Russia Finally a WTO Member
18 years of talks about membership finally came to its end with a „yes“ verdict on Wednesday, but Russians are not on the same page about what it’d do to the country’s economy.
Along with Belarus and Kazahstan Russia started negotiating on World Trade Organization membership in 1993. 155 members have excluded the world’s night largest, 1.9 trillion dollar economy due to its poor trade laws and practices.
Hitherto Russia had to sign separate trade relation agreements with WTO members to import and export goods. It’s mainly the lack of nondiscriminatory treatment of imports of goods and services and intellectual property rights of foreign holders that had set alarms for other members. Take Russia’s “milk war” against Belarus for example, in 2009 Russia banned Belarusian milk which amid a political dispute happening to this day.
Thoughts on joining go both ways
„The WTO membership gives the opportunity to defend our interests in a civilized and legal way,“ Prime Minister Vladimir Putin has said earlier.
Many fear though, that Russian companies may not be able to compete once its markets are open to all thus causing price rise, inflation and job cuts. Russian Communist Party leader Gennady Zyuganov believes WTO membership could threaten the existence of aircraft manufacturing in Russia, where foreign aircraft already account for 80 percent of the civil aviation fleet.
The WTO is also a threat to small and medium-sized businesses, because “most Russian companies, not to mention small enterprises, are not competitive, even on the domestic market,” and cannot survive “without strong state support,” he adds.
On the other hand, inefficient high-cost producers or low-quality producers are going to see more competition from imported goods and will have to improve the quality of their products..
In joining the WTO, Russia will also commit to accepting WTO dispute settlement procedures. In return, Russia will have a voice in shaping and implementing the international trade regime.
World Trade Organisation was greated in 1995, its main function is to ensure that trade flows as smoothly, predictably and freely as possible. It has 155 members and 29 observers of which most are applying for membership.