Customs toast

Moldova let Russia into the WTO in exchange for wine and meat

Moldova is ready to sign a protocol on Russia’s accession to the World Trade Organization (WTO) by the end of this year, the country’s Minister of Economy and Trade Igor Dodon said yesterday. In exchange for a signature that is extremely important for it, Moscow is ready to reopen its markets to Moldovan wine and meat and consider the issue of levying VAT on the principle of the country of destination. In turn, Moldova can cancel the special customs regime on the Transnistrian border, introduced on March 3, 2006 and interpreted in Moscow as a blockade of the unrecognized Transnistrian Moldavian Republic. It was this step by Chisinau that led to a ban on the import of Moldovan wine and meat into Russia.

Experts assess this political deal as extremely beneficial for both sides. After Russia managed to sign a WTO protocol with the United States, only the disagreement of Moldova, Georgia and Sri Lanka separates it from the finish line on the path to joining the international trading club. For Chisinau, the deal is no less important. A ban on the supply of wine from Moldova was introduced on March 27 of this year, after the chief sanitary doctor Gennady Onishchenko unexpectedly discovered impurities of heavy metals and pesticides in it. The closure of the Russian market turned out to be an extremely strong blow to the already weak Moldovan economy. At first, Chisinau was cheerful, promising to transfer wine flows to Romania, but this was never done. The ban on the import of Moldovan wines resulted in a 46% decline in wine production for the republic and a general decline in production of 6.7%.

“Russians will be able to celebrate the New Year with a glass of high-quality Moldovan champagne,” Moldovan President Vladimir Voronin rejoiced for his neighbors. However, Moldovan winemakers will no longer be able to completely return the Russian market. The Russian side made sure that the path of wine from Moldova to Russia was as thorny as possible. Rivers of Moldovan wine will flow strictly through “one window”.

“As a first step, we will carry out deliveries on a one-stop-shop basis, through special enterprises, in order to further support these products and prevent counterfeiting,” Russian President Vladimir Putin said following the CIS summit in Minsk on November 28. In addition, Mr. Onishchenko warned, “if previously Moldovan wine occupied 40% of the market, now other companies have already taken its place.” The head of the Union of Wine Exporters of Moldova, Georgiy Kozub, also speaks about the difficult return to the Russian market. According to him, “there is a problem with concluding contracts for 2007, acquiring excise stamps, etc.”

Tbilisi could follow a similar path. Georgian wine and mineral water are also banned in Russia, and Georgian signature on the WTO protocol is also extremely important for Russia. Perhaps the negotiation process has already begun. At least the handshake between Presidents Vladimir Putin and Mikheil Saakashvili, which they exchanged before sitting down at the round table at the CIS summit, is what experts associate with this.

Isolde KOSTNER