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Saturday, November 25, 2006

Business Week Exposes Neo-Soviet Provocation

Business Week documents how Russia has alienated the entire world and backed itself into a corner. In other words, S.N.A.F.U. Just as in Soviet times, Russia is utterly doomed by its monumental arrogance and insularity from reality.

Ganging Up on Russia

Poland, Lithuania, and Georgia press Moscow to choose: either remain a regional bully or become a good-faith partner with the EU and WTO

Just as Poland and Lithuania are sending a message to Russia on the EU, Georgia is doing the same with the WTO.

It has been a week that the Kremlin probably would prefer to forget.

First, Poland held up a new partnership agreement between Russia and the European Union as Lithuania sent strong signals that it supported Warsaw's efforts. Then, Georgian Prime Minister Zurab Noghaideli reiterated Tbilisi's threat to veto Russia's accession to the World Trade Organization. And if that wasn't enough, Moldovan President Vladimir Voronin and Georgian Foreign Minister Gela Bezhuashvili pledged to cooperate in resolving "frozen conflicts" in the pro-Moscow enclaves of Transdniester, Abkhazia, and South Ossetia.

Vladimir Putin could be forgiven for thinking he is being ganged up on by the neighbors. But truth told, he sure has asked for it.

For the past several years, it has been clear to anybody that cares to pay attention that the world now has to deal with a very different Russia than the chaotic debt-riddled borderline basket case we all became accustomed to in the 1990s.

With a resurgent economy and flush with energy wealth, Moscow very much wants to return to its seat as one of the world's great powers. At the same time, Putin's Kremlin, seething with resentment after a decade of humiliation, appears hell-bent on using its new economic clout to punish those who dared to depart – or are trying to depart – from Russia's orbit.

What they don't appear to understand in Moscow is that these two goals are contradictory.

Take the case of the EU.

Russia very much wants a partnership agreement with Brussels. But at the same time, Putin stubbornly restated Russia's opposition to ratifying the international Energy Charter at an EU meeting last month in Finland. This issue is sure to come up again at next week's EU-Russia summit in Helsinki. The charter would give European companies access to Russia's energy sector and at the same time assure Moscow's equal treatment of all European countries in terms of reliability of supply. After Russia's gas price dispute with Ukraine in January, which disrupted supplies across Europe, many EU countries openly worried about Moscow's using energy as a political weapon.

Poland, which has raised the loudest concerns about Europe's dependence on Russia, insisted that Moscow accept the energy charter before negotiations on a partnership agreement could begin. Additionally, Warsaw is insisting that Russia lift a yearlong ban on Polish food imports that is widely believed to be politically motivated.

While Poland's brinksmanship clearly made some older EU stalwarts nervous, the newer members appear to be cheering Warsaw on. Lithuanian Deputy Foreign Minister Zygimantas Pavilionis said Vilnius coordinates its Russia policy with Poland, whom he called a "strategic partner."

The message from Warsaw and Vilnius was loud and clear: if you want to partner with the EU, you must abide by EU standards of transparency and free market competition and stop using energy as a political tool.

A similar dynamic is at work in Russia's negotiations to join the World Trade Organization.

Georgia, which is threatening a veto, is insisting that Russia drop what it calls politically-motivated bans on its wine, mineral water, and agricultural products. Tbilisi also wants guarantees that Russia will not trade with Abkhazia and South Ossetia, two pro-Moscow separatist regions in Georgia.

In a recent interview with Radio Free Europe, Georgian Prime Minister Noghaideli called the issue of Abkhazia and South Ossetia "a very principled issue for any WTO member," adding that "nobody will allow trade through illegal checkpoints."

Just as Poland and Lithuania are sending a message to Russia on the EU, Noghaideli is doing the same with the WTO: you can either continue to play regional power games by supporting unrecognized regimes on your neighbors' territory or you can join the world's premier trade organization. You cannot do both.

During a visit to St. Petersburg on 16 November, Nino Burjanadze, the speaker of Georgia's parliament, softened Tbilisi's rhetoric slightly, but the overall message remained the same. "Georgia will not hinder the entry of Russia into the WTO if Russia will adhere to the principles of that organization," Burjanadze said.

The reprimands were particularly bitter coming as they did just as Russia was closing in on winning a long-sought endorsement from Washington for its WTO bid.

And the irony is sweet for Moscow's former satellites. They now have the power to deny the Kremlin what it wants most – a seat at the world's elite tables – unless it starts playing by a new set of rules. And at least for the time being, they are willing to wield that power.

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