Updated September 23, 2008

On September, 22, the senior negotiator with the World Trade Organization (WTO), the director for trade talks department of Russia’s Ministry of Economic Development and Trade (MEDT) Maxim Medvedkov and the head of the information bureau on Russia’s entry to the WTO Aleksey Portansky held the press conference devoted to the talks with the WTO. They have underlined that Russia has never lost contacts with the WTO, even after the August threats made by the US administration. Moreover, Mr. Medvedkov reported that his informal meetings with the members of the Working Group that were held in Geneva previous week on Russia’s entry to the WTO had a great success. According to Mr. Medvedkov, the official meeting of the WTO Working Group takes place early in November. The numerous consultations with the experts will be held before. Russia’s Agriculture Minister Aleksey Gordeev is expected to come to Geneva. Though Mr. Medvedkov refused to name the final date of Russia’s entry to the WTO, according to his analysis, this may happen at the beginning of the next year.

However, three barriers should be overcome. It goes about Russia’s trade regulations and about such barriers as the level of the state backing of agriculture, the size of export duties on lumber, the regulations of the state-owned trade enterprises (Gazprom or Aeroflot). Mr. Medvedkov didn’t expose the details of the reached agreements.

Aleksey Gordeev insists on $9 billion per annum as the national backing of the agriculture. The analogical amount is allocated already to the agricultural state program to 2011. The countries of the so-called Kern Group (it lists 20 countries, including Australia, Canada, New Zealand, and the range of Latin-American and Asian countries), where there is either no any subsidies to the agriculture or they are quite low, demand to cut Mr. Gordeev’s requirement to $4 billion (it is the sum that the federal budget allocated in 2003-2006). However, the compromise is being reached already. The Kern Group is ready to agree on Mr. Gordeev’s promise, firstly, not to increase the amount of the state backing, and, secondly, to allocate no more than $4 billion per year to produce Russia’s own products. The rest $5 billion will be directed to the development of the agriculture infrastructure alone.

As for the lumber duties, Mr. Medvedkov said that if Russia entered the WTO, it wouldn’t raise the export duties on it. According to some data, the range of large Finnish lumber companies is ready to invest about $1 billion in Karelia’s lumber mills next year. Thus, the duties didn’t frighten them away. Finally, Russia’s partners are not afraid of Gazprom or Aeroflot’s monopolistic position anymore.

As a result, the Working Group may finish the preparation of the report on the trade procedure in Russia by the year-end. If such fact is taken to account that the partners of Georgia, opposing insistently Russia’s entry to the WTO, have decided not to pay attention to its position, and Ukraine is not intended to start bilateral talks with Russia (otherwise, Moscow will impose restrictive duties on the Ukrainian goods), all talks, both bilateral and multilateral, may be finalized by the year-end. So, Russia’s official entry to the WTO can take place in March, 2009.