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Russia in the house

Russia?s entry into the World Trade Organisation as its 150th member heralds a new era in international cooperation.

india Updated: Nov 21, 2006 02:16 IST

Russia’s entry into the World Trade Organisation (WTO) as its 150th member heralds a new era in international cooperation. Russian Economy Minister German Gref and US trade representative Susan Schwab signed a bilateral protocol with Washington on the sidelines of the Asia-Pacific Economic Cooperation summit in Hanoi last weekend. This has paved the way for Russia’s accession to the world’s apex trade club. US President George W Bush and his Russian counterpart Vladimir Putin are expected to toast the accord in Moscow later this week, removing the last major obstacle in Russia’s 13-year-old bid to join the trade body.

Russia was always the odd one out, being the world’s last major economy sitting outside the Geneva-based trade body. Of course, there is some way to go before Moscow can flash its newly acquired WTO credentials, considering that much of neighbouring Moldova is still occupied by Russian troops, and Georgia faces a Russian transport blockade. These countries have yet to sign Russia’s WTO accession protocol, which must have the unanimous backing of all 149 members. The deal may also come in for a lot of flak from those who fear that Russia will be forced to raise fuel and energy prices on the domestic market to conform with costs on the world market. Indeed, if that happens, the price hikes could hit the Russian population very hard, with falling average money incomes possibly even triggering a social crisis. But Mr Putin, who steps down as President in March 2008 after completing his second term, seems confident of working out the right economics before that happens. And he could well be proven right, the way he apparently ensured that Moscow has more to thank Iran’s nuclear weapons programme than world trade for its WTO membership.

By tacitly agreeing to soften Moscow’s opposition to UN sanctions against Tehran, Mr Putin has successfully forced crucial US concessions on Russia’s WTO bid. This reflects the emerging Russian policy of restraining the world’s sole superpower through a Lilliputian strategy that prompts the US to act more through global institutions, and less as a lone ranger.

First Published: Nov 21, 2006 02:16 IST