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State Duma ratifies bill on WTO norms priority over Customs Union commitments

October 04, 2011, 21:39 UTC+3

The Customs Union has no mechanism as yet to regulate the participation of its members in international unions

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MOSCOW, October 4 (Itar-Tass) —— The State Duma ratified on Tuesday an agreement on the functioning of the Customs Union of Russia, Belarus and Kazakhstan within the world trade system, including the World Trade Organization (WTO).

The Customs Union has no mechanism as yet to regulate the participation of its members in international unions. Therefore, member countries of the Customs Union seeking admission to the WTO “may encounter contradictory international commitments,” the State Duma Committee for the Economic Policy and Business said.

According to the ratified agreement, WTO norms concerning the areas regulated by the Customs Union become a part of the legal framework of the Customs Union. They also acquire priority over the commitments within the Customs Union.

In the opinion of deputies, the ratification of this document “will increase the efficiency of negotiations on the admission of Customs Union member countries to the WTO.”

Russia hopes to end the negotiations on its accession to the WTO before the end of this year, First Deputy Prime Minister Igor Shuvalov said at an annual meeting of the U.S.-Russia Business Council on Tuesday.

“Together with the U.S. administration, we have done hard work to make possible Russia’s accession to the WTO before the end of this year. We hope that the only remnant of the Cold War – the Jackson-Vanik Amendment – would be cancelled with the assistance of the American business community,” Shuvalov said.

Russia is the only large world economy outside of the WTO, he said.

Shuvalov held WTO negotiations with U.S. high-ranking officers, among them Vice-President Joseph Biden, on Monday.

“Hopefully, the process [of the entry into the WTO] will end in the near future,” Shuvalov said.

President Dmitry Medvedev said at the St. Petersburg International Economic Forum this June that Russia might enter into the WTO in 2011 if the matter was not politicized. “There is no alternative to deeper integration of the Russian economy into the global [market] either. The same as parachutes, markets work only when they are open,” Medvedev said. “Without an open economy, we will fall and hit ourselves hard, so we will lower barriers to foreign investments and hope to complete the Russian accession to the WTO and, later on, to the OECD. I think it realistic to complete the WTO accession process this year, if no political games are played again,” he said.

“We have long been prepared for entering into the WTO more than many other countries, both big and very small. However, they want us to make too many concessions. This is an unacceptable approach; we will never agree to decisions, which are purely disadvantageous for Russia. If our partners appear to be unprepared for a fair arrival of Russia in international organizations, it would be a bad script. This way or another, certain political or economic interests must not hamper our successful development.

The Russian entry into the WTO will make it possible to play by non-discriminative rules, Presidential Aide Arkady Dvorkovich said earlier this year. He recalled that Russia expected to complete the accession process before the yearend. “The partners of Russia have similar expectations. We have a very insignificant number of disagreements with our partners, and most of them apply to the common rules rather than to Russia as such,” he said. “There is one disagreement related to Russia’s very long entry into the WTO, but this is not our fault. In the long accession process, we made decisions that disagreed with the rules of the organization. We do not want to repeal these decisions before we enter into the WTO. We have commitments to investors, we have contracts, and the most important is that our partners at the negotiations must understand that the WTO is not a goal in itself but an instrument and that they need Russian membership in the WTO no less than Russia needs it,” he said.

The United States hopes that Russia will join the WTO by the WTO ministerial conference in December 2011, a high-ranking representative of the U.S. administration told Itar-Tass on Monday.

The U.S. keeps interacting with Russia within the working group on the Russian accession to the WTO in order to make the favorable decision by the ministerial conference of December, he said. In his words, the sides have done everything to remove their disagreements, and the U.S. fully supports the Russian entry into the organization, he noted.

According to the source, the Russian joining of the WTO meets interests of not only Moscow, many small and big U.S. companies have called for that membership.

Another high-ranking representative of the U.S. administration said that the U.S. kept working with Russia in the spheres of the WTO and a normal trade relationship.

Some multilateral problems remain in the Russian accession to the WTO; as soon as they are removed the Congress will make steps so that U.S. companies benefit from the Russian membership in the organization, the source said.

Asked whether such steps might be made at the Congress before the end of the year, he said they were so far concentrated on the three free trade agreements with South Korea, Panama and Colombia. Further steps will be considered when the agreements are approved, he said.

The WTO was established on January 1, 1995, as the successor to the General Agreement on Tariffs and Trade (GATT) that had been operating since 1947. This is the only international body supervising world trade. The WTO has the status of a UN specialized agency. It is headquartered in Geneva.

The WTO has 153 members at present. Negotiations on the admission of a new member are held within the working group, which unites countries that have unsettled trade problems with the candidate.

As a rule, negotiations focus on four areas: accessibility to the goods market, agriculture, accessibility to the market of services, and systemic matters. The candidate must bring its national laws in correspondence with the WTO rules. Two-thirds of votes of WTO members are sufficient for the admission of a new member. Regularly, the accession process takes a decade.

Russia applied for membership in the WTO in December 1994. The number of its negotiating partners kept growing through the years, and the latest working group had 58 members – the largest working group ever in the entire history of the WTO. Six-year negotiations with the United States were the most difficult for Russia (the bilateral protocol was signed on November 19, 2006). The negotiations with the European Union also lasted for six years (the protocol was signed on May 21, 2004). Full consent was reached with the United States and the EU in the second half of 2010, and Russian officials said that Moscow was able to become a WTO member by the end of 2011.


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