Russia in WTO: pluses and minuses

German Gref, the Minister for Economic Development and Trade, tried to convince the deputies of the Russian parliament today that Russia had to join the World Trade Organization. The major question, which makes everyone worry, both the economists and the domestic businessmen, is to what extent Russia’s home market will be protected from the cheap imports after Russia joins the WTO.

Moscow is first and foremost interested in the protection of such important branches of industry as automobile and aircraft production. It is needless to mention that Russia’s automobile industry may not cope with foreign competition if Russia becomes a WTO member. AvtoVAZ can not compete with Ford. The same situation is expected with Russian aircraft. After Russia's perspectives to join the WTO became favorable, there was a question raised at the European Union pertaining to Russian airliners and western standards.

Therefore, there are problems in this respect, and Russia is trying to obtain the decision that will be acceptable. The government offers to protect several industrial branches with the help of customs duties. Moscow insists on the introduction of the highest level of the duties: 30%, whereas the level is 25% at the moment. Russia has been rather persistent in this respect, and the WTO representatives agreed with the necessity to preserve the import duties. This consent is of a preliminary character so far.

As German Gref said, President Putin does not consider Russia’s incorporation into the WTO as a top priority. Putin believes that Russia should join it on conditions that will be acceptable for Russia. “If we cannot protect our positions, then Russia will not join the WTO,” – Gref said.

However, this is not very likely. Russia is objectively interested in the membership, and there are a lot more pluses than minuses. There are 144 countries in the WTO for the time being, and they cover 96% of the world’s trade. Russia is almost the only industrial country that is not included in this organization. This causes only problems for the Russian economy. As Gref mentioned, there are over 120 anti-dumping procedures in place against Russian companies. As a result, Russia loses up to four billion dollars every year.

Of course, all the problems will not disappear at once if Russia eventually joins the World Trade Organization, and the anti-dumping laws will not vanish either. However, Moscow will at least have an efficient mechanism to stand for its own economic interests; the country will become more attractive in the eyes of potential investors.

Russia can not stay aside from the integration process in the world; it costs too much. It would be perfect to protect the home industry, at least the most perspective branches of it. It is a hard goal to pursue, but it is requisite to do it as soon as possible.

Oleg Artyukov PRAVDA.Ru

Translated by Dmitry Sudakov

On the photo: German Gref - Russia's Minister for Economic Development and Trade