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To The WTO: With Love From Russia

by Jeremy Hetherington-Gore,, London

30 October 2007

So the Cold War is starting up again? Russia and America will fight it out over missile defences? The EU will drive away Russian investment in its energy sector? Well, not exactly: after a Portuguese face-off last week between Mr Putin and European negotiators, the menacing bear broke into a smile and said, oh well, everything will be all right, you know.

Never believe a journalist or a Russian (old Georgian proverb). They are made for each other, indeed. After six months of relentless propaganda against America, the EU and just about everybody else who doesn't live within 50 kilometres of the Kremlin, all voraciously lapped up by the media, it turns out that all the poor Russians wanted the whole time was to be members of the World Trade Organization.

Only last June, President Putin told the Saint Petersburg International Economic Forum that the WTO was "archaic, undemocratic and inflexible", proposing the creation of a Eurasian equivalent. It's good to know that the 1990s Russian jokes about why only one Monopolies Commission weren't entirely frivolous; but the truth came out in Marfa, Portugal at the weekend, when Mr Putin summed up the talks:

"As a whole, the dialogue is going positively," he said at a news conference, "We expect that it will end with a positive result."

The Russian WTO show has been running for ten years, and it will be ironic if Mr Putin, who deservedly or otherwise is not getting a good rap from the world's intelligentsiya, is remembered as the man who took Russia into the Holy of Holies of the market economy.

Certainly he hasn't set out to make friends and influence people: "Such a tough position toward Russia is unjustified and dishonest. It's an attempt to twist our arms, but Russia's arms are getting stronger and the EU won't succeed in twisting them." That was said in 2003, and marathon runner Pascal Lamy, who at the time was European Trade Commissioner, responded:

"We are not asking the Russians to make unreasonable concessions or to force obligations on the Russians other than those in the WTO, or to try and influence the decisions the Russians will adopt at home."

And only a few weeks ago, Russian Economic Development and Trade Minister German Gref, told Russian and German businessmen: "Negotiations are proceeding with considerable difficulty. They are deadlocked."

After all this, Mr Lamy, now head of the WTO, must have a special joy as he watches Russia approach the finishing line.

But they must be stocking up on coffee at the offices of the US Trade Representative in Washington. China's accession to the WTO has led to an endless series of stand-offs over shoes, steel, IP and who knows what else, and the Russians have nothing to learn from the Chinese about West-baiting.

One person is home free, at least. Robert Zoellick, who was Pascal Lamy's sparring partner for so many years, has been booted upstairs to the World Bank, and spends his time deciding where to put his two hundred billion dollars, or whatever. Bet he'd rather have been in Marfa, though.

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