Russia and Wto

After 18 years of talks and negotiations, Russia finally joins the World Trade Organisation. Being the last of the G20 countries to join the trade body, it also stays the biggest economy in the world that has not yet become a full-fledged WTO member. Surviving almost a dead-end veto of Georgia in 2008 after the military conflict in South Ossetia and Abkhazia, Russian's desire to join the organisation was finally backed by the EU members and the United States. Having finally reached an agreement with Georgia in November last year, Russian officials signed the formal agreement with other WTO member countries to initiate the accession procedure.

It is expected that by joining a global trade body of 153 member countries that define actual trade policies and trade rules, Russia will be able to benefit dramatically from its membership in the World Trade Organisation. Some experts believe that the country's economy will be boosted by tens of billions of dollars a year. Still dominated by oil and gas exports, Russian economy represents a highly attractive opportunity for the world's largest exporters - China, Germany, and the United States.

Worth mentioning, the reason why Russia's export profile appears to be rather unexciting partially stems from the fact that, unlike commodities, non-discriminatory access to global markets for non-commodities is usually severely limited by trade barriers. Not being a part of the WTO can simply impede and diminish country's exports. Besides, WTO rules also eliminate barriers on trade of services, including telecommunications, financial and business services, access to which will be extremely beneficial for Russia's development. On top of that, WTO creates a legal framework, along with credible enforcement institutions, for improving foreign trade and investment in member countries. Once signed, the agreement will push politicians and society to stick to the terms of the accession and not to cease the reforms.

To come into force, the accession should be finalised by Russia before 15 June 2012 after the Parliament completes formal ratification procedure. Subsequently, according to the World Bank experts, in three upcoming years Russia will gain yearly 3.3% GDP, roughly $59 billion US, thanks to static benefits of trade openness. After 10 years, because of improved investment climate, this figure is expected to reach 11% GDP. Technically, the agreement establishes a reduction of average import duty rate from 10.3% to 7.1%; more specifically, rate on agricultural products will be decreased to 11.3% from 15.6% and rate on industrial products - from 9.4% to 6.4%. Over and above that, Russian authorities estimated that boosted economy will create additional 40 000 jobs....