After 18 years of negotiations Russia got the green light to join the World Trade Organization. The last step on this long path was a compromise with Georgia, which didn’t agree to Russia’s accession to the trade club. However, a compromise was achieved. On the anniversary of the Rose Revolution Mikhail Saakashvili declared a success for Georgian diplomacy and awarded the diplomats who participated in negotiations with Russia. According to the president of Georgia, Tbilisi got Moscow’s admission of Georgian interests, as monitoring of cargo will be provided on the borders with Abkhazia and South Ossetia. At the same time, some Russian experts wonder why the raw-material-producing country needs the WTO. Yesterday the head of the press-service of the Russian committee for entrance to the WTO, Alexei Portansky, replied to the questions of sceptics.
According to him, after 18 years of negotiations Russia is entering the Organization on pretty favorable conditions. These conditions are better than those that were offered to Ukraine or China. The WTO has an individual approach to each of the candidates for membership and each country gets the conditions it manages to negotiate.
Portansky said that not a single branch of the industry will suffer from Russia’s entry to the WTO. There will be periods of transition - some 2 or 3 years - but as far as the most sensitive sectors (like car or airplane production) of our market are concerned, these periods will last for 7 years. Right after Russia joins the WTO, 90% of import customs duties will remain unchanged. “We’ve discussed this before, and initially we didn’t plan to change any duties in the period that will come right after our entry to the WTO. Now we’re saying 90%, as the global crisis introduced some changes in previous arrangements. I’ll give you the example of personal cars: if there were no crisis, I would have said that the import customs duty would remain the same, i.e. 25%. But during the crisis we had to protect our market and we raised this tax to 30% (WTO members could not act in this manner, as they are bound by the organization’s regulations). And now we’ll have to lift this additional 5%. But, as you see, there’s no ‘harsh changes’, we only go back to pre-crisis duties. Other duties will be lowered after the transitional periods. The customs duty for basic products of agriculture will not change even then, and we will even have an opportunity to raise this duty,” he said.
Portansky spoke about conditions of accession for China and Ukraine. China was deprived of market economy status for 15 years, since 2002. So its WTO partners don’t have to regard it as a market economy and thus don’t have to take any account of its products’ raw costs and to bother about anti-dumping measures. As far as Ukraine is concerned, it asked the WTO to review its membership conditions, as its agricultural sector is greatly unsatisfied by the existing conditions. “We wish Ukraine good luck, but the task is very hard,” Portansky mentioned.
Russia has much better accession conditions. “Now we can explore new grain markets – today we are one of the world’s three largest grain exporters. A few years ago, when the US introduced protective measures for its metal market, all its suppliers had a chance to protest – all but us, as we were not WTO members. Now we have this right. And we’ll use this right to re-investigate a number of anti-dumping procedures. The sum of pure losses – 2.5 billion a year – will drop very soon,” Portansky concluded.
However, why do some entrepreneurs protest against the WTO accession? Portansky thinks that one of the main reasons is corruption. “The WTO membership isn’t good for corrupt officials and businessmen. I hope that the WTO will help us overcome our ‘traditional’ corruption, as unfortunately we can’t win this battle on our own.” The second reason, according to Portansky, is that all entrepreneurs are against market opening. “But they don’t understand that this is not what will follow our WTO accession. It’s just a myth, a persistent one. And this myth, unfortunately, will live on no matter how many conferences we organize. But life itself will prove it wrong,” Postansky said.
However, why do some entrepreneurs protest the WTO accession? Portansky thinks that one of the main reasons is corruption. “The WTO membership isn’t good for corrupt officials and businessmen. I hope that the WTO will help us overcome our ‘traditional’ corruption, as unfortunately we can’t win this battle on our own.” The second reason, according to Portansky, is that all entrepreneurs are against market opening. “But they don’t understand that this is not what will follow our WTO accession. It’s just a myth, a persistent one. And this myth, unfortunately, will live on no matter how many conferences we’ll organize. But the life itself will prove it wrong,” Postansky said.
