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WSJ: The Putin Rules

This editorial published today in the Wall Street Journal takes a crack at Putin’s call for a “new architecture” of international financial relations. I continue to strongly support Russia’s accession to the WTO, even if the early indications are showing that the Kremlin culture is averse to rule-based systems.

The Putin Rules Kudos to Pascal Lamy for being less than diplomatic in his response to Russian President Vladimir Putin’s criticism of the World Trade Organization — and for suggesting the real reason Moscow is at loggerheads with it. Last weekend Mr. Putin blasted the WTO, which Mr. Lamy heads, and similar institutions for being “archaic, nondemocratic and unwieldy.” The world, he said, would benefit from a new order centered on emerging economies like his own. On Wednesday Mr. Lamy retorted that, during a meeting shortly after this outburst, the Kremlin leader “didn’t tell me [the WTO] was so old-fashioned, so archaic and so antidemocratic that Russia would withdraw its accession demand.” Bingo. Russia has been trying since 1993 to join the WTO and Mr. Putin has made membership a priority during his presidency, due to end next year. The Kremlin has often voiced frustration at the pace of negotiations, which include a round of bilateral deals with major trading partners that already belong to the WTO and then a multilateral pact with the group as a whole. Over the years Moscow has accused various members of trying to undermine its accession process. Yet the biggest sticking point concerns Russia’s failure to fulfill promises it made in the deals it has already reached. For instance, the European Union wants Russia to end its practice of charging higher railway fees for foreign trains than for domestic ones and implement an agreement struck last November to phase out charges for foreign airlines flying over Siberia. The U.S. says Moscow still needs to strengthen intellectual-property rights and open its market to American beef as agreed in its bilateral deal. In other words, the ball is very much in Russia’s court here. Mr. Putin has insisted repeatedly that the WTO should not ask Russia to join on “nonstandard conditions.” Asking Moscow to make good on its word seems standard enough. As for Mr. Putin’s point about the importance of emerging economies, perhaps he’s forgotten that Brazil and India already are WTO members and are key players in the Doha talks on freeing up trade. The WTO counts a growing number of developing countries among its 150 members and provides the best forum for them to level the playing field with the rich world. Then again, Mr. Putin is used to making his own rules these days, from pushing Europe around on energy to telling Washington how to run its missile-defense program. The WTO’s rules apply equally to everyone. Maybe that’s what he finds so “archaic.”