The Canadian Connection in Russia's WTO Bid

By Phil Rourke
Executive Director, CTPL

In December in Geneva, Russia cleared the last official hurdle to becoming the 154^th member of the World Trade Organization. With the stroke of a pen, the global economy became more integrated and the WTO truly "world" in scope.

Canada played a small but significant role in this achievement, through a combination of good trade policy, focused development assistance and adept diplomacy.

In 1993, when Russia applied to join the WTO, the West saw Russia's membership as an opportunity to open up new markets, and a way to bring Russia into the international community after the dissolution of the Soviet Union.

To prepare for the transition, Russia asked for help. They realized they needed to know more than why Adam Smith was right, Karl Marx was wrong and John Keynes was misunderstood, confused or both. Fundamental change was required to their perceptions and how the Russian economy and its institutions functioned.

Western countries jumped in quickly to provide assistance. The Canadian government approached the Centre for Trade Policy and Law in Ottawa to help train Russian government officials and establish trade courses at universities in Moscow, St. Petersburg and elsewhere in Russia.

CTPL recruited former Canadian trade negotiators and diplomats to work with staff and faculty members at Carleton University and the University of Ottawa to deliver the assistance.

We set up a sister organization in Moscow, whose founding director, Maxim Medvedkov, soon became Russia's lead negotiator on WTO accession. His team consisted of many of those we had trained. As our relationship with the team developed, they began asking us for advice.

What the Russians appreciated was that our experts knew how to advance a country's interests when negotiating with larger economic powers. They had all learned their craft dealing with the United States, a key player, with the European Union, in any eventual deal to get Russia into the WTO. Canadians were used to being the underdogs in negotiations but winning in the end.

The Russian negotiating team knew what they were doing and had all the right instincts. What they wanted was a second opinion and someone to challenge their position. Our experts were all independent thinkers who spoke their mind. We were a natural fit.

Working with Canada's embassy in Moscow and with the Canadian International Development Agency and the Department of Foreign Affairs and International Trade back in Ottawa, CTPL and its Russian partners began putting together a proposal for direct Canadian support to the Russian WTO accession negotiating team. Other countries were offering similar assistance, but Russia was only interested in Canada.

It wasn't easy to convince everyone that it was in Canada's interests to provide direct negotiation support to the other side. We argued that if a country signs an agreement it neither understands nor expects to honour, then the whole exercise is pointless. If the goal is for Russia to meet and enforce its WTO obligations, then the decision is clear.

CIDA took a bold step and agreed. CTPL, supported by the Canadian government, began advising the Russian negotiating team. When the contract ended in 2007, we continued working with our Russian friends. We wanted to see a deal reached as much as they did.

Building confidence

Advising the Russians on the negotiations with Canada and other WTO members, however, did create some interesting situations. One of our trade officials once told me of a debate that Canadian negotiators had with the Russian team over the need to make improvements to the Russian customs regime as part of its WTO accession commitments.

The Russian negotiator shot back, listing ways in which Canada's customs administration didn't fully comply with international rules. The Canadian team members looked at each other, bewildered, thinking: "How do they know that?"

When the meeting ended, they found out. CTPL advisors were sitting outside the room, waiting for the Russians to finish. The Canadians just looked at us and smiled.

It was small but significant events like this that built Russian confidence in us. Over time, it also built Russia's confidence in the WTO system.

At last, Russia will soon be sitting with Canada at the WTO. Accession took longer than it should have, but what's important is that Russia is in, and committed to working within the system. This is good for Canadian business and for the world economy.

This achievement underscores the success of Canada's multi-layered support of Russia's WTO bid. The experience also demonstrates how the alignment of Canada's trade, development and foreign policies can advance our interests while promoting change in the world.

Phil Rourke is executive director of the Centre for Trade Policy and Law, based at Carleton University and the University of Ottawa.