BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Thursday, 24 October, 2002, 10:44 GMT 11:44 UK
Russia strives to raise trade status
Demonstration outside the Duma against the sale of land, 2001
Many fear foreign influence on Russia

First China, now Russia.

After Communist China fought and won a 16-year battle to join the world trading system, the former Communist state of Russia is clamouring for admission to the World Trade Organisation.

President Vladimir Putin has made it his priority to cement economic ties with the West, and is prepared to make strategic concessions on issues such as Iraq to achieve his aim.


If we can make good progress, Russia's entry into the WTO cannot be far away

EU Trade Commissioner Pascal Lamy
And he believes he has gained the support of the US for his goal.

Now Russian officials, including Prime Minister Mikhail Kasyanov and Trade Minister German Gref, will put their case to EU Trade Minister Pascal Lamy, who arrived in Moscow on Thursday.

Russia will face formidable obstacles to its bid to join the WTO by the end of next year, and the EU is the key to Russia's hopes.

"We are keen to make good progress in the WTO accession talks, but this means hard work ahead in one or two key areas, such as services," Mr Lamy said.

"But if we can make good progress, Russia's entry into the WTO cannot be far away."

Largest trading partner

The EU is Russia's largest trading partner, and also holds a veto over Russia's WTO membership application.

Under WTO rules, countries who wish to join must convince all members of their genuine commitment to a market economy.

Any WTO member has the right to ask for concessions on market access as a pre-condition for membership.

The EU is expected to press Russia to open its markets for a wide variety of services, including banking and insurance.

And it will want assurances that the Russian authorities will deal effectively with issues of corruption and corporate governance.

Russia has become notorious for a "wild east" style of corporate behaviour, which has enraged many Western investors who have lost money there.

But Russia may be reluctant to open its banking sector after the 1998 crisis which led to the sector's virtual bankruptcy, following the devaluation of the rouble.

Internal opposition

Russia is also faces internal opposition to fast-track WTO membership.

Some Russian executives fear that opening the country to full competition would cripple firms unable to compete with more efficient foreign multinationals - as happened in much of Eastern Europe.

However, the EU has taken a conciliatory attitude towards Russian bosses, telling them that change would be implemented gradually.

"The basic message to Russian industrialists will be that the WTO is good for you," said. Arancha Gonzalez, EU spokeswomen on trade.

"It ensures a level playing field and you should not be afraid of the WTO.

"Reforms take place in a gradual manner and not from one day to the next."

Place in the world

Mr Putin so far has shown himself unafraid to take on vested interests in Russia, either in the military or in business, to pursue his strategic objectives.

He believes that following Russia's admission to full membership of the G8 group of rich nations, WTO membership would be the most potent symbol of Russia's restored place in the world.

But it is not yet clear whether he is prepared to pay the economic cost that such a move might require - or whether he can convince either the EU or the US that Russia has reformed its business practices.

See also:

27 Jun 02 | Business
26 Jun 02 | Europe
25 Jun 02 | Business
07 Jun 02 | Business
11 Dec 01 | Business
08 Mar 02 | Country profiles
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes