GEORGIA AND RUSSIA CONTINUE NEGOTIATIONS TO BREAK

UNCLAS TBILISI 000343

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/CARC, EEB/TPP/MTA, EUR/RUS
COMMERCE FOR DANICA STARKS
STATE PASS USTR FOR PAUL BURKHEAD AND CECILIA KLEIN

E.O. 12958: N/A
TAGS: ETRD PREL WTO USTR GG RU
SUBJECT: GEORGIA AND RUSSIA CONTINUE NEGOTIATIONS TO BREAK
IMPASSE ON WTO MEMBERSHIP; NEW BIT A POSSIBILITY

REF: 07 TBILISI 3098


1. (SBU) Summary: Econoff met with Deputy Minister of
Economic Development Tamara Kovsiridze on February 26.
Kovsiridze said an agreement has been reached in principle
with the Russians to allow Georgian officials to staff border
crossings between Russia and Georgia's breakaway regions of
Abkhazia and South Ossetia. The border crossing issue has
been the only point of disagreement preventing the Georgians
from finalizing their bilateral agreement with Russia to
allow Russia's accession to the WTO to move into the
multilateral negotiations phase. However, because of adamant
refusal by the Abkhaz and South Ossetian de facto governments
to allow Georgians to operate in those regions to monitor and
check the transit of goods, people and potentially dangerous
materials, the GOG insists on a Georgian presence at the
checkpoints -- with international monitoring, similar to EU
involvement on the Moldova-Ukraine border. Unfortunately,
the Russian MFA issued a press release on February 27,
stating that no agreement on the border crossings will be
made without consent of the de facto authorities in Abkhazia
and South Ossetia. Kovsiridze also said the Ministry of
Economic Development has reviewed the new-style U.S.
Bilateral Investment Treaty model and would be willing to
discuss signing it during President Saakashvili's visit to
the United States in March. End Summary.

RUSSIA/WTO
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2. (SBU) Kovsiridze said that she had met with Russian
negotiators in Geneva on February 19. Although the Russians
have been insisting that the border crossing issue is a
"political" one, and not a WTO issue, the Secretariat has
been pushing them to negotiate with the Georgians to keep the
accession process moving forward. The February 19 meeting
was arranged by the Secretariat, Kovsiridze said.


3. (SBU) In November, Georgia presented the Russians with a
set of principles for resolving the border crossing issue
(reftel). Kovsiridze confirmed what Georgian newspapers have
reported, that an "agreement in principle" with the Russians
has been reached to allow the Georgians to establish a
presence by its officials -- in Georgian territory -- at the
Russian border in Abkhazia and in South Ossetia. The reports
were immediately denounced by the Abkhaz and South Ossetian
de facto governments, who swore they would never allow such a
thing. Thus, the Russian agreement offers less than meets
the eye, since it leaves implementation up to the Georgians
on what is their sovereign territory, but which they do not
control. Therefore, Kovsiridze said, the Georgians are
insisting on some kind of additional international presence
at the border crossings, similar to EU-supervised
arrangements on the Moldova-Ukraine border. The GOG is
already asking the EU to consider the idea. The Georgians
and the Russians will meet again in early April for further
discussions.


4. (SBU) At the same time, the Russian Foreign Ministry has
denied that its negotiators in Geneva made any concessions on
the point. In a February 27 press release, the Russian MFA
declared that "joint customs control at the Ganitadi-Adler
border crossing point (in Abkhazia) and at Roki (in South
Ossetia) depends on the reolution of the Georgian-Abkhaz and
Georgian Ossetian conflicts and on the consent of Sokhumi and
Tskinvali." If that is the case, the Georgia-Russia

SIPDIS
discussions remain as dealocked as ever.

BIT SIGNING BY MARCH?
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5. (SBU) Kovsiridze said that the USG has presented the
Georgian Embassy in Washington with the newest style
Bilateral Investment Treaty (BIT) and suggested that it might
be signed as a deliverable during President Saakashvili's
visit to Washington in March. She said that the text has
been reviewed by Ministry of Economic Development officials
and they have not raised any major concerns with it. She
added that it seems to track other BITs the Georgians have
with other countries. She guesses it could be approved by
the GOG for signature rather quickly. We understand from the
Department that while the text of the BIT may not be
difficult to negotiate, consideration of the Annex of
excepted sectors would require time to negotiate and it is
probably not realistic to expect a signature in March in
Washington.
TEFFT