* Kremlin chief says Moscow has accepted Georgian deal
* Georgia wants deal wrapped up by Nov. 10
* Deal with Georgia is last big obstacle to WTO entry
By Timothy Heritage and Guy Faulconbridge
MOSCOW, Nov 3 Russia is on the verge of ending
its 18-year wait to join the World Trade Organization after
accepting a trade deal with Georgia, the last big obstacle to
membership of a club that will seal its integration into the
Russia's accession will be the biggest step in world trade
liberalisation since China joined a decade ago, making its $1.9
trillion economy more attractive to investors 20 years after the
collapse of the Soviet Union.
After nearly two decades of tortuous negotiations with the
153-member club, Russia's last challenge was to reach a deal
with Georgia to stop its entry being blocked by the former
Soviet republic with which it fought a short war in 2008.
President Dmitry Medvedev said Russia had accepted
the terms of a compromise deal proposed by Tbilisi via Swiss
mediators on monitoring mutual trade, and Georgian President
Mikheil Saakashvili hailed the deal as a "diplomatic victory".
"We are ready to accept certain compromise ideas that have
been recently worked out with the participation of Switzerland,"
Medvedev told reporters after the G20 summit in Cannes, France.
Medvedev said he hoped to have the "good news" of Russia's
WTO membership tied up by the end of the year. Georgia, which
does not have diplomatic relations with Moscow, said the
agreements for Russia's bid should be all ready by Nov. 10.
This is the date for a meeting of a WTO working group which
can then draw up a final document for approval by WTO trade
ministers in Geneva on Dec. 15.
Entry also needs the approval of Russian parliament, which
is likely before an election next March that is expected to
return Prime Minister Vladimir Putin to the presidency.
PUTIN SEES ECONOMIC GAINS
Russia's entry will secure membership of the biggest economy
still outside the WTO and send a signal to companies and
investors that Russia is starting to move closer to a rule-based
system of doing business.
Putin can expect little in the way of electoral gains from
an issue that analysts say does not interest voters.
But although he has shown signs of frustration with the long
accession process, Putin has made clear he regards WTO entry as
vital to fostering economic growth and development by attracting
foreign investors and lowering trade barriers.
The World Bank says WTO entry could increase the size of the
Russian economy by 3.3 percent in the medium term and 11 percent
in the long term.
"WTO membership will have no immediate impact on economic
growth, the day-to-day operations of Russia's corporations or on
the risk premium investors apply to investment in the country,"
said Chris Weafer of Troika Dialog investment bank.
"However, membership does establish a powerful catalyst for
a more serious approach to creating economic reform and industry
Traders say a clear indication of a deal for entry could
boost Russian stock markets by more than 5
percent, offering some potentially positive news for investors
worried by volatility linked to the euro zone debt crisis.
NEGATIVE IMPACT FOR SOME FIRMS
The WTO, which sets out to supervise and liberalise trade
between its members and solve trade disputes between them, was
once viewed by Moscow as an instrument of capitalist hegemony.
Opponents in Russia now say international companies will use
their clout to stifle domestic producers although Russia says it
has fended off attempts to split up gas monopoly Gazprom
, the world's largest natural gas company.
Firms in aerospace, the auto industry and local
manufacturers of tradable goods could suffer, analysts say.
"Concerns span fears about domestic industries losing
against more competitive foreign counterparts, households
finding it more challenging to adjust to the new environment,
and Russia standing little to gain quantitatively," said Ivan
Tchakarov of Renaissance Capital investment bank.
He dismissed the concerns as showing a lack of understanding
of the size of the potential gains.
Georgia, which had been under pressure from its Western
allies to reach a deal with Russia, offered what it called a
final compromise trade agreement last week.
"We are happy that Georgia supported the draft agreement and
that finally an agreement has been reached," Russia's WTO
accession negotiator Maxim Medvedkov told Reuters by telephone.
Under a proposal worked out with Swiss mediation, Medvedkov
said Russia had accepted the use of an independent company to
audit data on trade between Russia, two rebel regions backed by
Moscow, and Georgia.
"Russia and Georgia, as members of the WTO, would have to
pass this data to an integrated database," Medvedkov said.