Ukraine and US blackmail Russia on WTO membership

Ukraine and US set up its terms of Russia entering WTO
Just when it seemed that Russia’s way to the World Trade Organization was finally clear, Ukraine and the US Congress have decided to put a spoke in Moscow's wheel.

After Russia and Georgia reached a compromise at the WTO negotiations, Kiev threatened to use its veto right unless it gets cheaper gas and free access for Ukrainian goods to the Russian market. While the US Congress demanded that Russia be obliged to join the Information Technology Agreement (ITA) before accessing the WTO.

According to Andrey Klyuev, Ukrainian minister for economic development and trade, his country currently pays $414 per thousand cubic meters of gas, while other European countries get Russian gas at a price between $320 – $360.

“It makes sense for us to negotiate with Russia to reduce the gas price,” Klyuev said.

He admitted that if the gas contracts are not revised soon, starting from January 1, 2012 gas prices for Ukraine will rise to $456 per 1,000 cubic meters.

Russian experts, however, say Ukraine’s blackmail could easily be stopped by the European Union, where Ukraine seeks to get associated membership next month. Alexandre Chyorny, economist from the Center for Sociological Research, says a move by Ukraine to break the agreement it signed on Russia’s WTO accession would be unprecedented.

"Besides, Russia's membership in the WTO is advantageous for Ukraine itself, because then we will be in a single system of trade operations rules and will be able to settle all trade disputes in a civilized way," added Viktor Chumak, head of Ukraine's Public Policy Institute.

The other obstacle to Russia’s WTO membership came from the US, where a group of Congress members claimed that Moscow is ignoring its obligations. In 2006, Moscow agreed to join the Information Technology Agreement (ITA) within the framework of the WTO accession process. The ITA provides for zero duties on all high-technology products. The US lawmakers want a written commitment, while so far there’s just a verbal agreement.

Sergei Pukhov, expert at Moscow’s Development Centre, said that if the American authorities follow Congress's lead, they will discredit themselves.

"In fact, it would mean that the political authority there has no decisive role," he said.

But Alexei Mukhin, Director General of the Political Information Centre, was less optimistic, believing that the Americans are playing their old game: pretend to agree, and then backtrack.

"It will hardly be surprising if by the end of the year, we do not join the WTO after all,” Mukhin said.