RUSSIA IN TOUGH WTO ACCESSION TALKS WITH THE EU

Russian Economy Minister German Gref met with EU Trade Commissioner Pascal Lamy in Brussels on 7 October to discuss the Russian WTO accession deal. The Russian accession process has been drawn out (see BRIDGES Weekly, 28 May 2003), and the latest discussions in Brussels ended in deadlock. The parties disagreed in particular about Russia's dual pricing system for energy. The EU is demanding that Russia apply the same prices domestically is on the international market, as the low domestic prices constitute a de facto subsidy. Commenting on the issue at a summit between Germany and Russia in the wake of the Brussels meeting, Russian President Vladimir Putin said he felt the European demands were too burdensome and that "the Russian economy is a derivative of the Soviet economy, which, unfortunately, developed as expenditure-oriented. We cannot instantly switch to world energy prices, otherwise we would cause the entire Russian economy to collapse". An EU spokesperson however stressed that "we are not asking the Russians to make unreasonable concessions or to force obligations on the Russians other than those in the WTO". The EU is also requesting that Russia allow foreign companies access to its gas pipelines, which Russia is very reluctant to do. Russia is the largest economy still outside the WTO, and the expected time of its accession keeps being pushed into the future. EU Trade Commissioner Lamy travelled to Moscow on 15 October to continue the talks.

"Russia-WTO talks: new round begins," RUSSIA JOURNAL, 7 October 2003; "Minister says negotiations on Russia's WTO membership in deadlock," XINHUANET, 9 October 2003; "WTO needs Russia more than Russia needs WTO," RUSSIA JOURNAL, 10 October 2003. "Russia's accession to WTO hampered by EU bureaucrats - Putin," INTERFAX, 9 October 2003.

SUB-COMMITTEE ON LDCS MOVES AHEAD WITH WORK PROGRAMME

On 2 October, the thirty-fourth session of the WTO Sub-Committee on Least Developed Countries (LDCs) met to discuss, inter alia, the continuation of work on market access for goods originating from LDCs, as well as LDC accession (i.e. joining the WTO). Proceeding on the basis of paragraph seven of the February 2002 work programme for the body (WT/COMTD/LDC/11, available at http://docsonline.wto.org), Members considered a report prepared by the Secretariat as part of its mandated annual review of market access for products originating from LDCs (WT/COMTD/LDC/W/31, available at link above). Of note, this latest document includes information on the utilisation of preferences and preference margins, as well as the export profile of LDCs and their major export markets. The report concludes with a table outlining the measures taken by Members to improve market access for LDCs.

On accession, the representatives of the first two LDCs to join the WTO since its inception, Cambodia and Nepal, noted in their statements the positive impact of the 10 December 2002 Decision on LDC Accession (WT/L/508, available at link above). The decision -- which is meant to address mounting concerns by LDCs of the pressure placed on them to accept obligations greater than those of current LDC Members -- lay out guidelines for accession relating to market access, WTO rules, technical assistance, and capacity building (see BRIDGES Monthly, Vol.7 No. 5). Finally, a background document on the current status of other LDCs in the accession process was circulated (JOB(03)/191, restricted).

The last LDC Sub-Committee meeting for 2003 will take place on 8 December 2003.

ICTSD reporting.