The Hindu Business Line : Russia-US trade off

The Russian threat to start a trade war with Washington on the issue of its ascension to the World Trade Organisation smacks of a brinkmanship reminiscent more of the Cold War years than the current phase of international politics. Considering the fact that the specific issue on which the negotiations with the Americans have been stalled is "not too significant", in the words of the Russian Minister for Economic Development, Mr German Gref, the needle of suspicion for creating the problem inevitably turns to Moscow on the ground that if the obstacle is `small' there should have been no problem in overcoming it provided there is the political will to do so.

In fact, if one views the concessions that have already been made by the Russians to the West, in general, and the US, in particular, in the course of the long-drawn WTO accession negotiations (the US is the last country with which Russia has to arrive at an agreement before its WTO membership becomes a reality), the stalling of the talks with Washington on the ground concerned becomes difficult to accept unless there are other extra-WTO issues involved. The specific reason leading to the stalling of the talks and the subsequent trade-war threat was the application of Russian "veterinary standards to US beef and pork imports" by Moscow. While Moscow said it had refused a US demand for an immediate increase in import of US beef and pork before Russia completes a review of America's food inspection system, Washington insisted that Moscow should allow such imports "without auditing the American veterinary control system." Quite clearly, if the Russians have agreed to settle intellectual property rights differences and make concessions in the financial sector (insurance, etc.,), there is no reason why they could not have opted for a softer line on the meat-production-facility inspection issue, especially when US the standards are not among the world's worst.

The trade sanctions threatened by Moscow are likely to make a big impact in the US because under a 2005 four-year agreement between the two countries, the US is poised to send to Russia as much as a third of its total poultry exports this year. Not surprisingly, Washington has said that imposition of sanctions would complicate Russia's WTO accession process, something with which the Geneva-based body could well do without, especially now when its very future is uncertain given the disagreements over the Doha Round. Undoubtedly, a `resurgent Russia' will be good for the international community as a balancing factor, and positively so for the WTO (particularly the developing members), which is why it would have been so much better had Moscow refrained from turning the WTO negotiations into one more battleground in its image war with Washington.

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