Everyone is reporting today how Pres. Medvedev changed Russia’s WTO entry strategy yesterday at his G8 press conference, with hundreds of English-language articles already published on the subject, even more than in Russian. Kommersant provided a good background to the whole issue. Remember that last month Putin announced that Russia was withdrawing its WTO bid, and would instead join as a member of a customs union with Kazakhstan and Belarus. This prompted a lot of acrimony from Western countries, and some saw it as a preemptive message strike against Pres. Obama on the eve of his first visit to Moscow, while others claimed it showed that Putin was still ‘in charge’.
Are Medvedev and Putin Playing Good-Cop, Bad-Cop?
Now, the Western press, the Financial Times for example, is quick to portray it as a ‘clash’ between Medvedev and Putin. But is this really the issue on which Medvedev is likely to proclaim his independence? I don’t think so. First, it’s important to point out that a majority of Russians do not even consider the WTO useful, much less an urgent priority. Second, from the elite perspective, there really aren’t many economic actors who are pushing for this, and in fact the prevailing trend is against WTO membership.
From the Western side, it is difficult to understand the anger at Russia for slowing WTO progress – the Doha Round of WTO talks has been underway since 2001[!] and the negotiations perennially devolve into shouting/finger-pointing contests (though this does sound like something Russia would enjoy). More important, Russia has been trying to enter the WTO since 1993[!!!], and every year the USTR and Minister of Trade trot out press releases claiming that agreement is ‘within reach’ and Russia should join ‘in the next year’. (Even more hilarious is Georgia – virtually all of this country’s exports go to Russia and yet it still occasionally tries to play spoiler of Russia’s WTO membership, despite the obvious benefits it would confer on Georgian exporters.)
The reality is that Russia’s WTO accession is much more valuable to each side as an agenda item than as an accomplishment. For historical reasons, every single issue of US-Russia relations is linked to a broader whole, with the effect of equating pork exports to ICBMs. Thus, if Russia actually joined the WTO, there would be one less bargaining chip for each side in negotiations.
And this brings us back to today’s news – what did Medvedev do? All he did was reverse a not-quite-month-old policy that was a stupid idea to begin with. What it looks like is that mean PM Putin dashed the WTO dream and nice Pres. Medvedev rescued it. But really, nothing happened, and we are simply back to the status quo that has existed for 16 years. Meanwhile, Russia gets credit for ‘giving something up’ when it hasn’t given anything – all they gave up on was a strategy that they knew wouldn’t work in the first place (Belarus!!).
To simplify it into a cliche, Putin and Medvedev played a bad-cop, good-cop routine that resulted in a [rare] Kremlin PR victory. The only remaining questions concern the practical impact – I highly doubt/hope that Obama did not give anything up for Medvedev’s purported ‘acceptance’ of our position. On the U.S. side, perhaps this will spur a legislative effort to repeal Jackson-Vanik, as this issue was put on hold after Russia announced the customs union idea.
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