Financial Post G7 Record

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Financial Post, Weekly edition, Sat 17 Jun 95, page 15

Keywords: International finance GATT Russia China World Trade Organization

Russia must wait for membership

Bud Jorgensen

Russian President Boris Yeltsin came to Halifax intent on pursuing his goal of joining the club but the G-7 leaders' action on the former Yugoslavia made it clear Russian membership likely is a long-term project.

Yeltsin had hoped Russia's peace efforts in the Balkans would translate into political stature but the leaders issued their joint communique on the Bosnia-Serb dispute before Yeltsin arrived.

A complicating factor for the Russian objective is China, which had no presence here. The Chinese economy may now be larger than Russia's and likely will be bigger after Hong Kong rejoins it in 1997.

The Chinese have expressed no interest in the G-7 but want to join the World Trade Organization.

The communique had a clear message for China's WTO aspirations in a sentence that linked WTO membership with ''meaningful market- access commitments,'' a phrase that was seen as a reference to the restricted Chinese market.

China also would have WTO problems because of Chinese companies ignoring trademarks and copyrights on western technology.

Russia's G-7 goals are related more to political prestige and it has been pursuing economic matters through other channels.

After saying they are encouraged by economic reform, the G-7 leaders said in their statement: ''Continued political reform is also necessary.''

The communique said the G-7 leaders welcomed efforts to deal with Russia's external debt, estimated at about US$90 billion at the end of last year. About 60% is owed to other governments or the International Monetary Fund, about 30% to commercial banks and the balance to private ties.

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Revised: June 3, 1995

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