5:43 AM Jul 17, 1995

WTO WORKING PARTY ON RUSSIA BEGINS WORK

Geneva 17 July (Chakravarthi Raghavan) -- The WTO's working party on the Russian application for accession to the WTO is due to hold its first meeting Monday.

A large Russian delegation, led by the Russian Deputy Prime Minister and Minister for Foreign Economic Relations, Mr. Oleg Davidov, and including the Minister of Economy, Chairman of the Customs Committee, are in town for the meeting of the working party which is chaired by the Swiss Representative to the WTO, Amb. William Rossier.

On the basis of a Russian document outlining their trade policy, the WTO General Council named the working party on the accession request.

On the basis of the Russian document, the WTO members (principally, the US, Canada, EU and Japan) reportedly submitted over 400 questions to which the Russians have responded in a 200-page new document.

The working party meeting this week is expected to involve further questions to be addressed to them, and any replies that could be provided or to be taken on board for answers later.

The working party is the first, and the accession process could be a long one -- though the Russian political leadership appears to be of the view that the entire process could be completed in a year's time and Russia could become a member.

Russian officials privately are more realistic.

Apart from China, Russia will be a major country, with an economy in transition from central planning to a market-economy, that is seeking WTO membership.

Unlike China, but more like the East Europeans, the Russians too have attempted the 'big bang' approach that was favoured and pushed on them by the IMF and the World Bank, the EU, OECD etc.

This though has had some predictable serious domestic consequences, both in terms of the economy and politics.

The current state of health of the Russian President Yeltsin and doubts about whether he would run for re-election or someone else has to be chosen also add some new dynamics, and the possibility of some caution from the Russian technicians and bureaucracy.

On the other hand, some of the principals (particularly the US and the EU) have been known in bilateral negotiations to have gone over the head of the Russian official negotiators to talk to the Russian politicians to ensure a softening of the Russian official's positions.

In terms of the concessions that the west is expecting or hoping to get from the Russians, apart from the normal questions relating to tariff and non-tariff barriers and other trade policy questions, are those related to investment, government procurement and civil aviation.

On all these, in terms of the WTO accession protocol, it would be difficult for the west to seek to get more from Russia than what the WTO accord provides - for example in regard to investment questions and the Trade-related Investment Measures Agreement.

However, they might try to get these in parallel (bilateral or other) Russian commitments so that the Russian "market" would be opened up for their own transnational corporations.

The working party meeting Monday afternoon will be preceded by a call on the WTO Director-General Renato Ruggiero by Oleg Davidov.