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Russia’s WTO bid boosted after Swiss-led talks

President Dmitri Medvedev, pictured at an award ceremony after the 2008 war, says Russia will not reverse its recognition of two breakaway Georgian provinces Keystone

Russia and Georgia have reached an agreement in Swiss-led talks, clearing the final hurdle for Moscow to enter the World Trade Organization (WTO).

This content was published on November 3, 2011 - 09:34
swissinfo.ch and agencies

Both sides announced they hoped to conclude a critical trade deal with Moscow by November 10 – the date of a WTO working group meeting. Russia has been trying to enter the WTO for 18 years.

Georgia, which like all WTO members can block another country's accession, has been withholding support for Russian entry unless a dispute over customs controls was resolved.

The two countries fought a brief war in 2008, in which South Ossetia and Abkhazia broke away from Georgia with Russian support. They have not resumed diplomatic relations since then.

Switzerland has been acting as a mediator between the two countries. In the latest diplomatic push for a compromise, Swiss Foreign Minister Micheline Calmy-Rey met Russian President Dmitri Medvedev in Moscow on Sunday, and Georgia’s President Mikhaïl Saakashvili separately the following day.

Calmy-Rey then briefed WTO Director-General Pascal Lamy and diplomats about the outcome of the meetings on Tuesday. She told media the mood had been largely positive, while Lamy said he was “reasonably optimistic” about the diplomatic moves.

                                  

Moscow's top WTO negotiator Maxim Medvedkov said late on Wednesday that Russia had agreed to the compromise trade deal proposed by Switzerland. 

The agreement foresees that a neutral company will conduct customs  checks on all trade between the two nations.

"It will cover our trade which goes from Russia to Georgia  directly," said Medvedkov. "It will also cover trade which goes from Russia to Georgia and vice versa through Abkhazia and South Ossetia. And also trade which leaves Russian customs territory but is not coming to Georgian customs territory."

Georgian Foreign Minister Sergi Kapanadze said a delegation was due to arrive in Switzerland on Thursday and an agreement was expected “within days”.

                               

Agreement on terms before the working group meeting would enable WTO trade ministers to approve Russia's accession at a conference in Geneva on December 15.

Eric Hoesli, geopolitical expert on the Caucasus told swissinfo.ch the Swiss mediation had been “innovative and effective”, and “showed the imagination and ability of Switzerland to mediate in international conflicts”. He speculated that it would raise Switzerland’s status as an international negotiator. 

“Underlying problem”

“From the Western point of view, this agreement is very important because Russia is the only economic power outside the WTO. Its entry will have a positive effect on world trade given the size of its economy,” said Hoesli.

“On the other hand it is another way of advancing the policy of rapprochement between Russia and the West, specifically with respect to countries like the United States, with whose government relations have been strained since President Barack Obama came to power.”

Hoesli said Russia’s entry into the WTO would also “bring great benefits to Georgia”. It stood to gain from a trade deal, having suffered from its main market – Russia – boycotting products such as mineral water and wine.  

Russia’s WTO entry would need the approval of its parliament and would be a victory for Prime Minister Vladimir Putin, who has long sought Russia's entry. He is widely expected to return to the presidency next March.

Entry to the WTO would make Russia's $1.9 trillion economy, the biggest outside the 153-member club, more attractive to investors and cement Russia's integration into the world economy two decades after the fall of the Soviet Union. 

                                   

This would send a signal to companies and investors that Russia is starting to move closer to a rule-based system of doing business.  

Both the European Union and the United States have voiced hope that Moscow could join the WTO by the year's end.

Marcelo Kohen, professor of international law at the Geneva Graduate Institute, speaking to swissinfo.ch before the announcement, said an accord would be more a gesture “to reduce stress” than a new beginning in relations between the two neighbours.

“The relationship would not change that significantly, because the conflict is complex and enduring,” he said.

“Specific issues can be resolved and steps taken, such as exchanging information on border monitoring. But the underlying problem, the situation of Abkhazia and South Ossetia, will remain.”

Good Offices

Providing "good offices" remains a Swiss foreign policy goal. The Swiss currently represent the interests of the US, Russia, Cuba, Iran and Georgia in different cases. Other areas are safeguarding Swiss economic interests, the worldwide promotion of human rights and good governance, and protection of the environment and natural resources.

The most visible efforts are Swiss development aid projects, which are generally focused on the poorest nations, and are based on self-help.

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Probe into 2008 confliclt

A European Union-commissioned report into the 2008 conflict between Georgia and Russia was published in 2009.

The 1,000-page report, which sought to clarify what caused the war, said it followed "long periods of increasing tensions, provocations and incidents" between the two countries.

The probe was headed by Swiss diplomat Heidi Tagliavini. It charged that much of Russia's action "went far beyond" the limits of defence.

It also found that allegations of genocide committed by the Georgian side were “neither founded in law nor substantiated by factual evidence".

It said: "South Ossetia did not have a right to secede from Georgia, and the same holds true for Abkhazia for much of the same reasons. Recognition of breakaway entities such as Abkhazia and South Ossetia by a third country is consequently contrary to international law."

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The Ossetians

The Ossetians are descended from the nomadic Scythian people.

They live on either side of the Caucasus mountain range; Ossetia is divided into two parts: the North is part of Russia while the South is part of Georgia.

South Ossetia has had de facto autonomy since the 1990s.

When Georgia became independent in 1991, its hardline nationalist president tried to clamp down on the autonomy of the Ossetian, Abkhaz and Ajari minorities.

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