being granted entry. China was the previous record holder with 15 years of negotiations for membership. On Thursday, negotiators finally approved a package of reforms and commitments pledged by Russia in order to join the WTO. The package will now be sent to a conference of ministers in mid-December for the second and final approval for Russia's accession. The Russian parliament would then have up to June 15, 2012 to ratify the accord and bring it into force, with Medvedkov saying the deal should be ratified "early next year." "It is gratifying to see that after 18 years of sometimes uneasy negotiations, the process of WTO accession is completed today," he said.
"The agreement ... brings us into the system of multilateral trading rules, creating new opportunities for our traders and investors and enabling us to protect their commercial interests even more effectively than before." Moscow cleared its last hurdle for WTO accession just Wednesday when it finally clinched a deal with last hold-out Georgia, which was able to veto any accession bid by virtue of its membership to the trade body.
In all, Russia sealed 30 bilateral agreements on market access for services and 57 on access for goods in order to secure the green light from other WTO states. For the overall package, Moscow agreed to cut its tariff ceiling from the 2011 average of 10 percent for all products to 7.8 percent.
The average tariff ceiling for agricultural products is cut to 10.8 percent from 13.2 percent currently, with manufactured goods at 7.3 percent, down from 9.5 percent. Russia also agreed to limit farm subsidies to $9 billion in 2012 and to gradually reduce them to $4.4 billion by 2018.
It further pledged that all producers and distributors of natural gas in Russia would "operate on the basis of normal commercial considerations" and that the 49 percent foreign equity limit in the telecommunications sector be scrapped four years after accession. Lamy noted that Russia's commitments were tougher than those undertaken by China for its accession to the WTO.
"Overall Russia joins on terms which are significantly more ambitious than China did but let's remember that China joined 10 years ago," Lamy said. The chair of the negotiating group for Russia's membership, Stefan Johannesson, described Thursday's breakthrough as a "historic achievement for the WTO. "I am convinced that Russia's accession to the WTO will bring substantial benefits both to Russia and to the members of this organisation," he said.
EU Trade Commissioner Karel De Gucht described it as "an important step for Russia's economic development and for the multilateral trading system." He added: "I now look forward to the upcoming WTO ministerial in December to formally endorse Russia's accession to the WTO membership."
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