Why is the US interested in Russia's accession to the WTO?

Market Leader informed

According to Michael Froman, who is deputy assistant to the president and deputy national security adviser for international economic affairs, the United States will be promoting the Russian Federation’s accession to the World Trading Organization.

 

Barak Obama also speaks in favor of the process

. In particular, during the recent phone call to Dmitry Medvedev he said that they might consider the bilateral talks on Russia's accession to the WTO to be practically over. During the latest briefing Froman stated that the US was currently holding talks with the EU and the WTO on the matter.

We should remind you that Russia has been trying to join the World Trading Organization since 1993. Basing on the experience of the neighboring countries (Ukraine, Turkmenistan, Kyrgyzstan) it can be said that on average the talks last from 5 to 7 years. The standard procedure of accepting new members takes from 6 to 12 months more. According to Mr. Kudrin, Minister of Finance and Deputy Prime Minister of the Russian Federation, Russia will be ready to start to the procedure of entering the WTO only in 4 months. Consequently, we should expect Russia to join the organization not earlier than in a year.

Lawrence Summers, Director of the White House National Economic Council for President Barack Obama, confirmed the information during one of his latest speeches. According to him, all the necessary talks will last for several months, so Russia will have become a full member of the WTO by the end of 2010. The thorniest question and the obstacle on the way is the Customs Union (CU) of Belarus, Russia and Kazakhstan. According to Mr. Summers, as a result of the talks with the Russian Deputy Prime Minister Igor Shuvalov, they have reached an agreement according to which the Russian Federation will be joining the WTO separately from the other members of the CU.

Maksim Medvedkov, the head of the Ministry for Economic Development and the chief Russian negotiator on the matter, has also confirmed that Russia is currently at the last stage of the talks about the WTO membership. He specifies that the Russian delegation has managed to reach a series of agreements providing the access to the market of products and services, which is 70% of success. Within a couple of months all the agreements will turn into a package of documents, regulating the export-and-import conditions.

The last spectrum of questions is problematic. It is directly connected with the basic requirements that must be fulfilled by any potential or full member of the WTO. The talks themselves were completed in 2008. But in 2010 they had to be started from scratch after Russia entered the Custom Union with Belarus and Kazakhstan. However Mr. Medvedkov assures that these are purely technical issues, which do not affect the principled aspects of the matter. Taking into account the fact that the issues have seriously been dealt with since April, a couple of months will be enough to solve the problem, the official says.

One more dispute is caused by Russia’s meat import policy as the Russian authorities do not intend to simplify the import procedure introduced in 2003-2005. Moreover, it is not perfectly clear what will be the conditions of subsidizing the agricultural sector. There are no agreements on saw-timber export duties. However the Russian Federation has managed to achieve its main goal, which is to preserve the existing duties on energy supply. There is a positive solution to the problem of the temporary embargo on grain exports.

As far as Belarus, Kazakhstan and the other members of the Customs Union (CU) are concerned, they will be joining the WTO apart from Russia, which won’t affect the CU effectiveness, Medvedkov assures. It should be noted that neither Belarus nor Kazakhstan has achieved a breakthrough in the talks.

 

 

 

What are the strong sides of Russia's accession to the WTO?

 

 

According to Masterforex-V Academy analysts, it will bring about the following changes:

·The expansion of ideas and principles of free international trade will be accelerated

·It will stimulate the economic growth not only in some specific countries but in the neighboring ones as well, increasing the turnover both in those countries and the entire world

·Innovations in economic development are impossible without high technology, which is set by the WTO system, stimulating not only the turnover but also the technological progress.

·When a country enters the WTO its “investment attractiveness” increases through implementing numerous legislative reforms and introducing the generally accepted standards of external economic regulation

·The WTO is the ultimate authority when it comes to settling various international commercial disputes. After joining the organization Russia will get rid of the Jackson-Vanik amendment* (1974) which has been restraining Russia’s imports ever since.

·The WTO defends intellectual property rights and deals with the “brain drain”, which is a series of burning problems for Russia.

·After adapting to the WTO standards, the world community is expected to make concessions to Russia in many aspects, including numerous export demands.

As we have already mentioned, the Russian Federation has been striving to join the WTO since 1993. Its GDP exceeds $1.2 trillion, which is the best economic indicator among the 153 members of the organization. Barack Obama and Dmitry Medvedev are ready to discuss Russia’s further steps on the way to join the WTO. The lobby talks a planned to be held at the Asia-Pacific Economic Cooperation (APEC) forum in Japan on Nov 14^th 2010.

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*The Jackson-Vanik amendment was a provision in United States federal law, adopted in 1974, intended to pressure the Soviet Union to allow emigration, especially of refuseniks, Jews, and other religious minorities (Wikipedia)

 

 

 

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