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Moscow Times
August 26, 2008
Putin Eyes Retreat On WTO Accords
By Anna Smolchenko / Staff Writer

Prime Minister Vladimir Putin said Monday that Russia should abandon some of the commitments it made during World Trade Organization accession talks.

Putin's announcement is a first sign that an unraveling war of words between Russia and the West is likely to go beyond empty threats. Also Monday, President Dmitry Medvedev warned that Russia might cut ties with NATO.

Putin said at a regular meeting of his Presidium that it was "sensible" to abandon some of the commitments Russia made during WTO accession talks.

"We don't see or feel advantages from membership, if they exist at all. But we are carrying the burden," Putin said in comments posted on the government web site. "Basic fairness should prevail."

Russia's readiness to renege on agreements reached over more than 15 years of WTO talks appeared aimed at pre-empting a Washington threat to deny Russia entry into the WTO as punishment for its military action in Georgia. Senior U.S. officials have suggested that Russia's war with Georgia put its integration into the world economy at risk.

Putin said Russia would continue WTO accession talks but at its own pace and not at the expense of its economic interests. "Certain sectors of our economy, primarily agriculture, are carrying a fairly heavy load," Putin said.

First Deputy Prime Minister Igor Shuvalov said a list of the agreements Russia would seek to abandon had been put together by the Economic Development Ministry, but he declined to disclose it.

Russia has been negotiating to enter the trade body since 1995 and had been ready to wrap up all talks by year's end. It has finalized bilateral agreements with all of the WTO's 153 members, except for Georgia, which rescinded its backing in 2006.

Officials say Russia has done its best to meet WTO requirements but that the West has unfairly politicized its support of the bid.

"In the past eight to 10 weeks, we've worked along all the fronts in the most active manner to demonstrate to our partners the seriousness of Russia's intentions with regards to the WTO," Shuvalov told reporters Monday.

He took issue with remarks by U.S. Commerce Secretary Carlos Gutierrez in the most recent issue of Germany's Der Spiegel magazine, in which he said Russian military actions in Georgia had put the country's WTO membership at risk. Shuvalov said this contradicted Gutierrez's pledge to support the bid at an economic conference in St. Petersburg.

While it remains unclear what long-term effects the WTO move will have, it may worsen perceptions of Russia in the short term, said Katya Malofeyeva, an analyst at Renaissance Capital. "A country that is openly moving away from the WTO -- although this is not the case -- is considered an economy that is closing up somewhat," she said.

"Membership of the WTO is not a high priority for Russia. It is more a 'box to be ticked' rather than a critical piece of the immediate economic program," UralSib said in a recent research note.