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Moscow Times
October 17, 2001
Kremlin Shifts Gears on WTO
By Torrey Clark Staff Writer

The Kremlin appeared Tuesday to take a deeper look at its strategy for joining the World Trade Organization in response to domestic pressures and a new-found coziness with America that could help it win more favorable terms.

"As tragic as the events have been, they could have a positive effect on international political relations with Russia," said Tanya Monehan, head of the Russian branch of the International Chamber of Commerce. "It could even speed up Russia's accession to the WTO on terms acceptable to Russia."

Russia has been trying to join the 142-nation trade body for nearly a decade, but its bid picked up steam over the past two years as President Vladimir Putin has made it a top priority.

Remarks made by Putin and Prime Minister Mikhail Kasyanov this week seem to indicate the government wants evidence to back up its demands for more concessions.

Putin told a group of small and medium-sized businesses Tuesday that he has confidence WTO membership would help the economy, but said the consequences for the business community should be examined thoroughly, news agencies reported. "We feel confident that joining the WTO will have a positive impact on the entire Russian economy, but details matter here, and we would like to hear your opinion on that," Putin was quoted as saying. "Many of our goods are not competitive, and we must carefully analyze the consequences."

Kasyanov on Monday ordered the Economic Development and Trade Ministry, which is in charge of WTO negotiations, to organize a comprehensive analysis of the pluses and minuses of Russia's entry.

Kasyanov spokesman Alexei Volin said Tuesday the analysis should be prepared by independent academics, either Russian or foreign or both. Kasyanov called for an independent analysis because existing departmental analyses "might reflect the interests of different groups."

The WTO office in Russia, set up under the aegis of the economics ministry, gave a cautious nod of approval to Kasyanov's order, but said any such report should be used only as a rough guide. "There needs to be a document prepared at the government level, an official document," said Alexei Portansky, director of the office. "Our delegation, headed by deputy minister [Maxim] Medvedkov, feels that such an analysis can only be approximate. If someone tries to give an exact estimate ... it could even be misleading," he added.

Kasyanov's order to take a deeper look at WTO membership issues comes at a time when Russia, vital to the American-led anti-terrorism campaign, is riding a wave of Western political support, raising the question: why now?

"On the face of it, it looks like a delaying tactic. But it goes counter to everything else being said [about joining the WTO]. So I'd be surprised if that's what it was," said Tom Adshead, a Troika Dialog economist. "The big picture list [of Russia's demands] is fairly clear, but they must want some details."

ICC Russia praised the call for deeper analysis. "Such an analysis must be carried out. The Russian saying 'measure seven times and cut once' is applicable here. There is no road back from joining the WTO," Monehan said.

"We need to know the rules that WTO member countries live be backwards and forwards," said ICC's Monehan. "When only 10 specialists know all the issues, the country is not ready." It sent the government a 132-page report this summer warning of the problems that would arise from a too-precipitous accession to the WTO.

"The government wants a closer look at the costs and benefits of joining the WTO. If people look at it carefully, the benefits will outweigh the costs. But the problem is that there are very few numbers," said Christof Roehl, the chief economist at the Moscow office of the World Bank, which has been involved in developing plans to join the WTO.

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