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  • Roadblocks on Russia Path to WTO

    MOSCOW – In conjunction with the St Petersburg Economic International Forum, speculations over Russia’s accession to WTO have picked up steam. On the sidelines of the Forum, Economic Development Minister Elvira Nabiullina said Moscow stands a good chance of joining WTO by year end. The negotiations with the European Union seemed to help settle some problems over export tariffs imposed by Russia on raw timber and technical barriers to foreign trade. United States Trade Representative Ronald Kirk, following his talks with Russian Deputy Prime Minister Igor Shuvalov and Nabiullina, announced America would not impede Russia’s bid to join the WTO.

    Are things really looking up? Everything is not that simple. The Russian government is discussing a tariff policy that suggests harsh protectionist measures as a way to combat the crisis. Hiking export duties on ready-made goods to prohibitive levels and imposing non-tariff limitations in trade are just two examples.

    Rising tension between Russia and Belarus also is undermining a WTO bid. Last week Moscow banned imports of Belarus’ dairy products, claiming they did not meet Russian technical requirements. This non-tariff measure will cost Belarus $1 billion. This precedent will likely give Europe ample cause for concern.

    Russia’s Western partners are also worried that such an openly protectionist policy will reduce access to foreign investors. Anatoly Chubais, a prominent Russian politician and head of the government-owned Russian Corporation of Nanotechnologies is skeptical about Russia’s prospects to join WTO before the year is out. “We have been hearing the words that we’ll manage to finalize the talks in the current year, since 2002.” – said Chubais. According to Chubais, Russia could deem it expedient to find a WTO alternative, and it looks like such a possibility has been taking shape lately in the form of a customs union among Russia, Belarus and Kazakhstan.

    Clearly, such a union will fail to help Russia’s access to global markets and only exacerbate its isolation. However, the mere fact that such attitudes exist among Russia’s elite testifies to both its profound disenchantment with the WTO effectiveness and a serious consolidation of protectionist trends in Russia’s foreign trade policies.

    Posted in International [slideshow_deploy]

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