EU Casts Cloud Over WTO Bid

moscow times
The European Union is threatening to block Russia's bid to join the World Trade Organization unless progress is made on resolving acrimonious disputes between Russia and some of its neighbors before a key summit near Samara next week.

While the EU still supports Russia's accession to the WTO, it will not do so "at any price," Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson, said Friday.

Russia's top WTO negotiator, Maxim Medvedkov, sought to downplay the disagreement, saying he would meet with his EU counterpart in about a week.

"We're in touch with the commission every day, really," Medvedkov said by telephone.

"It's business as usual," he added in English.

President Vladimir Putin is to host German Chancellor Angela Merkel, European Commission President Jose Manuel Barroso and other EU officials at the summit, which is to be held in the Volga River resort of Volzhsky Utyos near Samara on May 17 and 18.

EU members have agreed in an internal document to use the upcoming EU-Russia summit to "push for progress" in the negotiations, unless "a satisfactory compromise" is reached beforehand. "Bilateral problems or disregard for existing commitments will be major impediments," Power quoted the document as saying.

"The EU is ready to support early conclusion of Russia's WTO accession, but not at any price, and bilateral problems and disregard for the implementation of existing commitments will be major impediments," he quoted the document as saying.

The tougher EU line comes amid escalating tensions between Russia and Estonia over the relocation of a Soviet war memorial in Tallinn.

Amid calls for a trade boycott of Estonia, oil traders are reporting cuts in oil product exports to the country. (Story, Page 6.) Hundreds of students marched to the EU's office on Friday. (Story, Page 3.)

In other long-simmering disputes, Poland is vetoing the start of talks on a new long-term Russia-EU agreement over Moscow's yearlong ban on Polish meat, and Lithuania is threatening to add its veto over Russia's closure of an oil pipeline last year. European nations are already nervous about Moscow wielding its energy muscle through pipeline cutoffs to Ukraine and Belarus.

Friday's development comes as a new blow to Russia's WTO ambitions as the country prepares to enter the final, multilateral stage of entry talks.

One major stumbling block -- strong opposition within the U.S. Congress to the lifting of the Soviet-era Jackson-Vanik amendment -- is already threatening to jeopardize Russia's chances of joining the WTO this year, and presidential elections in Russia and the United States could well see the issue put on the backburner until a new U.S. president enters the White House in early 2009.

The Russian and EU comments came after European Voice, a Brussels-based weekly published by The Economist, reported Thursday that the EU strategy document was discussed by ambassadors from member states on April 25 and represented "a dramatic toughening of the Union's position toward Russia."

But Power said the European Voice report was "totally inaccurate, wrong," and Medvedkov called it "exaggerated."

While Medvedkov said he was not aware of the document, he said it might very well exist. "There's nothing bad about it," he said.

He sought to downplay the document's importance, saying it was "simply an internal document." He added in an e-mailed response later that it had "no status."

Power said the EU was "strongly committed to seeing" Russia in the WTO and that a "commercially viable basis" should be found.

Power and Medvedkov agreed that timber export duties and railway tariffs were the biggest sticking points to be resolved, with Medvedkov adding that he was confident a compromise would be reached.

Mandelson said last month that the "level of misunderstanding or even mistrust" between the EU and Russia was the lowest "since the end of the Cold War."

Medvedkov said he was not aware of any plans for talks about WTO accession during the EU-Russia summit.

While Medvedkov's boss, Economic Development and Trade Minister German Gref, is pushing hard for Russia to complete the WTO multilateral approval process by year's end, some other officials are less eager to strike a deal, if it means making concessions on issues such as the war memorial in Estonia.

Federation Council Speaker Sergei Mironov, a close ally of President Vladimir Putin's, told Vesti-24 state television that the country "is not desperate to enter WTO as soon as possible."