WTO: Russian-Georgian deadlock

WTO: Russian-Georgian deadlock

The end of the year is coming. It is a deadline defined by the Russian authorities and their Western colleagues for a final decision on Russian entering the World Trade Organization. Moscow’s insistence is understandable: the point is not only in trade preferences and opportunities for coming to Western markets (which means development of the real economy sector), but also in Russia’s image, which is the only member of G20 without WTO membership. Such situation prevents attraction of investment in industry except oil industry. The Russian authorities are aimed at releasing the budget from oil-dollar dependence by promotion at the world markets alternative competitive production. The main obstacle to this aim is uncompromised position of Georgia, which relates its agreement to RF entering WTO with actual recognition of independence of Abkhazia and South Ossetia.

From a legislative point of view, the position of the Georgian government is reasonable. As WTO regulates interstate trade, for establishing a normal trade regime between Russia and Georgia it is necessary the sides to agree on economy boundaries and customs procedures. It is impossible to agree on it. Moscow considers Abkhazia and South Ossetia as independent states. Tbilisi thinks that the Abkhazian and South Ossetian part of the Russian-Georgian boundary exist.

Initially, when Edward Shevardnadze was the president of Georgia, Georgia suggested establishing its customs points from the Russian side of the boundary, if not from Abkhazian or South Ossetian ones. Tbilisi referred to international precedents, existed in various conflict zones, for example, in the Middle East. However, this proposal is unacceptable for Moscow. After the war of 2008, Switzerland (a mediator) suggested a compromise variant: establish not Georgian customs points from the Russian side, but international observers from the EU. Such scheme is already implemented in the Transdniestria part of the Moldavian-Ukrainian boundary. However, for Russia it would mean denying recognition of Abkhazia and South Ossetia’s independence. That is why such “compromise” isn’t even considered in Moscow.
The head of the Georgian delegation at Geneva consultations, Sergy Kapanadze, stated after another round, held in the mid of September: “The talks failed. The Russian side doesn’t refuse from its uncompromised position. The foreign ministry of Georgia will consider the question of necessity of negotiations’ continuation at all.” The Russian minister of economy development, Elvira Nabiulina, stated on unsuccessfulness of the talks as well.

In general, Russia can become a member of WTO without Tbilisi’s agreement, i.e. through qualified majority of voices. However, it has never happened in the organization, and Moscow doesn’t want to be an exception. According to the head of the Russian delegation on WTO, Maksim Medvedkov, “it can cause serious image disadvantages for the country.” The only way out is pressure on Georgia through Western partners.

At the same time the West cannot directly press on Tbilisi, as it doesn’t recognize Abkhazia and South Ossetia and considers them as parts of Georgia. Georgian position on economy borders is logic, reasonable and legal for the Western countries. President Obama and Chancellor Merkel have many times gently urged Saakashvili to understand that Russia’s WTO entering corresponds to interests of the world economy. But what if the Georgian leader doesn’t agree? To launch economy sanctions and announce isolation of the country, soldiers of which die in Afghanistan, where Georgian contingent surpasses contingents of most NATO countries?

Meanwhile, Saakashvili managed to form strong lobby from representatives of opposition in the American Congress and the European Parliament.

It seems only one opportunity remains: returning of Georgian production at the Russian market as a pay for veto. But, first of all, political environment of Georgia considers it unbalanced exchange in the context of territorial integrity priority. Secondly, few people believe Georgian wines and Borjomi, producers of which have already found alternative markets and have been able to compensate loses, will return to the Russian market successfully.

Georgy Kalatozishvili, Tbilisi. Exclusively to VK.

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