Russia has cleared the last barrier on its 18-year-long road to join the World Trade Organisation after reaching a bilateral trade deal with Georgia.
Russia and Georgia are expected to sign a formal agreement next week paving the way to Russia's accession to the WTO at the group's ministerial meeting in December.
Russia, with a GDP of $1.9-trillion, is by far the largest economy outside the WTO and its entry would mark the biggest step in world trade liberalisation since China joined in 10 years ago. The World Bank has estimated WTO membership could add 3 per cent to Russia's economy in the medium term and up to 11 per cent in the long term. However, many economists warn that Russian agriculture and manufacturing industries may not be able to compete with cheaper imports. Prime Minister Vladimir Putin said last month the costs and benefits of WTO membership were “50-50, but over all there are probably more pluses than minuses”.
The breakthrough announced late on Wednesday came after Georgia, which lost its breakaway territories of Abkhazia and South Ossetia in a five-day war with Russia in 2008, dropped its demand that the Russian border with two now independent regions be referred to the “Georgian-Russian border”. Under a compromise arrangement Russia for its part agreed to have international monitors deployed on trade crossings of its border with Abkhazia and South Ossetia.
Russia's entry into the WTO will open the way for India and Russia to sign a Comprehensive Economic Cooperation Agreement (CECA), a free trade pact the two countries have long finalised but could not seal because Russia was not a WTO member.
The CECA pact is expected to give a boost to bilateral trade between India and Russia by providing a greater market access for the partners. Indo-Russian trade touched $8.5 billion last year, growing three-fold since 2005, but falling short of the $10-billion target the two countries had set for 2010. New Delhi and Moscow now hope to increase bilateral trade to $20 billion by the year 2015.
