Putin Blasts World Trade Organization

Russia is seeking entry in the World Trade Organization. At least that is what everyone thought. However, with only a few details left to hash out, in an angry tirade, Putin Says W.T.O. Rules Don’t Apply.

Prime Minister Vladimir V. Putin of Russia interrupted a speech on the economy by a deputy minister on Friday to sharply rebuke him for suggesting that the government should abide by World Trade Organization rules on import tariffs. Russia is not yet a member of the global trade group but is applying to join.

Trade officials in both the United States and the European Union say Russia has met nearly all requirements after cracking down on pirating, agreeing to stricter rules against counterfeited pharmaceutical drugs and negotiating with Finland on tariffs for round-log timber exports, a particular sticking point

So it came as a surprise when Mr. Putin interrupted the speech of a deputy minister of economy, Andrei Klepach, to say he would order Russian officials not to obey W.T.O. rules.

Mr. Klepach had been talking about industrial electrical equipment, like turbines, saying that Russian factories were struggling to compete with Chinese imports and that officials could not raise tariffs because of the free trade commitments undertaken by Russia while trying to join the W.T.O. Officials’ “hands are tied,” the deputy minister said.

Mr. Putin then burst out, using sharp language, that Russian officials should ignore the rules. “This is a direct order,” Mr. Putin said, according to a report on the meeting in St. Petersburg by the Interfax news agency.

“As soon as we start fulfilling W.T.O. obligations without being a member, they, our partners, will lose any wish to admit us,” Mr. Putin said. “Why the hell should they admit us if we already observe everything?”

Mr. Putin has been known as a W.T.O. skeptic for years, despite his government’s negotiation for membership.

Excuse me for pointing out the obvious, but membership in any organization is based on agreement to observe the rules. Whether everyone does is of course another issue, but so is Putin's direct order to disobey rules.

Putin's tirade smacks of some deeper underlying economic problems.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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