Russia and WTO: Only the strongest will survive

The debates over Russia’s joining the World Trade Organization remain unabated. The near the joining date is coming, the more heated the debates become. The question “to join or not to join” became no longer relevant after President Vladimir Putin’s speech made at the guest session of the Davos economic forum held recently here in Moscow. The president stressed that joining the WTO was a priority task for Russia. It only remains to work out the mechanism of joining WTO and to determine those sectors which may not survive a competition with cheap quality European goods. Metallurgy may prove to be most hurt. By now, it is desperately trying to compete with cheap Ukrainian merchandise. If Ukraine is joined by the USA and other countries, the sector will suffer heavy losses. The way out can be found, if Russia’s metals industry completely switches to internal consumers. In this case, it may not worry about competition from other countries. A recent agreement between Russia’s metallurgists and automobile manufacturers may serve as an example of such a solution. In late October, the Severstal metals company and the GAZ motor company signed a programme of cooperation for the period of 2001-2002. According to the documents signed, the sides agreed to increase shipments of Severstal’s rolled metal to GAZ in 2002. Severstal also decided to build its consignment warehouse on GAZ’s territory which will enable the plant to save its working capital. Such a cooperation is favourable both for metallurgists and automobile manufacturers. The former have a stable demand on their produce, while the latter has quality steel and desirable instalments. This will make it possible to lower prices and increase production.

Dmitri Litvinovich PRAVDA.Ru

Read the original in Russian: http://www.pravda.ru/main/2001/11/02/33372.html