Agro Perspectiva

A minimum of five years will be necessary to observe the first results of the Russian accession to the WTO

19.12.2012 14:51 "Agro Perspectiva" (Kyiv) — It has been 100 days since Russia joined the World Trade Organization. But for now, there has been no clear impact on the Russian economy. Experts call attention to the need to adapt the country to a more competitive environment. But they foresee that a minimum of five years will be necessary to observe the first results of the Russian accession to the WTO, says Voice of Russia. On August 22, 2012, the Russian Federation joined the World Trade Organization (WTO), as its 156th member. This membership put an end to a long accession process, which started in June 1993. Thus, 2012 is a «historic year» for Russia, as declared by Alexei Portansky on December 17 during a press-conference held in Moscow. According to Mr. Portansky, a senior lecturer in the Trade Policy Department at the National Research University Higher School of Economics, Russia can finally have a voice within the WTO and protect its own interests on a world scale. It is a significant change for the country’s economy. However, Mr. Portansky continues, for Vladimir Putin, the WTO is an instrument, «that doesn’t have to be overestimated or underestimated». But it is an instrument without which doing international business is practically impossible — or at least is more difficult. Nevertheless, after about a hundred days of membership, the results of joining the WTO aren’t meaningful. Russia has undergone significant changes since the collapse of the Soviet Union, moving from an isolated centrally-planned economy to a more market-based and globally-integrated economy. Since the 1990s, most of the industry has been privatized, with exceptions for the energy and defense-related sectors. The State is still an important player in the economic sphere, and the country remains dependent on energy. In 2011, Russia became the world’s leading oil producer and is the second-largest producer of natural gas. The entry of Russia into the WTO did not change this general framework. According to Yuri Roslyak, Deputy Chairman of the Federation Council for Economic Policy, the opening of the Russian market to foreign products, linked to the entry into the WTO, is a positive change. But there is a clear need to adapt Russian structures and to define strategic priorities in order to fully benefit from this accession. At a conference held on December 17, Yuri Roslyak mentioned that there are nowadays two main issues concerning Russia’s economy that if examined and worked out, would allow it to take full advantage of its entry into the WTO. First, there is a need to invest in new technologies, to modernize and even reindustrialize the country. At the same time, it is essential to define strong economic priorities and key strategic sectors (agriculture, nuclear, etc.), which should be promoted inside the organization. In fact, in the WTO, the logic is to cooperate and form partnerships based on economic interests. Alexei Portansky stresses that in order to benefit from the WTO, Russian economic players need to be more active within this worldwide structure and develop domestic capabilities. In reference to the necessity of producing more competitive products, he recalled a quote by Christine Lagarde, the Managing Director of the International Monetary Fund, who said that there is no need to join the WTO in order to sell hay… For sure, Russia needs to develop a strong economic diplomacy in order to defend its position and interests on a global scale. Georgy Petrov, Vice-President of the Chamber of Commerce and Industry of Russia, stated that a minimum of five years would be necessary to observe the first results of Russia’s admission into the WTO.