Mr.
Chairman, Minister, Ladies and Gentlemen
It gives me
great pleasure to be with you today. Over the last few years, this
forum has become an increasingly important event as the attendees and
the special quality of their interventions testify.
But this
year, this gathering is of particular importance for the Russian
Economy and the World Trading System. We are now entering into a
decisive phase of the process of reintegration of the Russian
Federation into the World Economy. The historic, political and social
importance of this is obvious. From my perspective, the accession of
the Russian Federation to the WTO constitutes a key element of this
process of re-integration. I am pleased to share with you today some
thoughts based on my experience as Director-General of the WTO.
New
Developments
Let me first
offer you a brief outline of recent developments in Geneva. The most
important of these is that nine years after applying to join the GATT
and seven years of its WTO Working Party, Russia's accession is
finally entering a decisive and final phase. This is vividly
demonstrated by the circulation of the first draft of the Working
Party Report. As I am sure you all know, the final version of that
document, together with a Protocol of Accession and the Schedules of
concessions in goods and services, will set the terms and conditions
of entry of Russia into the WTO. Accordingly, this first version of
the draft Report is indispensable as it sets the parameters for the
negotiations on the multilateral commitments that Russia will be asked
to undertake to secure entry into the WTO.
Reaching this
stage has required an intense process of legislative renewal and
reform by the Russian authorities. Just consider the progress in the
implementation plan pertaining to legislative work relevant for WTO
accession. Under this plan, in just two years, the number of
legislative acts which the Russian authorities themselves consider
essential for assuming WTO membership have been drastically reduced by
more than two-thirds to about 40 laws or decrees for which final
enactment is still pending. Legislative work is now moving rapidly on
a new version of the 'Customs Code' and of the law 'On State
Regulation of Foreign Trade Activity' which, once finally enacted,
should go a long way to aligning Russian provisions and procedures in
these key areas as well as with WTO requirements. It is clear to all
that a new legal framework is now taking shape in Russia which will
underpin Russia's accession commitments. Let me underline from the
outset that this development has been made possible because of the
strong political resolve shown by the Russian authorities at the
highest level. Without this resolve, the accession of Russia to the
WTO would still be very far away.
Relationship
with Domestic Reform
But why was
such a strong political resolve required to move things forward? The
answer to this question lies in the natural relationship between
accession to the WTO and the process of domestic economic reform in
Russia. Accession to the WTO is directly linked to a sound process of
domestic economic reform. This is a natural result of the need to
bring the internal economic structure of the country into line with
fundamental international norms, of which the WTO Agreement is the
expression. In recent years, developments on the domestic reform front
have indeed determined the pace of Russia's accession to the WTO. The
Government of President Putin has been marked by a new intensity in
the speed and scope of reform of the Russian economy. The energy with
which this task has been undertaken has caused the accession of Russia
to regain momentum and enter into its most crucial phase.
It is clear
from Russia's long history, the size of its internal market, and its
importance in the shaping of world politics that the process of
Russian economic reform will have wide-ranging political and social
implications. Changes of this kind consequently require vision as well
as steady determination. They also require the building of consensus
among domestic interest groups to sustain the changes, notwithstanding
inevitable difficulties. We are now at a stage in which it will be
critical to determine what further reforms are realistically possible
in the short term.
These types
of judgements will have to be made in an economic context which is
better than ever for the Russian economy. Annual GDP growth of 6 per
cent over the last few years, the lowering of the unemployment rate
from 13 to 8 per cent over the same period and the fact that last year
Russia has recorded the best investment return rate among all the
emerging markets. All this news cannot be ascribed to oil and natural
resources price trends. These are indicators that economic reform has
begun to pay its own dividends to the Russia economy. Russia's
accession to the WTO will consolidate Russia's comeback as one of the
main players in the world economy.
A
Time for Decisions
As I have
indicated, the time for hard decisions has arrived. Reform of the
Russian economy must be completed. Leaving the job half done would run
the risk of watching the results so far slip away. This would diminish
the prospects for further economic growth and threaten those that have
taken such risks in supporting difficult change. My point is that the
political costs of change have already been paid and that only early
accession to the WTO will allow Russia to receive the full dividends
of the hard work already done, such as guaranteeing the opening of
markets by all WTO Members to Russia on stable and predictable terms.
The availability of WTO dispute settlement procedures for the
resolution of trade disputes is a key aspect of WTO membership. It is
a critical tool to contain the sometimes inevitable commercial
disputes from spreading or affecting the more general political
relationships of the countries concerned. Membership in the WTO is the
guarantee that trading disputes, no matter how complex or difficult,
are contained and settled within a stable multilateral
framework.
There is a
widespread consensus in Russia on the strategic need to accede to the
WTO, even amongst those that question the possible terms and timing of
entry. Over the years we have seen interest groups in many acceding
countries engage in the same debates as the accession negotiations
enter into their final phase. Those type of debates require clear and
constructive decisions from policy makers. This is certainly happening
in the case of Russia's accession to the WTO. When G7 and Russian
leaders met in Genoa last summer they were able to move substantially
forward two issues. First, they provided through their personal
engagement a fundamental input for the successful launching of the
Development Round at Doha. Second, they also agreed to advance the
Russian accession to the WTO, again through their personal
intervention which is expected to continue later in June this year at
the next G8 meeting in Canada where the issue will again be
raised.
At the Doha
Ministerial meeting, WTO Member Governments agreed to undertake one of
the most complex and important trade negotiating Rounds ever
attempted. The Doha Development Round aims to define international
trading relations for the first part of this century and to provide
tangible and universal economic benefits to all, particularly
including developing economies and economies in transition. Should
Russia exclude herself from such a negotiation by delaying its
assumption of full membership in the WTO? In my view, the answer to
this question can only be no. Moreover, especially after the recent
accession of China, Russian entry will also provide a further step to
reaching fuller universality of the multilateral trading system which
would be beneficial for all Members.
But there is
another important aspect which makes the agreement in Doha
unprecedented. For the first time, the WTO Members also stressed the
importance of concluding the Round within a defined time-frame as they
launched the negotiating agenda. In the past, negotiations tended to
be extended in line with the increasing complexity of the
subject-matters addressed or with the difficulties encountered in
giving concessions in sectors such as Agriculture and Textiles. Today,
the understanding of both the task lying before us and the need to
deliver speedy dividends from the acceleration of the globalization
process have caused Ministers to explicitly state that results should
be seen in a much shorter lapse of time. This is why already in these
first months after Doha, the road-map for completion of the
negotiations is being put in place with unprecedented speed. We should
be aware of this, as it poses a defining choice for Russia and WTO
Members in the months to come. It also shows the need to further
accelerate the process of accession and bringing it to its conclusion
as rapidly as possible. In my mind, the road ahead is clear. Member
governments, the Russian authorities, the Secretariat and the
international community should all re-double our efforts in order to
make Russia's accession happen as quickly as possible. What is at
stake is the evolution and eventual stability of the multilateral
trading system.
The
Immediate Perspective
Even though
very strongly politically supported, Russia's accession to the WTO
cannot be concluded on a purely political basis. Clearly, the
contractual and legally binding nature of the WTO does not permit it.
To complete Russia's accession, we will need to see the completion of
meaningful market access deals in goods and services and a solid legal
and administrative framework in Russia - which will guarantee the
implementation of the contracted commitments. From this stand-point,
are the conditions for an agreement starting to come together? Yes. I
am firmly of the view that we can already see the emergence of the
basic elements that will eventually lead to a final package. In the
coming days when work restarts in Geneva, I expect to see further
positive developments. Without delving into the details, I believe
that in a few months time, and in the expectation of further
developments on the legislative front in Russia, we should be in a
position to precisely define the outstanding issues as well as set out
a framework for their resolution. At that moment, as always, the
necessary breakthroughs will depend upon political resolve and
courage. Therefore it is important, more than ever, to use the present
time to foster within Russia a constituency in positive support of
continuing efforts for economic reform. I have sensed, since my visit
to Moscow last year, that what we need is the constant engagement of
commercial, political and academic forces as well as sectors of civil
society to maintain inside Russia the necessary momentum for the
accession negotiations to their positive conclusion. I will continue
to do everything I can at my end to advance this historic cause and
opportunity.
Our common
objective is to build a balanced package capable of providing Member
governments with meaningful access to the Russian market, on
multilaterally enforceable terms. In turn, Russia will receive
guaranteed and predictable access to the markets of its trading
partners. Russia will also take a central place in the management and
future development of the world economic system. In this way Russia's
reintegration into the world market will be completed. No matter how
difficult the outstanding problems may be, I believe there are in
Washington, Brussels and Moscow, people with the horsepower, firepower
and willpower to make this accession happen. Accessions, in their
final phase, always come back to such core issues as agriculture,
banking, insurance or telecommunications. I can only hope that
negotiators think in historic terms, because it will be a great
failure of leadership if this accession is not completed in time for
the Mexico Ministerial next year.
Thank you.