July 20, 2009
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Home / News / Today's Headlines / Shuvalov: High Oil Prices Harm Russia's WTO Bid

17.07.2009

Shuvalov: High Oil Prices Harm Russia's WTO Bid

Russia could join the World Trade Organization by mid-2010 if the U.S. delivers the backing it has publicly promised to Moscow's long-delayed bid, First Deputy Prime Minister Igor Shuvalov said.

Mr. Shuvalov, in an interview, also said high energy prices were a danger to the long-term development of Russia's economy, which must be weaned from its dependence on oil and gas. High energy prices inflate demand for the ruble, and therefore its value, which render Russian export of finished or raw goods much more expensive to foreign consumers.

President Obama on his recent visit promised American efforts to aid the Russia economy, such as repeal of the Cold War-era Jackson-Vanik amendment that bars America from establishing permanent normal trade relations with Russia, and increased cooperation in energy sector development.

Russia, which has been negotiating for 16 years to join the WTO, is the biggest economy outside the 153-nation group. But Russian Prime Minister Vladimir Putin shocked U.S. and European officials shortly afterward by saying that rather than seeking entry by itself, Moscow would seek to join as part of a customs union with Kazakhstan and Belarus. Last week, however, Russian President Dmitry Medvedev called the customs-union plan "problematic," saying Moscow will likely continue with its nearly complete talks to join independently.

Scuttling the WTO entry bloc underscores the severity of the economic crisis and the need for Russia to enter the trade regime as quickly as possible. Kazakhstan, with its heavily mining and resourced-based economy, and Belarus, with its focus on agricultural products, would cause complications for  combined accession.

Copyright 2009 The Wall Street Journal. All Rights Reserved.

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