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Rethinking Russia's WTO Accession
by William New
The future head of the World Trade Organization this week sounded a little less optimistic than his predecessor about the prospects for quick accession to the WTO for Russia.
Speaking to reporters after a conference of the Coalition of Service Industries (CSI) on Tuesday, Supachai Panitchpakdi, who will replace Mike Moore as the WTO's director-general as of September, said, "As with China, we need to have Russia in the WTO." But he added that Russia is further behind in reforms than China was before it acceded to the WTO last year.
"China has gone way ahead on [passage of] laws in recent years," he said, citing areas such as information technology, distribution and telecommunications. "Russia still has to come up with key laws."
But Supachai noted that greater flexibility from WTO negotiators could help Russia join the WTO before it actually passes all of the necessary laws. Moore predicted last month that Russia could accede in 2003.
Supachai, a trade negotiator from Thailand who is sensitive to developing countries' needs, also called for "simplified" accession procedures to help complete the process for others of the more than 20 countries waiting to join WTO. For instance, Saudi Arabia has been trying to accede for eight years. "Shifting the goalposts makes it difficult for developing countries," Supachai said.
Deputy U.S. Trade Representative Peter Allgeier said in his speech to the conference that Russia's accession will be important to the services sector but that "difficult" services issues with Russia remain. He cited the areas of telecommunications, distribution and financial services. Allgeier said there would be trade opportunities in Russia in audiovisual and computer services.
Robert Vastine, CSI president, said afterward that Russia "has not made offers anywhere near sufficient to be considered by CSI" as a candidate for the WTO. "We can't lose sight of the commercial realities," he said.
WTO Reforms May Come By Next Ministerial
Supachai said progress at the next world trade ministerial, in Mexico in 2003, would depend on the WTO providing sufficient technical assistance to developing countries before then. He also said he may advocate some reforms in the way the ministerial is conducted, including preparatory meetings between trade ministers, less emphasis on late-night deal-making, and an open committee for drafting the ministerial declaration.
The future director-general said he also might want to open the crunch-time "green room" process, which leaves the final decisions to a few dozen of the more than 140 WTO members.
Separately, the United States will work with "like-minded" countries on two key U.S. objectives so the WTO can begin negotiations at the Mexico ministerial and complete them by 2005, Allgeier said. The areas are transparency in government procurement and trade facilitation, or the easing the flow of goods and services across borders.
WTO members last week formed a Trade Negotiations Committee to guide the negotiations until their completion in 2005. The committee will meet at least every two to three months. Negotiations on the various agenda items, such as services and intellectual property rights, will be conducted in seven negotiating bodies.
WTO Tax Case 'Another Banana Issue,' Supachai Says
Speaking to reporters after his speech, Supachai said the WTO should avoid the issue of U.S. compliance with a contrary WTO ruling against a U.S. tax break for overseas corporate earnings. He said the issue should be confined to conciliation efforts between the United States and the European Union, which brought the case that could result in billions of dollars of retaliation against U.S. exports.
"It's another minor banana issue," Supachai said, referring to a case won by the United States against EU imports of bananas from certain countries that took years to settle.
The questions raised by the tax case involving so-called foreign sales corporations could help trigger improvement in the WTO dispute-settlement process, which will see early negotiation by 2003, Supachai said.
Hemispheric Trade Negotiations To Intensify
In his speech to CSI, Allgeier also gave a status report on negotiations for the hemispheric Free Trade Area of the Americas (FTAA), as well as bilateral negotiations for U.S. free-trade agreements with Chile and Singapore.
FTAA negotiations over services and industrial goods begin in earnest in May, he said, so procedures for the talks must be adopted by April. A revised draft of the agreement will be released before the next FTAA ministerial in October.
There is "an awful lot of work to do" before the targeted completion date of January 2005 for the agreement, Allgeier said.
On bilateral talks with Chile, he said the two sides aim to finish the deal "in the early part of this year." The Singapore negotiation is moving forward but has a "less precise" target date, Allgeier said. President Bush last month announced that the United States will explore a free-trade agreement with Central America, and the Office of the U.S. Trade Representative (USTR) has begun that process, Allgeier said.
USTR also has received several expressions of interest in bilateral talks with the United States from various countries, "some more credible than others," he said. Allgeier made an appeal for Congress to pass a bill to renew presidential trade-negotiating authority soon. "It will help us tremendously," he said.
Tidbits From Britain And Beyond
Andrew Pinder, the e-envoy for the United Kingdom, will be in Washington on Friday and Saturday.
He will arrive from Boston, where he will meet with World Wide Web creator Tim Berners-Lee, and on Friday, he will meet with senior Bush administration officials to share information about e-government initiatives. On Saturday, Pinder will speak at the National Association of Secretaries of State.
In other European news, AustralianIT reports on an association's charge that IBM is liable for the Nazis' use of its punch-card machines to identify Jews and gypsies killed in concentration camps. The group filed suit in Switzerland.
And the Global Entertainment Retail Association of Europe (GERA-Europe), which is working to create a platform for resolving issues in entertainment retail online and offline, urged broader digital distribution of music. In a statement this week, the group said, the recording labels' "attempts to control the market through [services like] MusicNet and Pressplay might create serious market restrictions and therefore reduce customers' interests and benefits." Currently, there are five major suppliers of online music, the group said.
Elsewhere, The National Post reports that the proposed U.S. system for tracking the entry and exit of visitors to the United States is raising concerns among Canadians about their ability to traverse the border.
Global Chip Sales Level In Fourth Quarter
The Semiconductor Industry Association this week announced that worldwide sales of semiconductors in the fourth quarter of 2001 remained the same as in the third quarter, at $30.5 billion. The sales ended three quarters of double-digit declines, SIA said in a release.
Sales of wireless handsets and personal computers jumped in the fourth quarter, though the Japanese market remained flat, SIA President George Scalise said.
Scalise predicted "flat to slightly up" sales in the first quarter of 2002, a sign of recovery, he said.
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