EU, Russia clinch deal on WTO

[October 22, 2011]  BRUSSELS (AP) -- The European Union and Moscow on Friday announced a major breakthrough in negotiations to let Russia become a member of the World Trade Organization by the end of the year.

The last bilateral issues with Russia were resolved over the car industry, the export of EU farm products and quotas for wood imports, EU Trade Commissioner Karel De Gucht said.

Russia is the last major economy that isn't a member of the WTO, the international free-trade body, and accession to it is crucial to a broader partnership agreement the European Union wants to establish with the country.

"We have struck a deal on the final outstanding bilateral issues, leaving the way open for Russia to join the WTO by the end of this year," De Gucht said.

In Moscow, Russian Foreign Minister Sergei Lavrov said in an interview with three major radio stations that "all the issues related to Russia's bid to join the WTO have been settled."

De Gucht insisted that Russia still needed to overcome a dispute with neighbor Georgia over trade transparency and offered to mediate. Georgia has the power to block Russia's membership, which has been in the works since 1993, and has been virtually doing so over border control issues in breakaway republics of South Ossetia and Abkhazia.

Lavrov said that "the issues that Georgia is raising have nothing to do with the WTO," adding that "if we are guided by the WTO's charter, then Georgia is not an obstacle" to Russia's accession."

De Gucht said Russia would now continue negotiating with the WTO at its Geneva headquarters to deal with remaining multilateral trade issues and held out hope Moscow could still join the trade organization in December.

Russian membership would make it easier for two-way trade and improve the overall business climate.

In the past, for example, Russia's high export duties on wood have hit Nordic paper makers hard, and royalties airlines have to pay when they fly over Siberia have been a major concern. Both issues have now been settled, De Gucht said.

The EU is Russia's largest trading partner, accounting for 46 percent of its foreign trade. The 27-country bloc is also the biggest investor in the Russian economy.

[Associated Press; By RAF CASERT]

Nataliya Vasilyeva contributed to this story from Moscow.

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