Russia's proposal for joining the WTO as a single customs bloc with Kazakhstan and Belarus is "unworkable," a top US trade official said Wednesday, fueling doubt over Moscow's application. "According to most members of the WTO (Russia's proposal) is just unworkable, unprecedented and would only delay matters," US Secretary of Commerce Gary Locke told reporters.
"The United States wants greater clarification with respect to the statements by Prime Minister Vladimir Putin." Putin baffled the World Trade Organisation last month by announcing that Russia would alter its accession bid and seek membership as a single customs bloc with two of its ex-Soviet neighbours, Kazakhstan and Belarus.
Locke expressed surprise over Moscow's move, saying that prior to Putin's announcement Washington had been "on the cusp" of an agreement with Russia on its accession by the end of the year. "The bottom line is that the United States and Russia were on the cusp of reaching an agreement about accession to the WTO," he said. "Russia in our view was very close to fulfilling various requirements at least from our side.
"All of us pointed out that we were a bit suprised and a bit mystified by their proposal." He added, however, that the United States was still supportive of Russia's long-delayed efforts to join the trading bloc: "We're still very hopeful and very eager and very supportive of Russia's WTO accession." Locke was in Moscow travelling with US President Barack Obama.
In meetings with Russian ministers this week, Locke said, Moscow's proposal had been described to him as a "parallel track" entry plan by which all three ex-Soviet states would continue their accession negotiations independently but in consultation with each other. But Russian Economy Minister Elvira Nabiullina reiterated Moscow's earlier position that Russia would seek entry only once its customs bloc with Belarus and Kazakhstan was in place from 2010.
"This is a done decision and we are synchronising our actions together with Kazakhstan and Belarus because the customs union will be effectively formed from January 1, 2010," Nabiullina said, quoted by RIA Novosti news agency. "We will try to perserve the maximum amount of agreements already reached by Russia in accession talks," she added.
"But our position is unified: We will form a customs union and without fail continue talks on the accession of all three countries to the WTO." Putin's shock announcement stumped trade negotiators and again halted the already tortuous 15-year process for Moscow to join the WTO on its own. Russia is the largest world economy still outside the WTO, and the delays in talks have recently been marked by growing expressions of Russian impatience.
Moscow has often accused Washington of purposefully dragging its feet and of hypocrisy in negotiations for not lifting some Cold War-era trade barriers. A persistent bone of contention is the Jackson-Vanik amendment, by which the United States put sanctions on the Soviet Union for its restriction of the rights of Jews to emigrate. The law remains on the books.
While Obama's administration supports "adjusting" the 1974 law, Locke said, the United States first expects trade concession from Russia, such as lifting recent restrictions on US meat imports. "The president made it very clear that this is not something he can do unilaterally," Locke said. "It requires congressional approval and the members of the Congress are looking for some sort of sign of true interest by the Russian government in encouraging US investment.
"To take this to the Congress would require steps by Russia... on some of the issues that are of a great concern to American companies, namely bans on food products like pork and poultry." Locke added that the two countries had agreed to form a trade commission to smooth such issues and boost economic ties, which remain comparatively small. The US commerce secretary also attended a ceremony on Wednesday in which American soft drink giant PepsiCo inaugurated the largest bottling plant in its world network, located in a town outside Moscow.