September 26, 2011 / 4:10 PM / 6 years ago

Putin presidency bid lends urgency to WTO talks: EU officials

BRUSSELS (Reuters) - Russia must join the World Trade Organization before WTO-skeptic Vladimir Putin wins presidential elections next year, but not before allaying European carmakers’ concerns, top EU officials said on Monday.

Saturday’s news that Putin -- who has been openly doubtful of Russia joining the trade body -- will run for the presidency in March 2012 elections, “indicates that we should act quickly, but not at any price,” German State Secretary for Economics and Technology Jochen Homann told Reuters.

A senior EU diplomat who declined to be named said:

“We need to bring this to a close as quickly as possible because of Putin becoming president.” Putin, who is currently Russian prime minister, looks likely to win the presidency.

EU Trade Commissioner Karel De Gucht told a news conference after a meeting of EU trade and industry ministers that there was a desire for progress on Russia’s entry to the WTO, but not at the expense of ignoring concerns over Russian investment rules for the automobile sector.

“There was unanimous support (from the bloc’s 27 states) that on the one hand we should do everything possible to make the entry of Russia into the WTO a fact by the end of the year but on the other hand we have to stick very clearly to some fundamental discussions,” he said.

The EU is the last trade heavyweight still hesitating over whether to allow Russia to become the WTO’s 154th member, but European industry keen to secure market share in the growing economy has been calling for swift admission to improve investment opportunities there.

“We think that both the EU and Russia would greatly benefit from Russia’s membership in the WTO,” said Finnish European Affairs and Trade Minister Alexander Stubb.

EU trade negotiators want to see a quick end to Russian policy that makes tax incentives to foreign investors dependent on boosting local production, which the EU fears could cost Europe jobs and turn Russia into an exporter competing with the 27-nation bloc.

Russia insists it will keep these measures in place until at least 2018.

“There are proposals to build in some safety clauses,” Germany’s Homann said, adding that “skepticism is appropriate.”

Russia’s $1.5 trillion economy is the largest still remaining outside the league of trading nations and its gross domestic product is expected to grow strongly in the medium term, according to the World Bank.

BILATERALS

With the Doha round of global trade talks all but collapsed, the EU has been pursuing bilateral free trade deals, with mixed success. A trade agreement with Ukraine will likely be sealed before the end of the year, De Gucht said.

But talks with India are in trouble over disagreement on how far India should open to European cars, alcohol and infrastructure contractors, and disagreement on how far Europe should open its doors to Indian service providers such as IT specialists.

Moreover, the European Commission will by the end of October ask permission from EU member states to start free trade talks with Egypt, Tunisia, Morocco and Jordan, De Gucht said.

Reporting by Juliane von Reppert-Bismarck; Editing by Matthew Jones

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