Russia enters WTO to applause

Russia, the world’s sixth largest economy, has joined the World Trade Organization.

Russia applied for membership in the WTO in 1993. Earlier in 2011, President Medvedev expressed hope that Russia would be granted membership in the WTO before the end of the year. As a result, all the agreements to this effect were signed at a WTO ministerial conference in Geneva two weeks before the end of the year.

On December 16th, Russia’s Economic Development Minister Elvira Nabiullina and the WTO’s Director-General Pascal Lamy signed a large package of agreements on Russia’s accession to the WTO. The one-thousand-page document contains reports covering a period starting from the first meeting of the working group on Russia’s accession to the WTO on July 19th, 1995 to its last session held on November 10th, 2011. Now that the agreements have been signed, Russia has 220 days to complete the ratification procedures. It will become a fully fledged member of the WTO 30 days after ratifying the agreements, i.e. by July 2012. Economic Development Minister Elvira Nabiullina comments.

 

"Given the current economic crisis, Russia is joining the WTO with a clear intention to counteract protectionism. For Russia, the end of WTO talks marks the beginning of work to preserve the existing trade regulations and the need to work out the new principles of trading which would meet the present-day challenges and the requirements of global development. Russia shares the WTO’s agenda aimed at assisting the world’s most vulnerable economies."

 

Russia entered the WTO to a standing applause. All those present stood up and applauded after the Nigerian trade minister who chaired the 8th Ministerial Conference of the WTO put the protocol on Russia’s accession to vote and announced the conference’s approval of the Russia accession package.

 

Russia’s accession to the WTO is taking place amid integration trends taking place on the post-Soviet space with Moscow being one of the top players. The Customs Union of Russia, Belarus and Kazakhstan, originally set up on the basis of WTO principles, provides the 153-member Organization with a market of 165 million people. The WTO’s Director-General Pascal Lamy said that with Russia in, the Organization will control 97 percent of global trade. As he welcomed Russia to the WTO, Lamy made it clear that the WTO is like one big family and that members of this family should abide by its rules. Russia’s Deputy Prime Minister Igor Shuvalov read out a message from President Medvedev.

 

"One of the present-day priorities is to prevent the spread of regional crises, take more steps to liberalize the economy on the basis of clear-cut rules and regulations, develop an efficient and fair trade system and strengthen multilateral international institutions. The vast potential of the WTO should contribute to global economic stability, and Russia is prepared to do its best working in this direction."

 

As the WTO talks went on, Russia brought its legislation in conformity with the global standards. The country’s Customs Code and the law on the state regulation of foreign trade were adopted on the basis of WTO principles and have been in effect for about 8 years.  All in all, more than 300 laws were amended to meet the WTO standards.

 

WTO negotiators called for harmonizing Russian energy prices with the foreign ones. Russian chief negotiator Maxim Medvedkov explained how domestic prices would be formed as he met with a Voice of Russia correspondent.

 

"Russia will regulate price formation as it chooses. Rumors that Russia will be forced to raise gas prices or change its domestic regulations have nothing to do with reality. Moscow has never given commitments to this effect and won’t do so in future."

 

The decision to open its domestic market for foreign commodities and therefore, for tough competition, was largely a political one. By making a choice between protectionism and liberalization in favor of the latter Moscow hopes to attract more investors.

 

"Not all the countries benefit from a membership in the WTO. China, for example, gained a lot as the volume of foreign investments in the Chinese economy went up several times shortly after the country joined the Organization. At the same time, small countries gained little from joining it. Given the growing investor interest in the Russian market and the rapidly growing Russian economy, Russia can expect an increase in investments and profitability. The Russian economy will then follow the principles of the WTO."

 

Russia is to cut customs duties on imported goods in several stages within the next eight years, depending on the industry concerned. Russian consumers will be able to feel the advantages of it in 3-4 years. Russian steel and chemicals exporting companies will profit the most.

 

The WTO's Ministerial Conference convenes once every two years. Obviously, Russia will attend its next session in Geneva in 2013 as a full member.

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