Russia’s World Trade Organisation entry has been all but guaranteed after the WTO’s Working Party on Russian membership agreed the precise rules and obligations that Russia will have to meet as a member of the global trading body.
The news comes almost immediately after a customs and trade monitoring agreement between Russia and Georgia which had been holding up Russian accession for years.
Only two hurdles now remain between Russia and full WTO membership – the Ministerial Conference, attended by representatives of each member state, must approve Russian accession at its meeting of 15-17 December, and then Russia itself must ratify the decision by 15 June 2012.
Under the terms of the deal Russia will have to make a number of changes. Most notably, it will have to cut import tariffs on a wide range of goods – its 2011 average import tariff ceiling of 10% will be cut by more than a fifth, to a maximum of 7.8% – and eliminate a number of state subsidies. The full terms of the deal can be found in the announcement on the WTO website.
As you would expect, the analysts are all over this news. And, as you’d expect, reaction is mixed. For example, the Wall Street Journal thinks that it will benefit Russia’s economy and – more importantly – increase the rule of law in Russia. Bloomburg, on the other hand, chooses to focus on the negative, noting that although Russian industry will get a boost from WTO membership, it will also annoy everyone else by not playing by the rules.
Global reaction has been pretty positive, though, on the whole. US President Barack Obama told reporters that “Russia’s WTO accession would be yet another important step forward in our reset of relations with Russia, which has been based upon the belief that the United States and Russia share many common interests, even as we disagree on some issues.” His next step will be to recommend that the US Congress repeals the Jackson-Vanik amendment, a Cold War hangover that prevents the US from granting favoured trading nation status to countries that restrict human rights. Whether Congress will do what he asks is another question…
Smaller countries, such as Finland, which is Russia’s third largest export market, have also welcomed the deal.
On a slightly lighter note, the deal will, at a stroke, almost halve the landmass of countries no longer in the WTO – the only holdouts now being countries marked in grey on this map – notably all the Central Asia countries, a few African and Middle Eastern countries and some of the poorer and more troubled parts of Eastern Europe. Oh, and North Korea. Now that’s a club that I’m sure Russia will be happy to be leaving behind.