Georgian Ambassador on WTO Deal with Russia

Article by Zurab Tchiaberashvili, Ambassador of Georgia to the Swiss Confederation and the Principality of Liechtenstein, Permanent Representative of Georgia to the UN Office and other International Organisations in Geneva

An agreement signed by the Governments of Georgia and the Russian Federation as a result of bilateral negotiations on Russia’s membership to the World Trade Organization (WTO) should be deemed a serious success for the Georgian side.

Georgia has demonstrated that it is a full-fledged, responsible member of the international community, which wisely makes use of its rights and responsibilities available through membership in various international and regional organizations.

Georgia’s demands were fully legitimate and in line with WTO’s basic principles and regulations. In particular, based on the principles of transparency and uniform application of national policies and regulations, Georgia was pushing for the establishment of mechanisms to monitor all trade across the Abkhaz (Gantiadi-Adleri) and Tskhinvali region (Roki-Nizhny Zaramag) sections of the Georgian-Russian border.

Although Georgia’s demand was fully legitimate, before resumption of the Georgia-Russia talks on Russian accession to the WTO with Swiss mediation in March 2011, no tangible solution was in sight as to how Russia could accommodate this demand of Georgia.

At the same time, there was sizeable international interest, especially on the part of Georgia’s friends and partners, in Russia’s WTO accession. Such interest emanated, in part, from the expectation that its accession to the WTO would significantly increase bilateral trade with Russia and, further from the expectation that Russia, as a member of the WTO, would abide by internationally-recognized trade rules, a point Georgia itself has always emphasized. It will be much easier for Georgia to deal with a rule-abiding and predictable Russia, acting based on international norms, than with a Russia, that does not shy away from blatantly violating international norms. (Of course there are skeptics who argue that WTO accession will not make Russia change its ways in defying international norms and that it will try to misuse WTO regulations for its own benefit; that, however, is a matter of separate discussion).

WTO accession procedures (written regulations and practice) give a member state (in this case, Georgia) a right to veto an acceding state’s bid for membership (in this case, Russia). However, in practice, using this right of veto irresponsibly, without a well-founded justification, can become very damaging for the reputation of any WTO-member state.

Coincidentally, from the very resumption of negotiation in March 2011, through their conclusion, Russia was permanently trying to portray Georgia as a capricious country, seeking to block Russia’s WTO entry by pushing for politically-motivated demands not related with WTO principles and norms. In parallel, in its public statements, Russian officials stressed that it would be possible for Russia to join the WTO without reaching a bilateral agreement with Georgia and in fact, even demanded other WTO members to adopt this line.

Among the reasons behind Georgia’s success in the Swiss-mediated bilateral negotiations on Russia’s WTO membership were: (a) articulating its demands in line with WTO principles and rules; and (b) explaining these demands correctly and clearly to its key partners.

As a result, in the process of negotiations, Georgia delegitimized Russia’s key arguments that (a) Georgia was acting emotionally upon politically-motivated interests, and (b) for that reason, Russia should become a WTO member through bypassing Georgia. The reasoning behind this positioning was a realization on the part of Russia that the signature of any reasonable deal with Georgia in the framework of the Swiss-mediated negotiations would bring a serious blow to its general policy in respect of Georgia.

The role of the neutral party, Switzerland, widely recognized as a reliable mediator in such complex negotiations, is worth mentioning here. Russia would have had easily succeeded with its destructive tactics if talks between Russia and Georgia on Russia’s WTO membership had been conducted without Swiss mediation; it was quite difficult for Russia to do that in the presence of Switzerland.

The signed agreement and the negotiating process itself have also disempowered the arguments of those, who try to simply tailor their policies and actions to Russia’s imperial approaches. It appears, that with the right approach, Russia is amenable to making concessions, especially when it has something tangible to lose. The stakes in this case, through WTO membership, were better trading terms with its major trading partners, something Russia felt compelled not to forego.

A very important factor was the repeated emphasis by both the United States and the EU that Russia had to find a mutually acceptable agreement with Georgia and that there was no way for Russia to join the WTO without Georgia’s consent.

This created a serious problem for Russia then and is even more problematic for Russia now. It became obvious, that Russia completely disregards the positions of Tskhinvali and Sokhumi and that Russia uses them as hostages for its own benefits. As a result of the agreement, Russia has indirectly recognized that Georgia has the right to: (a) receive information about Russia’s trade with Georgia’s occupied territories; (b) demand transparency of trade in three trade corridors, involving three border-crossing points on the border between the territories of the two countries.

Although the topic of this article is to analyze international aspects of the negotiations and the reached agreement without discussing details of basic principles for a mechanism of customs administration and monitoring of trade in goods envisaged by the deal, one legal aspect definitely deserves attention: the agreed mechanism covers not only Gantiadi-Adleri and Roki-Nizhny Zaramag border crossing points, but also Larsi border-crossing point; with this Russia has lost an argument to support its claim about having separate trade regimes – one with Georgia, when movement of goods takes place via Larsi border-crossing point and another one, when movement of goods occurs via so called ‘third countries’ (via Gantiadi-Adleri and Roki-Nizhny Zaramag border-crossing points).

The agreement reached in the framework of the Swiss-mediated Georgia-Russia talks on Russia’s WTO membership has demonstrated that contrary to Russia’s claims that it will not talk with the Georgian government on any issue, Russia can, in fact, negotiate with Georgia. Moreover, given this agreement, Russian unwillingness to show similar pragmatism as in the WTO talks on other issues with Georgia will be even more blatantly irrational in the eyes of the international community and will raise further legitimate questions as to why other problematic issues cannot be resolved through bilateral dialogue. No one expects an immediate change in Russia’s imperialistic policies and a show of goodwill, but the WTO deal has created a certain opportunity to gradually overcome a deadlock in the bilateral relations.

The agreement itself creates one more inconvenience for Russia: the component of international monitoring in the process of implementation and oversight over the mechanisms envisaged by the deal. The damage inflicted to Russia’s imperialistic policy is not limited to the fact that Russia had to sign an agreement with Georgia, but further that international monitors will monitor/oversee the implementation of the agreement. Allowing international monitors on its soil is a serious compromise by a state with imperial ambitions.

Those, who were skeptical about the possibility of reaching agreement in the Swiss-mediated Georgia-Russia talks on Russia’s WTO membership, now say that Russia will not live up to its commitments. Judging from Russia’s policies (and not only in respect of Georgia) and from past experience, it is difficult to counter these doubts of skeptics. We have living examples of violations by Russia of agreements of even higher significance than the current one – the EU-brokered August 12, 2008 ceasefire agreement with Georgia.

By not implementing the WTO agreement with Georgia, Russia will not only seek to undermine Georgia once again; by doing so, Russia will trample on the momentous efforts put in the negotiating process by Switzerland, the European Union and the United States, and will put their respective reputations in question. Whether this is worth it for Russia or not, depends neither only on the provisions of the signed agreement and WTO rules, nor on trade matters exclusively.