One Step Closer to WTO

November 19, 2006

Russia has finally signed a two-way trade agreement with the US, which it needs to join the WTO. Earlier in the day, Russia inked a similar agreement with Sri Lanka, in exchange for lowering tariffs on tea from the country.

It now has to settle its disagreements with Georgia and Moldova, who have protested Russia’s trade-as-foreign-policy approach, as well as sign such deals with all members of the WTO. Its biggest obstacle, however, has been the US.

It remains to be seen, if Russia’s foreign policy will see a shift, because of the key deal. On the one hand, Russia likely made concessions to the US to receive the deal; what those were is unclear, Iran being a possibility. On the other hand, Russia will have to gain the trust of the other WTO members and thus must have an economic policy that is unquestionable and be ready to make concessions, like it did with Sri Lanka today. Europe, for example, may pressure Russia to alter its energy policy to let European countries into Russia, something European ministers failed to convince Putin in in October.