Russia may soon find itself inducted as the 148th member of the World Trade Organization, a prestigious position for which it will largely be able to thank the European Union.
Acquiring EU support for Russia’s accession to the wto has long been the major stumbling block. The EU’s key hangup was Russia’s natural gas prices.
Europe has long eyed this resource. As the single largest producer of natural gas in the world, Russia is also Europe’s greatest source of this valuable commodity. In order to appease EU demands, Russian President Vladimir Putin agreed to almost double the price for Russian consumers—mostly by slashing government subsidization. With the funds it has saved, the government should be able to develop the infrastructure needed to transport gas to Europe. For Europe, it is far better for Russia to pay for the pipelines than to place the burden on European companies.
For Russia, accession to the wto promises more trade partnerships with easier exporting opportunities for Russian companies and a more competitive economic growth rate. Perhaps even more important, wto membership would be symbolic of Russia’s renewed status as a world power after the fall of the Soviet Union.
It appears Russia will not have long to wait for induction into the wto. At June’s G-8 summit, it secured unanimous support from G-8 members. The power of eastern nations is increasing in what has up to now been largely a Western-dominated club.
The EU and Russia will continue to scratch each other’s backs as Europe needs Russian energy exports and Russia needs European political support. But this marriage of convenience is not destined to last. Our booklet Russia and China in Prophecy shows how the love affair will end.