16.04.2008 12:24:41
Ukraine heads for more tension with Moscow ( The Financial Times Limited 2008, April 15, 2008, by Roman Olearchyk in Kiev, Neil Buckley in Moscow and Frances Williams in Geneva )

Ukraine is likely to be in a position to block Russia’s bid to join the World Trade Organisation later this year, giving it significant leverage that it could use in natural gas supply talks or in retaliation over Moscow’s opposition to plans by Ukraine and Georgia to join Nato.

Ukraine’s parliament last week passed the final legislation needed for the country formally to join the trade body within weeks – enabling it then to join the working group handling Russia’s membership bid. President Viktor Yushchenko is expected to sign the ratification this week and notify the WTO’s Geneva headquarters, paving the way for Ukraine to join 30 days later.

Ukraine is not likely to be the only working group member with tough demands for Moscow. But its presence could strain already tense relations between the countries.

Moscow has imposed numerous trade restrictions on Ukrainian goods, notably metals and dairy products, and sharply raised natural gas prices for Kiev since the country’s foreign policy shifted westwards after the Orange revolution of 2004.

Oleksandr Shlapak, deputy head of Ukraine’s presidential office, said Kiev would certainly exercise its right to join the working group. “We want to discuss our future trade relations with our partners, and we have a right to this,” he said.

Valery Piatnitsky, Ukraine’s deputy economy minister and head of the country’s WTO delegation, said Kiev would attempt to lift Russian restrictions on Ukrainian goods. But a “political decision” would have to be made on how far Ukraine pursued its demands, for example in seeking leverage to reduce energy price increases.

“We will be able to raise any questions, just as Georgia is doing today. We will have the same powers, but this does not mean we will use them,” he said. “We will certainly seek to remove all trade restrictions on Ukrainian goods ... But if certain issues have already been raised by other countries in the working group, there is no reason for us to raise them.”

Maxim Medvedkov, Russia’s chief WTO negotiator, said Russia was “calm” about the prospect of negotiations with Ukraine, and ready to conduct them “within the framework of this international organisation”.

“Any WTO member has the right to begin negotiations with a country which is joining. Our task is to find a common language with our partners and agree. But what questions there will be from our Ukrainian colleagues, we don’t know,” Mr Medvedkov added, noting that Kiev was sending “very contradictory signals”.

But any delay caused by having to agree with Ukraine could come as a blow after Moscow officials said WTO accession could happen within months – and an agreement with the US at this month’s Sochi summit on a joint push to get Russia into the trade body by the end of the year.

No date has been fixed for the next meeting of the WTO working party considering Russia’s 15-year-old accession bid, which has been blocked by Georgia in a dispute over border customs checkpoints. Russia has also still to negotiate bilateral deals with Saudi Arabia and the United Arab Emirates on membership.