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Interview with Pascal Lamy

Interview with Pascal Lamy
Pascal Lamy, the Director General of the World Trade Organization, spoke to RT about Russia’s chances of finally joining the WTO and the benefits the move would give the country.

Russia Today: Yesterday German Gref, Russia’s Minister of Economic Development and Trade, said the projected date for Russia’s accession to the World Trade Organization had shifted from the summer to the autumn. How realistic actually is this new deadline?

Pascal Lamy: Well, we in the WTO are used to these very complex negotiations. We usually say ‘substance – before timing’. Russia wants to join the WTO, the WTO members want Russia to join. So, the political will is there, the sort of sense of direction that it should happen is there. When exactly it will happen, depends on the substance of the negotiations. And we know that Russian regulations still have a bit to do in order to match WTO standards. So, it takes a bit of time. But it is better to have it right and on the right terms, rather than rushing and later discovering that there are bugs in the system. So it is serious, but I am very hopeful that it will happen.

RT: You say the political will is there. But Russia has been trying to join the WTO for some years now and it always seems to be just one step away from the actual accession. Currently the issue is with Georgia, which is saying it has got a problem with Russia’s cross-border control post. Russia says that issue has nothing to do with the WTO. So, how real do you think these problems are? Or are they simply a game of political wills?

P.L.: No. There is obviously a feeling on both sides – on the Russian side it is that the negotiation is set on with things which are not trade-related. And on the other side, the notion is that the Russian side is sometimes a bit tough on trade matters, and it is better to get this right before they come in. So, as a sort of neutral facilitator, I think both of these points of view are understandable. The important thing is that we address the technicality of the negotiation right. This is what has to happen now. What I get from the Russian side, what I get from the existing members, is that a political will is there – I think it is good for both sides.

RT: Two days ago Ukraine’s President Viktor Yushchenko said that his country hopes to join the WTO by November 2007. It is common knowledge that Ukraine has a problem with intellectual property rights, such as pirating CDs and DVDs.  That is also a charge that has been leveled against Russia in terms of problems with its accession to the WTO. But China is already a member of the WTO, and it is also well-known that it has problems with intellectual property rights. So, why is that charge being leveled against Russia?

P.L.: I don’t think it’s a different pre-occupation. The pre-occupation is the same and it has to do with whether the necessary legislation is there, to protect intellectual property, or not. And it's the problem we had with the Chinese, Ukrainians and which we have with Russians. So number one is whether the right regulation is there. Number two is whether it is enforced correctly.  Those are the grounds on which the diagnosis is made. China had to make commitments when it joined the WTO. And, probably, you are aware that now the members are making sure that the commitments that they have made in order to protect intellectual property are kept. Same with Ukraine and same with Russia, hopefully, in the future.

RT: Do you think that when Russia does finally join the WTO, it will have to undergo a massive re-structuring of its economic and legislative infrastructures in order to work productively within the framework of the WTO?

P.L.: No. Frankly, I don’t think that’s the problem. This accession process has been going on for some time, the process of economic reforms in Russia has been going on for some time – so, it’s not a big bang. It’s an important step in a process of reforms, which has taken time, which will not finish with Russia joining the WTO, which will be continued later on. It’s a stage in an ongoing process and nothing like a big bang. From my point of view, the Russian economy today is much more ready to join the WTO than it was, let’s say, five or six years ago.

RT: Some local producers in Russia have voiced concern about the possibility of joining the WTO. They think that once Russia joins the group, it is only big and middle-sized business that will be able to flourish. Do you think they have anything to fear from Russia joining the organization?

P.L.: Well, I understand this concern. After all, joining the WTO is about opening your economy. If my economy is more open, am I going to suffer or am I going to win? And this is a legitimate concern. The answer to that is: look at what happens with the others, who have joined the organization within, let’s say, the last ten years – China, Vietnam. Ask them, whether it worked or not. And the answer is: yes, it worked. Of course, some will feel the pain of a bit more competition, but many others will be able to exceed markets where they have a comparative advantage. So, overall, I think it’s a win-win game. Of course, it may not be a win for everybody, every time in every sector. But that is the law of economic life.

RT: Why is it a win-win game? What will Russia gain when it joins the WTO and, vice versa, what will the WTO gain once Russia joins it?

P.L.: It’s a very good question and it’s the game of trade. If you do something better than I do, and if I do something better than you do, then you have interest in buying me and I have interest in buying you. That’s what the win-win game is. Efficient producers reduce prices, and are more productive. And trade hates making this happen. And if you look at the history of economic life, and the recent history – opening trade has always been good, whilst closing trade has always been bad. So, overall it is true. I think if Russia joins the WTO, it will sign a sort of insurance policy against protectionism from other countries. And the WTO will at last see the remaining major economy which is not yet a member of the WTO, in the club. And I think that will be good.

RT: And how close do you think Russia is to achieving that goal in terms of being recognised as being amongst the world economies?  And how important do you think this St. Petersburg Economic Forum is for strengthening the feeling that Russia is indeed a part of the global economy?

P.L.: I think it’s important. And I think joining the WTO and events like this forum are pointing in the same direction – it’s about increasing the confidence of foreign investors, business people, entrepreneurs, that Russia is a land of opportunities. If you invest there, if you start business there, it will work. And I think this sort of creating confidence and trust, that it is now a system which is predictable, transparent, and stable. That’s what most important both for business and joining the WTO. And the sort of discussions like we are having here are also important.