Georgian Negotiator Speaks of WTO Talks with Russia

• Two components for transparency of trade;
• Tbilisi seeking for ‘status-neutral solution’;
• ‘We’ve already made one serious concession’;
• ‘We don’t demand deployment of our customs officers’;
• Russian embargo on Georgian products not part of WTO talks;

In an interview with Civil.ge on August 8, Deputy Foreign Minister, Sergi Kapanadze, who is one of the two Georgian negotiators in WTO talks with Russia, laid out some details of Tbilisi’s position in the ongoing Swiss-mediated talks with Moscow.

He says that exchange of advance cargo information – more than just statistical data on movement of goods, combined with international monitoring can secure transparency of trade across disputed borders in breakaway Abkhazia and South Ossetia. Kapanadze says that these two components are part of the proposal tabled by the mediator ahead of the third round of talks in July.

The next round of the Swiss-mediated talks is scheduled for mid-September; but meanwhile, Kapanadze said, consultations would continue with the mediator including with the participation of customs experts to discuss some "technical issues".

Below is the transcript of the interview:

Q: In his August 4 interview with the Georgian and Russian media outlets, President Medvedev says Russia is ready to provide information about movement of goods across border crossing points in Abkhazia and South Ossetia and that he has already agreed this issue with the Swiss President and discussed it with President Obama. Is this issue being discussed in the Swiss-mediated talks and has Russia really reached such agreement with Switzerland and the United States?
 
A.: Certainly there is no such agreement. With this [referring to Medvedev’s remarks] Russia is showing its desire to join WTO without observing WTO rules and regulations and [tries] to make a deal with Georgia through an easy way. Such statistical data [on movement of goods] won’t be of any additional value and in general it is possible to obtain such information even now. If Russia really thinks, that it will make through and join WTO only with providing such information, then it is simply deceiving itself.

You are probably aware, that before the [third round of Swiss-mediate] talks in July, the Swiss side has offered a paper, which envisages deployment of international monitors in those trade corridors and border-crossing points, which are under discussion with the Russian Federation. The Swiss proposal also entails establishment of a quite state of the art system of exchange of information, which is far more advanced method then just exchange of statistical data. It envisages exchange of trade-related information both prior and after crossing the border. This proposal makes it possible to control trade through Gantiadi-Adleri [in breakaway Abkhazia] and Roki-Zemo Zaramagi [in breakaway South Ossetia] border crossing points. The Russian Federation will make a significant step towards joining WTO if this proposal becomes acceptable for [Moscow]. If this proposal is unacceptable, unfortunately for [Moscow], it will have to say no to joining WTO.

Q.: These two issues – international monitoring and advance exchange of information – are part of one package, or are kind of options alternative to each other?

A.: These are part of the same proposal. Only the combination of these two factors can create a system that would secure transparency of customs administration. The system will fail to work properly and its efficiency will be limited in case of absence of one of these two components. 

Q.: It was clear from the Russian President’s interview, that Moscow is against of EU’s involvement in monitoring of trade. President Saakashvili said in July, that Georgia wants an international monitoring by any "serious" organization without making any focus on EU. Are you already discussing this issue during the negotiations and if yes, can you say whether Russia is against of international monitoring in general or just against of EU’s involvement in the process?

A.: For us it is important to have a monitoring by a significant, authoritative third party – for example any international organization. We think, that EU would fulfill this task very well, because it has a huge experience of this kind of monitoring; EU is engaged in a similar operation in Moldova and also has this kind of administration experience in Israel-Palestine case. 
 
The only thing I can say about Russia’s position and its stance is that negotiations are still ongoing and it is not fully clear what the Russia’s position will be. The fact is that customs administration will not be fully transparent and effective without [international] monitoring. 

Q.: In the same interview President Medvedev suggested, that Georgia was politicizing WTO talks, saying that "under the guise of WTO accession, Georgia is trying to push through a new edition of the political problem."

A.: We want to clearly state, that any agreement, which will be achieved with Russia in the process of WTO accession, will be status-neutral and oriented solely on trade and WTO norms and it will have nothing to do with politics. Such insinuations from Medvedev and other senior Russian officials as if Georgia politicizes the issue is totally groundless, which aims at misleading the society. These very statements by Russia indicate that it is Russia itself, which politicizes this process.

The Georgian authorities have already showed good will when we agreed on holding talks on Russia’s WTO accession, by the way, after Russia had officially requested us to hold these negotiations. You remember, that before the 2008 war the Georgian-Russian negotiations on WTO accession were coordinated by the WTO secretariat, but these talks were halted after the war. In the beginning of 2011 Russia requested us to resume negotiations and we have showed our good will and resumed dialogue with them, this time with the mediation of Switzerland.

Usually, WTO-member states put before a membership aspirant country a long list of demands and this list also include such demands, which are related to very serious political issues, requiring political decisions. We have not done anything like this. We continued talks only on those issues, which we were raising previously [before the resumption of talks] – improvement of transparency of customs administration. This is already a serious demonstration of our good will, which shows, that Georgia intends to play with civilized rules of the game with Russia.

We discuss political issues with Russia in other formats [of negotiations], for example in the Geneva Discussions. We are also ready to discuss these issues in a bilateral [format].

We do not discuss and do not intend to discuss de-occupation issues in frames of WTO talks. It, however, does not mean that Russia will join WTO without solving issues related to illegal trade and customs administration between the customs territories of Georgia and Russia. Resolving of these issues is necessary, but through applying status-neutral mechanisms.

Q.: What are the concessions, if any, Georgia is planning to make in the process of negotiations?

A.: It would not be correct to speak about making concessions by the Georgian side only, because process of negotiations means making concessions by the both sides and it means mutual compromises. Naturally there are issues on which we can not compromise. Our red lines are very well known by the Swiss side, by other friends, as well as by the Russian Federation.

We’ve already made one serious concession – we do not demand deployment of our customs officers on Psou [river dividing Russia from breakaway Abkhazia] and Roki Tunnel [linking Russia with breakaway South Ossetia], as we understand that raising of this issue would amount to politicizing of [the process]. That’s a very serious compromise and we hope, that it will be appropriately regarded by all the parties. We’ve made this concession because to show everyone, that we are constructive and we are interested in Russia’s WTO accession, but only if Russia is going to follow and comply with WTO principles and norms. Hence, we won’t be able to again make more of this kind fundamental concession.  

We will continue constructive participation in the negotiations and we will try to take a creative approach towards the issues, which represent source of disagreement between Georgia and Russia. We can summarize it this way: the ball is now in Russia’s court; if it is interested in joining WTO, it will accept the Swiss proposals; but if it is not interested in this – [Russia] will reject this proposal.

Q.: In the context of WTO talks, President Medvedev also raised the possibility of lifting trade embargo. How important this issue is for Georgia and how important part this issue takes in WTO-related talks?

A.: The issue of Russia’s embargo is not at all part of the discussions.

It should be clear for everyone once and for all – there is only one problematic issue [in WTO-related process] and that’s the issue, which is under discussion for almost ten years already and which is related to putting illegal trade and illegal customs administration between our countries in the framework of WTO regulations and norms. No embargo is being discussed, whatsoever.

That’s not an issue of principle importance for us for three reasons. Firstly, those companies, which have been expelled from the Russian market have already found new export markets. If these companies return back to the Russian market and if then Russia again expels them, that would be disastrous for us. Moldova is a very good example of that. Russia re-imposed embargo on Moldovan products after pro-western political forces came into power in Moldova. Probably not a single rational business should export more than 10% of its production to Russia, because this is not a sustainable market and it is often used by the Russian authorities for political purposes.

The second reason why we do not discuss this issue of embargo is that Russia’s embargo depends on orders from [Russia’s chief sanitary inspector Gennady] Onishchenko. Onishchenko receives political orders and stops [Georgian] imports and there is nothing to negotiate; it makes no sense to hold talks on good will of Onishchenko.

And the third reason: when and if Russia joins WTO, it will have to lift this embargo anyway, because it is impossible for one WTO-member country to have embargo against another WTO-member for political reasons. So there is nothing to negotiate in this regard. Russia is making public statements time after time about its readiness to lift embargo, because it understands very well that sooner or later Moscow will have to take this step.

Q.: There are some speculation that there seems to be differences within Russian authorities themselves over whether to join WTO or not and that there are some groups within the Russian authorities, which are against WTO accession. What do you think about it?  

A.: I would not like to speculate on Russia’s domestic politics. But sometimes Russia takes such steps that one may suppose that it really does not want to join WTO and is looking for a pretext to put a blame for that on other country. If you look at the negotiating process with us, you will see that in parallel to negotiations there are always provocations from Russia – there was [Russian Foreign Minister Sergey] Lavrov’s visit to Abkhazia, where he made remarks about WTO accession; then Russia demonstratively violated gentlemen’s agreement with us and the Swiss side not to speak publicly on negotiation details when [Russian officials] spoke about thier position with the Kommersant. Ahead of the previous round of talks, the Russian President demonstratively submitted a so called agreement on customs issues with Abkhazia to the State Duma for ratification and a so called joint Russian-[South] Ossetian governmental commission held its meeting in Akhalgori [in breakaway South Ossetia] and agreed on simplification of [procedures] for trade.

This kind of steps, let’s say it directly, distances Russia from the World Trade Organization and sometimes [such steps] even leave an impression, that there are forces in Russia, which do not want the country’s accession to WTO; it would be beyond my authority to elaborate further into details of this matter.