Russia does not want to agree to obligations it will not benefit from.
Russia does not see advantages to gain from entering the WTO. Our economy, especially agriculture, is already weighed down by obligations it has accepted in order to join the trade organization. The Russian government said yesterday it was set to discuss a pullout from certain existing agreements with its Western partners. Experts are confident that blocking agreements with Russia will be to the disadvantage of the US, the very country challenging Russia’s WTO bid.
Over the many years of talks on joining the WTO, Russia has undertaken a number of burdensome commitments, Prime Minister Vladimir Putin complained at a Presidium meeting yesterday. “The negotiations process has not yet come to a close, but our economy is already carrying a rather heavy load,” the PM noted. “As it turns out, we are not seeing or feeling any advantages from the membership, and doubt that they even exist.”
Russia has been trying to enter the WTO since 1994. However, to this day, differences remain, specifically, the question of export duties on lumber still stands, as First Deputy PM Igor Shuvalov stated yesterday. Any further talks on Russia’s WTO entry could drag on indefinitely. This became even clearer after a recent statement made by US Commerce Secretary Carlos Gutierrez, who said Russia’s WTO bid was ‘at risk’ due to military operations in South Ossetia.
Nevertheless, the Russian government is not going to abandon its strategic steps towards the WTO, despite the fact that, according to Igor Shuvalov, it intends to refuse being legally bound by agreements that have already been signed. Government sources say this relates mostly to accords pertaining to the interests of agricultural producers. One of the unfortunate contracts for Russia was the one that allowed US meat exporters access to the Russian market. This document imposed quotas for poultry, beef, and pork imports on the Russian market. As RBC Daily was told by Chairman of the Executive Committee of the Russian National Meat Association Sergei Yushin, the accepted level of US poultry imports exceeds the demands of the Russian market and is hindering the development of local producers. According to agreements, the share of US products in the tariff quota stands at 74.4 percent until the end of 2009, while the EU countries’ share is 19.51 percent.
Experts say the government’s decision to block agreements will enable Russia to insist on sticking to its own version of government support for agricultural producers. The Russian Agriculture Ministry earlier set the size of direct subsidies for agriculture at $9bn. However, members of the Cairns group, which includes such agricultural exporting nations as Australia, New Zealand, Brazil, and Argentina, insisted on reducing the amount to $3.7bn, whereas European countries spend $60bn-70bn on the same, and the US $16bn.
Russia’s withdrawal from agreements is said to be to the US’s disadvantage, as it is the biggest importer of poultry. Meanwhile, experts say Russian producers will now be able to work in a more favorable environment, adding that finally the pragmatic approach has prevailed, and Russia realized that it did not pay to endlessly go along with the West’s interests. Economists are convinced that Russia’s entry to the WTO is to a great extent a mere image-motivated step: the Russian economic model is based on exports of raw materials, which are not regulated by WTO standards.
Analytical department of RIA RosBusinessConsulting |
