WTO is an international institution that is the successor to the General Agreement on Tariffs and Trade (GATT). The last one was signed back in 1947. It was supposed to be temporary and would soon be replaced by a full-fledged organization. However, GATT was the main agreement governing foreign trade for almost 50 years. The USSR wanted to join it, but was not allowed to do so, so the domestic history of interaction with this structure begins only from the moment when Russia joined the WTO. This issue is the subject of today's article. It will also analyze the consequences of the fact that Russia joined the WTO, the pros and cons of this decision. We will consider the process, conditions and goals of joining the World Trade Organization, complex issues for the Russian Federation.
Did Russia join theWTO?
RF is the successor of the USSR. If we are talking about when Russia joined the WTO, then it is important to understand that this institution began to function only in 1995. The new organization began to control a much wider range of issues. The USSR formally applied for observer status during the Uruguay Round in 1986 with a view to further accession to the General Agreement on Tariffs and Trade. However, the US rejected it. The reason was the planned economy of the USSR, which was not compatible with the concept of free trade. The Soviet Union received observer status in 1990. After gaining independence, Russia immediately applied to join the GATT. Soon the General Agreement was transformed into a full-fledged organization. However, the direct entry of the Russian Federation into the GATT/WTO system took almost 20 years. Too many issues needed to be agreed upon.
WTO accession process
Russia as an independent state began joining the World Trade Organization in 1993. Since that time, the comparison of the country's trade and political regime with WTO standards began. Bilateral talks then kicked off with Russia making its initial proposals on the level of support for agriculture and market access. These two issues formed the basis of the negotiations until the ratification of the agreements in 2012. In 2006, within the framework of the Asia-Pacific Forum, Russia and the United States signed a protocol for Russia's accession to the WTO. However, the global financial crisis has begun, and negotiations on the implementation of further stagesmembership in the organization were delayed. The conflict with Georgia over Abkhazia and South Ossetia also played its role. The agreement with this country was the last step on the way to Russia's accession to the WTO. It was signed in 2011 in Switzerland.
Customs Union
When considering the question of when Russia joined the WTO, it is important to understand that since January 2010, the Russian Federation wanted to participate in the accession process as part of the Customs Union. Vladimir Putin made a statement about this at a meeting of the EurAsEC Council in June 2009. The customs union includes, apart from Russia, Belarus and Kazakhstan. It was formed back in October 2007. WTO members can be not only countries, but also integration associations. However, the leadership of the World Trade Organization immediately warned the Russian authorities that such a requirement would significantly delay the process of obtaining membership. As early as October 2009, Russia made a statement about the expediency of resuming bilateral negotiations. Kazakhstan joined the World Trade Organization in 2015, while Belarus is still not a member of this international institution.
When Russia joined the WTO: date, year
The resumption of bilateral negotiations has greatly simplified the process of joining the World Trade Organization for the Russian Federation. By December 2010, all problematic issues were resolved. A corresponding memorandum was signed at the Brussels summit. August 22, 2012 is the date when Russia joined the WTO. The date was marked by the ratification of the Protocol onthe accession of the Russian Federation, signed on December 16, 2011, and the entry into force of the relevant regulatory legal act.
Terms of entry
The procedure for joining the WTO is quite complicated. It consists of several stages and takes at least 5-7 years. First, the state applies for membership. After that, the country's trade and political regime is considered at the level of special working groups. At the second stage, negotiations and consultations take place on the conditions for the applicant's membership in the WTO. Any interested country can join them. First of all, the negotiations concern access to the markets of the state and the timing of the introduction of changes. Conditions of accession are formalized by the following documents:
- Report of the working group. It sets out the entire list of rights and obligations that the country has assumed.
- List of tariff concessions in the commodity area and allowed opportunities for subsidizing the agricultural sector.
- List of specific service obligations.
- List of MFN exemptions.
- Legal arrangements at the bilateral and multilateral level.
- Protocol of accession.
At the last stage, the package of documents is ratified, which was agreed within the framework of special working groups. After that, it becomes part of the national law of the applicant state, and the candidate country becomes a member of the World Trade Organization.
Goals and objectives
When Russia joined the WTO in 2012, it did so as part of its economic development strategy. Today, the state cannot build an effective national economy without being a member of this organization. Russia pursued the following goals in its accession to the WTO:
- Gaining greater access to foreign markets for domestic products through the use of the most favored nation declared by this organization.
- Creating a favorable investment climate by bringing national legislation in line with international standards.
- Increasing the competitiveness of domestic goods.
- Expanding opportunities for Russian entrepreneurs and investors abroad.
- Getting the opportunity to influence the formation of international legislation in the field of trade, taking into account their own national interests.
- Improve the image of the country in the eyes of the world community.
Such lengthy accession negotiations are evidence of a desire to achieve the most favorable membership conditions for Russia.
Tariff changes
One of the main obstacles to Russia's membership in the WTO was the coordination of a policy of access to its market for foreign goods. The weighted average import tariff was reduced. On the contrary, the quota of foreign participation in the insurance sector was increased. After passingtransition period, import duties on household appliances, medicines and medical equipment will be reduced. As part of accession to the WTO, 57 bilateral agreements on access to the domestic goods market and 30 on services were concluded.
Agricultural issues
In addition to discussing tariff concessions, the defense of Russia's agricultural sector played an important role in the talks. RF sought to reduce the number of subsidies to be reduced. Customs duties on agricultural products became 11.275% instead of 15.178%. There was a sharp decline of 10-15% for certain commodity groups. After Russia joined the WTO in the year when the global financial crisis began to subside, the domestic agricultural sector faced much greater competition in the domestic and foreign markets.
Consequences for the Russian Federation
Today, there are many monographs and articles devoted to assessing Russia's accession to the World Trade Organization. Most experts note the positive impact of this process on the country's economy. So in what year did Russia join the WTO? In 2012 What changed? Joining took 18 years of hard work. This process took much longer than expected. Therefore, a positive effect can manifest itself only in the distant future. As most experts predicted, in the short term there are much more losses due to WTO membership than real gains. However, the strategic advantagesare worth some tactical defeats. Thus, joining the WTO is certainly a positive step, without which the further development of the country would be impossible.
Advantages and disadvantages of membership
Since Russia joined the WTO in 2012, legal scholars and economists have not tire of publishing new articles analyzing the prospects and problems associated with this event. We can conditionally distinguish three opinions:
- Neutral. For example, Professor Alexander Portansky believes that accession to the WTO does not bring any benefit or harm.
- Critical. Analyst Alexei Kozlov notes that WTO accession does not give Russia any obvious advantages in the short term. However, this event is beneficial for other members of the organization. Kozlov does not consider long-term prospects for Russia.
- Negative. Yaroslav Lisovik, chief economist at the Russian branch of Deutsche Bank, believes that accession to the WTO could negatively affect the country's economy, especially the manufacturing industry, due to lower import duties.
However, most experts agree that all the benefits for Russia from membership in the World Trade Organization will be manifested only in the long term under the condition of a competent domestic and foreign policy.
