We have previously discussed the question of Russia????????s membership on the G-8 panel; given Russia????????s feeble economic performance and, more importantly, its widespread corruption and anti-democratic politics, it is virtually impossible to offer any cogent argument in favor of membership. Russia simply is not qualified.

However, there is a second major question which is harder to resolve. Should Russia be admitted to the World Trade Organization? The WTO is not analogous to the G-8; it is a populist body, not an elitist one, and Russia????????s issues of democracy and corruption are less relevant here since there are some countries with levels of corruption and dictatorship similar to that of Russia which are members of the WTO. It currently has 149 members and half of them have been admitted since the organization????????s founding. On the other hand, some nations have been repeatedly rejected. Syria, for instance, first applied to join the WTO in October 2001, then again in January 2004 and September 2005. Its application for membership is currently still pending, waiting for WTO General Council approval to start negotiations. Russia is part of a large group of countries (nearly three dozen) consigned to ???????observer??????? status in the organization.

Whether Russia should be admitted to the WTO is a question ripe for debate, and hopefully the comments section of this post can be one forum for that to take place. To jump-start the discussion, let????????s address three recent events which militate against admission.

I. What does Russia want?

Probably the most interesting question for discussion concerning this issue is whether Russia actually wants to be admitted to the WTO or not. For sure, America has the right to oppose and veto Russia????????s admission even if Russia is otherwise qualified because of Russia????????s litany of aggressive actions in support of arch American foes like Iran, Venezuela, Hamas and Hezbollah. Nobody can argue that American is somehow obligated to accept Russian membership if it would violate America????????s national security interests. But there are those who argue that leverage could be obtained over the Russian economy by bringing it in to the WTO fold.

If Russia has malevolent intentions towards the U.S., then knowing what Russia truly wants concerning admission would be useful; the U.S. might simply oppose what Russia wants. Russia has applied for membership, and Finance Minister Alexei Kudrin appeared to lobby hard for admission during the recent G-8 conference in St. Petersburg (he even declared, prematurely it turned out, that the deal was done ???????? the U.S. reinstated its veto after the St. Petersburg talks). But the Kremlin is ruled by a clan of proud KGB spies and, for them, misdirection is child????????s play. Publius Pundit recently reported that the participants in the annual ???????Valdai Club??????? propaganda festival were vehemently told by Kremlin insiders that ???????for us young reformers, Putin is our hope.??????? As for America????????s efforts to block the admission of Russia to the WTO, the official implored ominously: ???????The WTO game is directly related to the siloviki. These people who are playing the game don????????t understand what????????s going to happen if we don????????t get a deal at this time. We have to get the message across to Bush: ???????Boys, stop drinking Russian blood.??????????????? If the Kremlin is sending the message that it wants admission, then maybe it should be denied on that basis alone.

On the other hand, it????????s hard to imagine how a rational Kremlin leader could think his recent foreign policy decisions would do anything other than provoke and alienate the United States, and in doing so doom Russia????????s chances for WTO admission (it was reported on September 21st that Russia and Venezula are now negotiating yet another massive arms deal despite the U.S. embargo on that rogue state, and on September 17th that it may be violating the nuclear arms accords with the U.S. by deploying non-strategic nuclear missiles on its submarines). So maybe Russia is intentionally burning this bridge, fearing that WTO admission would diversify the economy and make the Kremlin????????s control over the population more tenuous? In that case, maybe WTO admission should be pursued forthwith.

II. Neo-Nationalization in the Neo-Soviet Union

Over the past few days, Vladimir Putin????????s Kremlin has launched two startlingly brazen assaults on the property rights of foreign oil companies doing business in Russia; these events drastically alter the basic nature of the economy Russia would inject into the WTO bloodstream.

First, the Kremlin announced its intention to repudiate a production-sharing agreement on Russia????????s Sakhalin Island with ExxonMobil that had existed for more than a decade. In order to encourage exploration investments, the agreement called for new discoveries of reserves to be incorporated into ExxonMobil????????s interests, but a recent discovery was apparently large enough that the Kremlin didn????????t feel like sharing.

Then, the Kremlin moved against the other major foreign production base on Sakhalin, operated by Royal Dutch Shell, summarily revoking Shell????????s rights in the entire project and couching its revocation under the guise of an allegation that Shell had committed various environmental transgressions. This shocking action provoked a furious response from both the European Union and Japan. The Moscow Times reported:

EU Energy Commissioner Andris Piebalgs warned against the creation of an unstable investment environment that could halt future energy projects and disrupt global oil supplies. He took “this announcement very seriously indeed,” Piebalgs said in a statement, adding that he would soon discuss the issue with Industry and Energy Minister Viktor Khristenko. Shinzo Abe, Japan’s government spokesman and the man tipped to succeed Prime Minister Junichiro Koizumi later this month, said the decision, which effectively suspends all work on the multibillion-dollar project, could harm diplomatic relations between the two countries.

The Guardian reported that ???????an asset grab by the Kremlin this winter in the frozen climes of Sakhalin would convince many that Russia is hell-bent on creating a new economic cold war??????? and indeed, for all the world, these look like moves to renationalize the Russian energy sector, a horrifying prospect indeed. The investment gurus at the Motley Fool website were apoplectic, condemning Russia????????s actions as follows:

“All I really need to know, I learned in kindergarten,” goes the saying. Here, at least. Over in Russia, I’m guessing it goes more like: “What I didn’t learn in dyetsky sad, I never learned.” Case in point: Russian President Vladimir Putin, who’s acting less like a “Vladimir” and more like a tantrum-throwing “Vova” with every passing day. The unhappy moral of this story (for investors): Beware of investing in Russia. Certain children over there have difficulty playing nice with others, and sharing their toys.

Does Russia intend to use this leverage to continue its support of rogue regimes (Venezuela, Iran, Hamas, Hezbollah) and to further repress its domestic society? The conclusion seems almost inescapable. And if Russia is indeed better referred to as the Neo-Soviet Union, ???????hell-bent??????? on provoking a new Cold War with the U.S., then it would not seem that its economy is suitable for melding with the WTO group.

Yet, one cannot exclude the possibility that Russia????????s actions are to be explained simply by the increasingly bold and brazen level of corruption that is taking over Russian society. As previously reported on Publius Pundit, three recent comprehensive studies by respected international organizations document this phenomenon, placing Russia at the same level of corruption as the impoverished African nation of Niger. While some nations with levels of corruption similar to that of Russia have been admitted to the WTO, including Niger itself (member since 1996) those nations do not present the same type of threat to world security that Russia does. If admitting Russia to the WTO would fuel its economy and make it more dangerous, then obviously WTO admission must be rejected.

III. Spurning International Law

On September 13th RIA Novosti reported that Mikhail Kamynin, official spokesman for Russia????????s Foreign Ministry, had announced that ???????Russia is against involving the UN General Assembly in the resolution of long-running conflicts in the former Soviet Union.??????? Russia blocked the issue from being added to the agenda of the General Committee of the U.N. General Assembly for discussion. Kamynin stated: ???????We have from the outset been against politicizing this issue and involving the General Assembly.??????? He rejected the idea of any U.N. involvement in the boiling republics of Abkhazia and South Ossetia in Georgia, as well as the self-proclaimed republic of Transdnestr in Moldova, saying: ???????Russia regards attempts to eliminate the existing mechanisms of resolving the Nagorno- Karabakh, Georgian-Abkhazian, Georgian-South Ossetian and Transdnestr conflicts as counter-productive.???????

These cavalier Neo-Soviet statements, spurning the jurisdiction of the U.N. within Russia????????s sphere of influence in the former USSR, may be a harbinger of what Russia would do as a WTO member: Accept the provisions it likes and benefits from, and reject the others.

Kim Zigfeld publishes the Russia blog La Russophobe.