Russia's efforts to become a member of the WTO have been held up for months over differences with the US on farm trade and intellectual property rights. They now face an additional roadblock: Moscow's deteriorating relations with Georgia. Thirteen years after starting accession negotiations, the country remains the world's only major economy not part of the WTO.

All applicants for membership in the global trade body must negotiate bilateral accords with any WTO Member that wants one. Russia has become increasingly impatient with Washington's demands, to the point of threatening to pull out of the talks and put an end to its compliance with core WTO obligations (see BRIDGES Weekly, 13 September 2006). Russian officials are in Washington this week, in yet another attempt to resolve their differences.

Moscow and Washington had hoped to strike a deal in July, on the eve of the St. Petersburg Group of Eight (G8) summit, but talks broke down over issues including copyrights and access to banking and insurance markets. More recent sticking points include Russia's refusal to relax import limitations on US beef and pork for health and safety reasons - measures that Washington argues are unjustifiable on scientific grounds. Lifting bans on beef imports has been a key focus of US trade diplomacy with other countries, such as Colombia and Korea, which had instituted restrictions because of mad cow disease.

US officials remain concerned about counterfeiting and other intellectual property rights abuse, and have suggested that Russia would have to shut down allofmp3.com, a website which they accuse of selling music illegally, before Washington would consent to an agreement.

The Associated Press reports that part of Washington's reasons for taking a hard line with Russia is a perception that it did not secure adequate liberalisation commitments from China during the last stages of the latter's bilateral accession talks - leading to a series of subsequent disagreements over services and farm trade.

Nevertheless, Russian news agencies report that Deputy Prime Minister Alexander Zhukov expressed confidence on 24 October that the two countries would be able to strike a deal on meat imports. He did not rule out the possibility that the negotiations could be completed by the end of the month.

Georgia poses new obstacle in Russia's path

A newer hurdle to Russia's bid for WTO membership emerged on 12 October, when Georgia - a WTO Member since 2000 - asked the chair of the working party dealing with Russian accession to indefinitely postpone informal and formal meetings. Georgia says that it will block Russia's accession until Moscow ends the wide-ranging economic blockade it put in place after an espionage row in September, when four Russian officers were arrested in Tbilisi on charges of spying and deported home.

Amidst furious recriminations between Moscow and Tbilisi, Russia has blocked most trade (with natural gas a notable exception), transport, postal movement, and financial flows between the two countries. Remittances from Georgians working in Russia have been halted, and hundreds of Georgian workers have been deemed illegal and deported.

WTO decisions require consensus among all Members - which means Georgia could veto Russia's accession simply by withholding consent. However, sources suggest that Georgia would be powerless to prevent other delegations from meeting informally.

The sanctions currently in place mark a low point in two years of increasingly rancorous trade relations. Although Georgia and Russia concluded their bilateral accession protocol in May 2004, Georgia in July of this year notified the WTO Secretariat that it was restarting bilateral negotiations with Moscow.

Tbilisi argued that reopening the talks was necessitated by Russia's late-2005 import ban on Georgian plant products on the basis of sanitary and phytosanitary concerns, which was extended to wine, spirits, and mineral water in early 2006. The Georgian government argues that the bans are not scientifically justified. According to the New York Times, Russia has not made its test results public, and US authorities have deemed Georgian wines and spirits safe. Georgia also charges Russia with arbitrarily closing to trade the only legal border crossing between the two countries.

Georgian officials describe their signing of the original accession deal as a "gesture of goodwill" towards Russia, in light of their misgivings at the time. They say that the accession agreement was accompanied by an "additional protocol" in which Moscow agreed to address issues such as the "illegal checkpoints" it operates in Georgia's Russian-backed breakaway border regions of South Ossetia and Abkhazia, which are not under the control of Georgian state forces. Georgia argues that these have served as a conduit for the influx of illegal trade and contraband goods, and wants Russia to either close them or organise joint Russian-Georgian control. Moscow also promised to enforce intellectual rights protections on Georgian wines and spirits.

"We were forced to move in this direction because no other mechanisms were found to force Russia to respond to our concerns," one Georgian trade diplomat told Bridges. If Russia became a WTO Member, formal dispute settlement would offer Tbilisi little leverage in getting Moscow to comply with its obligations. "What counter-measures do I have? Retaliatory tariffs?" Many smaller WTO Members complain that retaliatory tariffs would be mere pinpricks to larger economies (and self-damaging to boot).

"Now is the only moment that we can get Russia to hear us, and to make some movement to address our concerns," concluded the official, stressing that Georgia was "ready to move constructively" to solve the problems with its largest trading partner.

Accession working party Chair Stefan Johannesson (Iceland) has urged Georgia and Russia to cooperate in order to resolve the situation.

Geopolitics playing role in accession

Broader geopolitical concerns are also playing a role in Russia's accession. Russian daily Kommersant reported on 23 October that the Kremlin has indicated that if the US softens its demands with regard to WTO accession, Moscow will take steps to help Washington ratchet up international pressure on North Korea and Iran.

Even a deal with the US would leave the working party much work to do to finalise Russia's package of accession commitments. China signed its last bilateral accession deal in May 2000, but did not join the WTO until December 2001.

"A Pilgrimage to the Cradle of Wine," NEW YORK TIMES, 8 October 2006; "Russia, U.S. may end WTO talks by end of Oct.-deputy PM," RIA NOVOSTI, 24 October 2006; "Russia Approaches the WTO Via Iran," KOMMERSANT, 23 October 2006; "US stance on Russia's WTO entry reflects Chinese lesson," ASSOCIATED PRESS, 19 October 2006; "Georgia Seeks to Block WTO Meetings Of Working Party on Russia's Accession," WTO REPORTER, 13 October 2006; "Much work to do" before Russia joins WTO," THE MESSENGER (Georgia), 16 October 2006; "Georgia lays new obstacle in Russia's WTO path," REUTERS, 12 October 2006.