Russia signed a Swiss-brokered deal with Georgia on Wednesday that removes the last big obstacle to Russia joining the World Trade Organisation after 18 years of negotiations. Russia's accession will be the biggest step in world trade liberalisation since China joined the WTO a decade ago, sealing Moscow's integration into the world economy two decades after the collapse of the Soviet Union.
The breakthrough after three years of stalemate with Georgia came at the last possible moment, one day before the WTO meets to finalise overall terms for Russia's entry. "The whole Russian-Georgian package is now ready," said Russia's chief negotiator Maxim Medvedkov.
"It's over. We've signed the document," said Sergi Kapanadze, Georgian deputy foreign minister and senior negotiator. "There are no more obstacles from Georgia to Russia to becoming a member of the WTO." Both sides had hailed a compromise deal last week, after shuttle diplomacy by Swiss President Micheline Calmy-Rey, whose government brokered the deal. Lingering mistrust meant that many trade officials had been wary of saying the obstacle was cleared until both sides had signed a final agreement.
One participant said the negotiation had been like a game of chess throughout, with tiny Georgia using its WTO veto to claw back some leverage over Russia, which routed Georgian forces in a war over a border region three years ago. Georgia had been under strong pressure from the United States and European Union to let Russia into the WTO, widely seen as a prize not worth sacrificing because of a border dispute between Russia and its tiny southern neighbour.
The United States has been a strong backer of Georgian President Mikheil Saakashvili, whose government sent troops to fight alongside US forces in Iraq, and the EU is offering a free trade agreement, details of which are not yet public. Georgian negotiators have denied they were swayed by diplomatic lobbying and say the EU trade deal has no link with the Russian talks, always maintaining they felt no pressure to let Russia join the WTO.
Russian accession, adding its $1.9 trillion economy to the vast bulk of the world that is already subject to WTO trade rules, will force Moscow to accept international standards and scrutiny and could add 3 percent to its gross domestic product in the short term, according to the World Bank. It will also be a big morale-booster for the WTO, the guardian of the world trading system, which has suffered a deep crisis of confidence over the failure of ten years of talks on deepening world trade, the so-called Doha round.