Russia insists on WTO ambitions, diplomats say (1st Lead)

Nov 18, 2009, 11:04 GMT

   Stockholm - Russian leaders confirmed Wednesday that Moscow is determined to join the World Trade Organization (WTO) despite concerns that a planned customs union with Belarus and Kazakhstan could derail the process, officials at a summit in Stockholm said.

But it remained unclear how Moscow plans to reconcile its various trade plans, with the customs union set to take effect on January 1, European Union sources at the twice-yearly EU-Russia summit said.

'The Russians are still not 100 per cent clear how they want to get in, but Trade Minister Elvira Nabiullina said unconditionally that they want to do so ... without slowing WTO accession,' an EU source close to the talks said.

However, 'the how remained unclear,' the source said.

The EU is keen to see Russia join the WTO to create a more predictable legal basis for trade and business.

But Russia's announcement in June of its planned customs union threw trade negotiations with the WTO and the EU into confusion because it is now not clear if the three countries seek to join the WTO individually, or as a bloc.

   'The lack of clarity over Russia's intentions concerning its WTO membership implies a considerable uncertainty' both for the accession talks and for talks on a wide-ranging strategic treaty between Russia and the EU, Sweden's Foreign Minister Carl Bildt wrote on his blog just ahead of the summit.

   Sweden currently holds the EU's rotating presidency.

   EU officials say that Russia's plan to set up a customs union with its one-time Soviet vassals calls into question the foundations of WTO accession talks and EU-Russia trade negotiations by potentially changing the entire basis of the talks.

However, Nabiullina stressed that Russia had not yet decided whether to push ahead with WTO accession in combination with Belarus and Kazakhstan, or to carry on the process alone, diplomats said.

At the summit, Swedish Prime Minister Fredrik Reinfeldt and the EU's trade commissioner, Catherine Ashton, both stressed the EU's worry at the potential delay in Russia's WTO accession.

The fact that Russia has missed a self-imposed deadline to conclude its WTO accession talks by the end of this year is a cause for concern, Ashton said.

Russian President Dmitry Medvedev replied that the EU's comments 'gave food for thought' in the debate.

And both Medvedev and European Commission President Jose Manuel Barroso called for a 'modernization partnership' which would see EU companies investing in modernizing the Russian economy.

That partnership should cover technology transfer, harmonization of business legislation, WTO membership and visa-free travel, Medvedev said.

The summit was also due to address the question of climate change, with the EU keen to enlist Russian support for a deal to fight global warming at United Nations talks in Copenhagen in December.

   'Our countries are among the few in the world that have decreased their greenhouse gas emissions since 1990,' Reinfeldt pointed out.

   Medvedev said that 'our countries are among the most advanced in terms of commitments (to address climate change) and the desire to move ahead' in Copenhagen.

   Both leaders also stressed the need for Russia to crack down on corruption so that Western companies would feel comfortable investing there.

   'We need sustainable and predictable business conditions for Swedish businesses who want to work in Russia,' Reinfeldt said.

   But they also stressed that corruption is not a uniquely Russian phenomenon.

   'Corruption is a universal phenomenon ... These processes should be controlled and corruption should be suppressed,' Medvedev said.

   They were also set to discuss energy security and international hot spots such as Iran and Afghanistan.