This week the State Duma has ratified the protocol on accession to the WTO. However, the ratification has only been supported by members of the "United Russia" faction. Representatives of all the opposition factions voted against the ratification. Specialists from the Higher School of Economics have researched the pros and cons of accession to the WTO.
Alexander Daniltsev, Director of the Institute of Trade Politics of the Higher School of Economics
It is absolutely wrong to mechanically evaluate certain figures such as customs duties, volume of imports, etc., since economic effects are certainly going to be much more complex, much more diverse. Moreover, the whole system will function in such a way that losses in one sphere, as a rule, could bring advantages to another sphere. For instance, we always forget – and this thought has already been voiced here – that as a rule, in fact, consequences are always estimated only one-sidedly and concern only producers. But we also have consumers. For instance, regarding the machine-building complex. Their commentaries on the conditions of accession are filled with details that indicated that even more favourable import conditions should be created, for instance, of details, in order to develop production. It is the so-called principle of the effective tariff that is at work here. Moreover, we have consumers, domestic households and common citizens, in the end, who can, as has already been said here, use the goods at a lower price. But what does this mean on the other hand? It means that the consumption potential becomes engaged in other sectors. For instance, consumer resources that have been disengaged, for example, for the purchase of a car, can be spent on goods and services that are produced within a country. We always forget that imports do not represent the majority of our economy. If we spread the consumption distribution with the help of released money, which would amount to more than only 1 billion dollars, the situation will be favourable for Russian products. It is one sided. Concerning macro-economic indicators, such analyses have been conducted a number of times. We have also conducted an analysis of sectors, particularly at the stage of tariff negotiations in respect of 28, the so-called "sensitive" sectors. We have purposefully outlined the most problematic sectors and analyzed the distribution of gains and losses for producers and consumers, receiving the result I have talked about. In general, we also conducted analysis at the level of macro-economic indicators. We do not see… First of all, any effect on macro-economic parameters such as GDP is not so significant. If we are talking about the volumetric characteristics of GDP, most probably we will witness a certain increase of GDP. At the same time there is a possibility that joining the WTO could become a factor that will also stave off inflation. I have talked about the general consequences. Now let me talk a little bit more about the processing industry. Another myth is the collapse of Russian machinery manufacturing in connection with the accession to the WTO, in my opinion, because we narrow the machinery manufacturing down to car manufacturing. For some reason, when we talk about machinery manufacturing we always imagine a car, a Lada. But certainly it is not so. I will not go into details regarding the numbers, but if we look carefully at the tariff conditions of joining the WTO – and you can do it on your own, all of them are accessible and have been published… You can have a look at the so-called 84th and 85th groups – the products of machinery manufacturing, including heavy machinery, you will see pre-eminently favourable conditions for Russian producers. They allow us to manoeuvre in the field of tariff regulations, at the bottom as well as at the top, and create more favourable conditions for the import of, for instance, details, as well as rendering sufficient protection of our products. Therefore, one should study each question separately. Another issue is that by joining the WTO we are improving our contractual legal framework by participating in the international division of labour and international economic relations. The mechanisms that nowadays ensure the participation of Russia in international trade were typical and characteristic of the end of the nineteenth – beginning of the twentieth century. Back then, there was international commodity trading. In principle, that system of agreements and contracts and trade regulations in the international contractual legal framework which is in force at the moment in Russia is more appropriate to commodity trading, while the WTO system is more versatile and is more appropriate for the development of modern trade, the trade of manufactured products and components of manufacturing production. Only with the help of such a versatile system, implying unified rules for international trade, can we unite our production and trade, as well as include in the international chain of production our complex manufactured products, including machinery products, and investments. Without that, it would certainly be very difficult. Nevertheless, one of the main arguments is that our producers, particularly agricultural producers and the agricultural complex in general, will suffer from joining the WTO, because the protective measures of domestic producers are not sufficient and because they will lose subsidies, etc.
Nikolay Pankov, Head of the Duma Committee on Agriculture
Competition will help the agricultural complex. Our objectives, the objective of the deputies of the State Duma, in my understanding is to adopt a regulatory framework, which is missing today in the course of development of the WTO measures. It does not mean that tomorrow all our borders will be open, in our understanding, and that certain products will saturate our market. To date the Committee on Agriculture have already prepared 10 bills since January for their adoption by the State Duma. Today we are discussing one of these bills in the first reading. This bill gives agricultural enterprises the right to be exempt from income tax. It concerns 7033 agricultural enterprises. In general, this figure will amount to 15 billion. 15 billion which will be released from the income tax exemption will be invested by producers in their agricultural lands and enterprises.
Today the agricultural complex needs competition. We know about a number of factories that work well and effectively. Certainly, the government cannot solve all the problems of the agricultural complex for a number of reasons, meaning that state funding is not enough. But we can see today that, for each ruble invested by the state, there are from 7-12 rubles invested by business. The state is only obliged to create normal conditions for the agricultural complex and competition. Nowadays, agrarians are already asking that the state does not impose on them what is needed in other industry sectors. Agriculture used to be funded ofrom leftovers. Even the machinery which was supplied to agricultural factories, the K-700 – we say it is a good tractor, it is more than 40 years old – but it was engineered for the military industry and not for the agricultural complex. Today, in a number of ineffective agricultural enterprises, a milk yield of one forage-fed cow amounts to the milk yield of one goat. Today we already have cattle and milk factories which show good results and indicators. Therefore, we see as the main objective in the agricultural complex the provision, as you are rightly saying, of equal rights in the priority spheres by the state. For this purpose, help should be given based on governmental programs. For instance, the Committee on Agriculture will propose allocating 243 billion rubles for agriculture from the state budget. In fact, this is within the allowed framework of 9 billion dollars that are permissible for the WTO members. Therefore, today the agricultural complex has a very different direction. There are very different technologies, seeds, a different fowl farm industry, and there is something to say in respect of agriculture. Today, for the first time in the history of our country, we are exporting 2 million tons of raw sugar. For the first time, with the use of new technologies. Today we transported 22 million tons of grain. Today there is a different aim in the agricultural complex: to train professionals. And in this regard I would like this community to hear the following thought: today the state has in any case to create an agency on the promotion and marketing of our products. We have things to sell, especially in the agricultural complex.
