Russia About to Join WTO, For What?

Will America allow Russia to join the World Trade Organization if it supports tougher sanctions against Iran?

Successful trade negotiations between Georgia and Russia last week cleared the way for Moscow to join the World Trade Organization two decades after the collapse of the Soviet Union.

Russia has been negotiating to be admitted to the WTO for eighteen years.

Georgia was reportedly under strong pressure from the European Union and the United States to finalize a trade deal and give up its opposition to its northern neighbor joining the organization, despite Western criticism of Russia’s military interventionism in the Caucuses in late 2008.

The Georgian-Russian agreement, brokered in Switzerland, sees the deployment of international observers to monitor the movement of goods across parts of the borders of the former Georgian regions of Abkhazia and South Ossetia which were occupied by Russia almost three years ago.

The World Bank estimates that Russia’s accession could help its economy expand by an additional 3 percentage of gross domestic product as international trade and investment will be drawn to the country.

Last year, according to figures from the United Nations, more than $40 billion of foreign direct investment entered Russia but almost $52 billion left the country for opportunities elsewhere.

The Obama Administration may hope that by allowing Russia to join the WTO, it will agree to tougher international sanctions against Iran which is suspected of developing nuclear weapons in violation of its obligations under the nonproliferation treaty. If Russia becomes part of the organization, the American president said this weekend that he was prepared to lift Cold War era trade restrictions that affect the ability of its companies to do business in the United States.

Russia, a permanent Security Council member, has abided by United Nations trade sanctions against Iran which forced it to cancel an arms sale to the Islamic Republic in 2010. Its support for additional action has been lackluster however. Russia has helped Iran set up a nuclear energy industry since the early 1990s