Georgia to veto Russia’s WTO bid?

By Isabel Gorst

Russia and Georgia have hardly been on speaking terms since they fought a short war in August 2008 that cost Georgia a fifth of its territory.

But the two sides are meeting on neutral ground in Switzerland this week to try to reach an agreement on Russia’s entrance to the World Trade Organization which Georgia, as a member, has the right to block.

After more than 17 years of talks, Russia has cleared most of the hurdles to gain entry to the WTO and is expected to join the 156 nation body next year. WTO membership would pave the way for a surge in foreign investment to help modernize the economy and could, according to the World Bank, add 3.3 per cent to Russian GDP in the short term and 11 per cent in the long term.

Talks between Russia and Georgia about the WTO broke down in early 2008 as tensions escalated in the run up to the war over Georgia’s separatist regions of Abkhazia and South Ossetia. After dealing Georgia a crushing defeat, the Kremlin recognized Abkhazia and South Ossetia as independent states and stationed thousands of troops in the regions in a move that drew international condemnation.

Now for the first time since the war Georgia has some leverage over Russia.

However, Russia has been throwing its weight around threatening to override Georgian objections to its WTO bid.  “I do  not want to go into details about what kind of specific ways exist for Russia to join the WTO without Georgia’s consent,” Sergey Lavrov, the Russian foreign minister, said this week. “I can say one thing: these possibilities are based on the principles under which the WTO functions.”

Grigol Vashadze, Georgia’s foreign minister, dismissed Lavrov’s statement as “blackmail and bluff.”

“We want to work together with Russia and the Swiss mediators to find a way out of this legal absurdity which was created by the Russian Federation’s decision to recognize Abkhazia and South Ossetia ,” he said.

Even if it for once has some power over Russia, the WTO talks are highly sensitive for Georgia, touching the painful question of its lost territorial integrity. Borders in Abkhazia and South Ossetia that were once channels for most of Georgia’s foreign trade are now out of bounds and patrolled by Russian soldiers.

The US is standing aside from the WTO talks, describing them as a bilateral affair between Russia and Georgia. While remaining a supporter of Georgia’s right to territorial integrity, the US is eagerly awaiting new trading opportunities when Russia joins the WTO.

Western diplomats say the dispute over Georgia’s territorial integrity has reached a stalemate that although politically awkward is better than war. Georgia may have lost control of its territories for now, but is probably safe from further Russian military aggression until the Sochi Winter Olympics in 2014 are out of the way.

Vashadze said Georgia would not raise political or military issues at the WTO talks where the focus would be on trading rules enshrined in the organization’s charter. Nevertheless, Georgia should be allowed to control its borders and customs terminals, he said.

While it is unlikely that Russia would welcome uniformed Georgian customs officials standing alongside its troops on the borders of Abkhazia and South Ossetia, Georgia might have something to gain if Russia joins the WTO.

A Russian ban on Georgian wine and mineral water imports imposed after a spy spat in 2006 is unlikely to sit comfortably with WTO rules on free trade.
Financial Times