Georgia claims victory in Russia WTO membership deal

Georgia claimed victory on Thursday after arch-foe Moscow agreed to its conditions in a deal paving the way for Russia to end its tortuous 18-year wait to join the World Trade Organization. "It is our diplomatic victory," Georgian President Mikheil Saakashvili said in comments broadcast on national television. "What we have achieved today is a very important acknowledgment of what Georgia's customs borders are," he said. The decisive breakthrough with the last holdout nation came after months of closed-door meetings in Switzerland between the two ex-Soviet rivals that have not had diplomatic links since fighting a brief war in 2008. Russia is now expected to shed its status as the world's biggest economy outside the world's premier free trade club by winning formal accession at a meeting tentatively set for the middle of December. "We are happy that Georgia supported the draft and that the agreement has finally been reached," the Interfax news agency quoted chief Russian negotiator Maxim Medvedkov as saying. The Swiss-mediated deal will see international monitoring of cross-border trade through Georgia's Kremlin-backed breakaway regions of Abkhazia and South Ossetia, despite Moscow's initial rejection of external oversight. Georgia sees the deal as an endorsement of its "territorial integrity" amid what it calls the Russian occupation of the two rebel regions, where Moscow permanently stationed thousands of troops after recognising both as independent states in the wake of the 2008 war. "It is a very important principle that even an occupier recognises international monitoring. Our position was crystal-clear -- either this, or Russia will not become a WTO member," Saakashvili said. Medvedkov said a part of the deal would see an independent company contracted to audit trade in the disputed regions, which would also act as a mediator and information handler between Georgian and Russian customs agents. The agreement "is based on our proposal and does not go outside the frameworks of Russia's principled stand," he said. Georgian officials have said they believe the deal would be signed within a week. There are two more lower-level WTO sessions scheduled for November before all of the bloc's top representatives gather for a December 15-17 ministerial meeting at which Russia's membership is due to be put to a vote. Russia has already ironed out its disputes with the European Union and has no direct trade issues remaining with the United States. Other big nations such as China are also on board. But the US Congress has still not revoked the 1974 Jackson-Vanik amendment -- a piece of Cold War-era trade legislation that stripped most-favoured nation status from countries impeding the emigration of Jews to the West. That amendment could theoretically lead to retaliatory steps being taken against the United States once Russia joins the WTO. Analysts are united in viewing free trade as a net benefit for Russia. The World Bank estimates that WTO accession may add up to 11 percent to Russia's gross domestic product in the long term as business becomes more streamlined and the investment climate improves. "I think this was a big event for Russia -- it is very good for its image," said Renaissance Capital analyst Ivan Tchakarov.