GEORGIA FREEZES NEGOTIATIONS WITH RUSSIA ON WTO

C O N F I D E N T I A L TBILISI 000720

SIPDIS

SIPDIS

STATE FOR EUR/CARC AND EEB/TPP/MTA
STATE PASS USTR FOR PAUL BURKHEAD AND CECILIA KLEIN

E.O. 12958: DECL: 04/30/2018
TAGS: ETRD PREL WTO USTR GG RU
SUBJECT: GEORGIA FREEZES NEGOTIATIONS WITH RUSSIA ON WTO
MEMBERSHIP

REF: TBILISI 343

Classified By: Ambassador John F. Tefft, reason 1.4(b) and (d).


1. (C) On April 28 the GOG issued a statement to the members
of the working party on the accession of the Russian
Federation to the World Trade Organization (WTO) wherein it
announced that it is temporarily halting its bilateral
negotiations with Russia until Russia rescinds the
instructions issued by President Putin on April 16 to
"interact" with the de facto regimes in Abkhazia and South
Ossetia, "including organizing cooperation in the trade,
economic, social and techno-scientific fields."


2. (C) Up to now, the Georgians have insisted that only one
issue must be resolved with Russia, that is an agreement on
the application of Georgian law to the presently unauthorized
border crossing points between Abkhazia and South Ossetia.
The Georgians have told us that the Russian side had agreed
in principle to the establishment of Georgian checkpoints
there in a proposal put forth in Geneva in February by the
Russian Ministry of Trade. Although that fact was later
denied by the Russian MFA in a press statement, the Georgians
have showed us the Russian proposal in writing (reftel). Up
to April 16, the Georgian side was working with the Russians
to elaborate that agreement, especially as regards the status
and safety of Georgian officials who might be stationed on
the border.


3. (C) The Georgians now are insisting in their statement
that Russia has an obligation under GATT article X to publish
trade related rules. The Russians have not yet revealed the
actual text of Putin's instructions, providing only a
statement from the Russian MFA that gives the gist of them.
They also contend that special new rules for South Ossetia
and Abkhazia violate WTO obligations to treat all parts of
Georgian customs territory equally. It is difficult to
evaluate to what extent Putin's instructions comply with GATT
article X and XXIV until they are made public. The GOG also
notes that any special treatment of Abkhazia and South
Ossetia, as part of Georgia, will have to be extended to the
United States and other WTO member states, which they say is
of systemic concern to all WTO members.


4. (C) The same day Russia issued a statement by its
delegation to the WTO working party that it does not consider
it necessary to notify the new rules to the WTO and that the
MFA's April 16 statement is sufficient for all purposes. It
expressed its willingness to continue the bilateral
negotiations with the Georgians.


5. (C) Georgia's acting Foreign Minister, Grigol Vashadze,
has approached the Ambassador seeking USG support for its
position in this matter. We suggest that Russia should make
clear the substance of Putin's instructions and any changes
to its trade regime, or any of its policies toward South
Ossetia and Abkhazia, for that matter -- whether or not they
are required to do so by the GATT. The latter point we leave
to WTO experts. The WTO Secretariat has made it clear that
Georgia is within its rights to insist on a resolution of the
border crossing issue, and to withhold its assent to the
accession process moving to the multilateral phase until that
is accomplished. We believe the Georgians' concern that the
vague intentions expressed in the April 16 MFA statement
could seriously complicate its trade relationship with Russia
in general, and the border crossing issue in particular,
merit serious consideration. A temporary halt to the
bilateral negotiations would seem to be reasonable and
justifiable in that light.
TEFFT