Georgia fighting hurts Russia's WTO bid

By Jonathan Lynn - Analysis

GENEVA (Reuters) - Russia's struggle to join the World Trade Organisation, already blocked by Georgia because of Moscow's support for the country's separatist regions, has been made even harder by this week's fighting in the Caucasus.

Russia's defeat of Georgian forces who tried to retake the breakaway region of South Ossetia, and its backing of rebels who pushed Georgian troops out of Abkhazia, makes it even less likely Georgia will lift its opposition to Russian membership in the world trading body.

In practice, Russia's WTO accession depends on negotiating a number of outstanding commercial issues, such as export duties on timber, farm subsidies, and the role of state-controlled enterprises such as gas producer Gazprom.

U.S. Commerce Secretary Carlos Gutierrez said on Tuesday Russia still had some work to do before it was ready to join the WTO, and played down any connection between its military action in Georgia and its 15-year-old membership bid.

But President George W. Bush said the fighting was hurting Russia's efforts to join modern global economic and security institutions.

"Now Russia is putting its aspirations at risk by taking actions in Georgia that are inconsistent with the principles of those institutions," he told reporters at the White House.

The history of trade down the centuries has been a tale of alternating commerce and conflict, and WTO rules give Georgia a weapon to pursue its fight by other means.

Under WTO rules a candidate country must reach agreement with all 153 members, represented by a working party which any existing member can join, as well as agreeing separate bilateral deals with any member that seeks them.