Swiss mediators hope Russia can join WTO this year

By Alexei Anishchuk

Russia, the world's biggest energy producer, has annual GDP of about $1.9 trillion, 2.8 percent of the world economy, and joining the WTO would open up more of its economy and increase the flow of investment into the country, two decades after the collapse of communist rule.

"I hope that our discussion today will be fruitful and the results will allow Russia to enter the WTO by the end of the year, in December," Swiss Foreign Minister Micheline Calmy-Rey told Russian President Dmitry Medvedev.

Medvedev responded by saying Russia "also very much wants that," and heaped praise on Swiss mediation efforts at the meeting, hastily arranged at Medvedev's residence near Moscow.

Georgia, the small southern neighbor that briefly went to war with Russia in 2008, is the only one of the 153 WTO members still blocking Russian accession. Last week it offered Moscow what it said was its final compromise deal, covering trade with its two small Moscow-backed breakaway regions.

The Swiss delegation were on their way to the Georgian capital Tbilisi to discuss the Russian entry bid, and Kremlin aide Arkady Dvorkovich told reporters they expected to settle "all pending issues within the next few hours."

Joining the 153-member trade bloc is an ambition of Prime Minister Vladimir Putin, who is seeking a return to the Russian presidency in the March 2012 election, and Russian accession would be the biggest advance in world trade liberalization since China joined a decade ago.

Russian officials are banking on WTO entry to spur economic growth by increasing competition, and the World Bank estimates membership could increase the size of Russia's economy by 11 percent in the long term.

Georgia, like all WTO members, has an effective veto on Russia's membership, which it has threatened to use unless a dispute with Russia over customs controls is resolved.

Russia humiliated ex-Soviet Georgia in a brief 2008 war over the breakaway Georgian region of South Ossetia. They have not restored diplomatic relations.

Russia said on Thursday it needed several days to review the proposal on border trade with Georgia made by Swiss mediators.


The United States and the European Union have urged all sides to try to settle membership terms by the end of this year, compounding Russian officials' fears that a failed bid this time

could mean Russian entry is delayed by years.

Both Russia and the United States are about to enter presidential election cycles -- in March and November 2012 respectively -- and this could create uncertainty over the bid.

If Russia can do a deal with Georgia before a working group meeting in the first half of November, entry could be approved at the December 15 conference of WTO trade ministers in Geneva.

But Georgia may have lost its veto power since the working group meeting has been called, meaning Russia could reject Georgia's compromise offer and still proceed to WTO membership.

Russia's parliamentary election on December 4 is a further complication because a new parliament is likely to convene only in mid-January, pushing WTO entry into 2012.

(Writing by Amie Ferris-Rotman; Editing by Tim Pearce)