Russia's WTO bid threatened as Georgia talks fail

Reuters News
Posted: Oct 08, 2011 2:53 PM
Russia's WTO bid threatened as Georgia talks fail

By Margarita Antidze

TBILISI (Reuters) - Talks between bitter rivals Georgia and Russia over Moscow's bid to join the World Trade Organization (WTO) ended without agreement on Saturday, and Georgia said it would block Russian accession unless Moscow's position changes.

The failure to resolve a dispute rooted in a 2008 war between the ex-Soviet neighbors undermines Russia's chances of joining the WTO this year, a target set by Moscow and the United States, and could worsen Russia's relations with the West.

"The negotiations are over and we can say that they collapsed, ended with no result at all," Georgian Deputy Foreign Minister Sergi Kapanadze, the head of his country's delegation to the talks in Switzerland, told Reuters by telephone.

Since the WTO, a 153-nation trade rules body, makes decisions by consensus, Georgia -- a pro-Western NATO aspirant -- has an effective veto over membership for the much larger Russia.

Kapanadze said the sticking point was Russia's refusal to let Georgia have access to information about trade in the breakaway Georgian regions of South Ossetia and Abkhazia, which Moscow recognized as independent nations after the five-day war.

"Georgia cannot give its consent to Russia's entry to the WTO until Russia changes its position on trade within the occupied territories," Kapanadze said, referring to the two regions, where Russia maintains sizable military forces.

Kapanadze said the talks were the last agreed round of negotiations "and we do not see any sense in continuing talks just for the sake of talks." But a Russian source close to negotiations said there was an agreement to resume on October 17.

Russia is by far the largest economy outside the WTO and has been seeking entry for 18 years.

Georgia halted WTO talks with Russia in April 2008 after the Kremlin ordered the lifting of economic sanctions against Abkhazia and South Ossetia in the run-up to the war that August.

Russian forces repelled a Georgian attempt to regain control of South Ossetia, which has long been outside the sway of the central government in Tbilisi, and penetrated deep into Georgia before an EU-brokered ceasefire was reached.

Almost all remaining trade issues between Russia and WTO members including the United States and European Union have been resolved since U.S. President Barack Obama made support for Russia's bid a part of efforts to improve ties with Moscow.

Before it can join the WTO, Russia also needs to conclude multilateral talks with a "working party" which is seeking assurance that Russia's laws are in compliance and guarantees that it treat trade issues appropriately after it joins.

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"We are really close and just fine tuning and finding the appropriate language," an EU official told Reuters on Friday.

Senior negotiators have said it would be possible to admit Russia formally at a ministerial meeting in December if accession talks remain on track and the dispute with Georgia is settled.

Russia's chief negotiator suggested Moscow would not give in to Georgia's demands.

"What Georgia is asking of us is not within the sphere of responsibility of the WTO," Maxim Medvedkov told Reuters by telephone.

In pointed remarks this week, Russian Prime Minister Vladimir Putin urged the United States and the European Union to help overcome Georgia's objections.

Failure to bring Russia into the WTO soon could damage relations between Russia and the West as Putin prepares to return to the presidency in an election next March.

(Additional reporting by Gleb Bryanski in Moscow and Tom Miles in Geneva; Writing by Maria Kiselyova; Editing by Steve Gutterman and Mark Heinrich)