WTO in confusion after Russia customs union plan

By Jonathan Lynn - Analysis

GENEVA (Reuters) - A week after Russian Prime Minister Vladimir Putin announced Russia, Kazakhstan and Belarus would pursue their World Trade Organization memberships jointly as a customs union and not singly, WTO members remain uncertain how the plan would work and what its motives are.

Negotiators from the three ex-Soviet republics briefed WTO members on the plan this week -- and also asked them frankly how it could be made to work.

"Nobody knows -- and they don't know," said one Latin American diplomat. "We were confused by the replies as well."

Russia, the biggest country outside the body that umpires world trade, has been pursuing membership for 16 years.

Moscow is clearly frustrated at the lack of progress on the talks, which often turn cool when western powers are unhappy with Russia, as after last August's war with Georgia. In fact, as an existing member, Georgia has an effective veto over Russia in the WTO, which operates by consensus.

This recalls China's long-running negotiations, which also went on ice at times of diplomatic tension, such as after the violent crackdown on pro-democracy protesters in Tiananmen Square 20 years ago.

China finally completed its accession negotiations after 15 years in 2001, inaugurating a period of rapid economic growth.

But WTO members have become increasingly skeptical about Russia's intentions in the light of conflicting statements from senior officials in Moscow, leading some diplomats to conclude that Russia does not really want to join.

INTEGRATION AND DOMINATION

Pursuit of a customs union fits in with a worldwide trend toward regional economic integration -- as well as Putin's wish to see Russia dominate its former Soviet neighbors.

Diplomats from WTO members said Russian officials still appeared to be feeling their way with the customs union plan.

Moscow's chief WTO negotiator, Maxim Medvedkov, said the three states would explore all options to make it work. Meanwhile, they have suspended their individual accession programs.

"They've certainly confirmed their intention to suspend -- that's essentially an attempt to buy breathing space," a senior European diplomat said.

A meeting between the three candidates and the WTO's 153 members on Wednesday turned largely on a highly technical distinction between a "customs union" and a "single customs territory."

WTO rules do not provide for countries to join as a customs union and there is no precedent for any countries doing that.