BUCKING THE WTO, RUSSIA BROADENS ECONOMIC MEASURES AGAINST GEORGIA AND MOLDOVA

Russia’s Inspectorate for Consumer Protection (RosPotrebNadzor) has emerged as a proxy implementer of the Russian government’s foreign policy in conflict situations, a development paralleling the Kremlin’s larger-scale moves against foreign energy companies through environmental inspectorates. On November 7, RosPotrebNadzor head Gennady Onishchenko announced that Russia will be making arrangements directly with Transnistria and Abkhazia to import wine and other alcoholic beverages from those two areas, without reference to Moldova or Georgia (Interfax, November 7). The move amounts to de facto recognition of Transnistria and Abkhazia as Russia’s trade partners.

Any decisions on foreign trade, including in these cases, are officially within the Russian government’s competence. By using the consumer authority as proxy, the government and, in the final analysis, the Kremlin (who undoubtedly authorized such a move) reckon to evade responsibility for such a breach of the rules of international trade, even as the negotiations on Russia’s possible admission to the World Trade Organization are entering the end-game phase.

It was also RosPotrebNadzor that banned the import of all wines from Moldova and Georgia in March of this year, with the never-substantiated claim that they endangered public health in Russia. That ban came in parallel with the Phyto-Sanitary Inspectorate’s (RosSelkhozNadzor) ban on the import of fruit and vegetable produce to Russia from traditional suppliers Moldova and Georgia. These bans amount to unilateral sanctions or embargoes by WTO candidate Russia against the two WTO member countries. WTO’s rules prohibit such measures against the organization’s member countries. In fact, these are coordinated political moves aiming to damage the economies of two pro-Western countries that Moscow regards as disobedient.

Prior to the wine ban, Moldova and Georgia accounted for an aggregate share of almost two-thirds of Russia’s total wine imports, slightly down at 61% in the last pre-ban year, 2005. Transnistria and Abkhazia can only fill a minuscule portion of that huge, now-vacant market share. This fact underscores the political nature of opening Russia’s market to the unrecognized enclaves while closing it to the recognized states and traditional specialized partners.

What Onishchenko in his announcement termed “negotiations” are under way by RosPotrebNadzor officials with representatives of Transnistria and Abkhazia. In Sukhumi, “prime minister” Alexander Ankvab is expressing delight over this development, but he also worries that Abkhazia simply does not produce enough wine of its own to sustain any exports to speak of to Russia. He is proposing what looks like a hare-brained scheme to import “wine raw materials” from various East European and West European countries for processing into wine in Abkhazia and subsequent exporting to Russia (Interfax, November 9).

Transnistria is home to two major wineries, Moldovan Bouquet and Kvint Brandy. The latter was privatized this year by Transnistria’s main shadow-economy network, Sheriff, whose political exponent, Yevgeny Shevchuk, chairs the Supreme Soviet. In order to take advantage of Russia’s offer, the two wineries would have to reject their registration with the Moldovan authorities. Such registration by Transnistrian enterprises is a major goal not only of Moldova but also of European Union policy there. However, registration with Moldova would place Transnistria’s wineries and other agricultural exporters under the ban in Russia (Interfax, November 9).

The immediate reactions from Tbilisi and Chisinau differ considerably in tone and content. Georgia’s Ministry of Foreign Affairs issued a statement noting, “However strange it may seem, Russia’s chief public health officer has become one of the main figures implementing Russia’s economic policy toward Georgia.” Reminding Moscow that any agreement with Abkhaz authorities that bypasses the Georgian government is a breach of international law and trade rules, Georgia’s MFA warns that this move as well as the ban on Georgian products “significantly hampers the prospects of Russia’s accession to the WTO” (Georgian MFA website, November 8). Meanwhile, Georgia is actively promoting its wines on international markets, aiming to match by 2007-2008 on those markets the revenue previously obtained on the Russian market, according to Minister of State for Economic Reforms, Kakha Bendukidze (Kommersant, November 7).

In Moldova the head of the main sanitary inspectorate, Ion Bahnarel, has published an open letter in the local media to his Russian counterpart Onishchenko, expressing his compassion over the recent cases of mass-scale alcohol poisoning across Russia and his hope that Russia would reopen its market to Moldovan wines (Novye izvestiya, November 8). Moldovan authorities and wine-makers seem prey to that forlorn hope, instead of following Georgia’s example of accelerated investments in the wine industry and promotion on international markets.