WTO Accession of Russia: stakeholders engage in public-private dialogue in Cheboksary, Chuvash Republic

Russia is the last country in the top ten biggest economies that is still to join the WTO and negotiations have been underway since the country applied for membership in 1993.  

During the conference, a strong interest was expressed by all stakeholders - businesses, academia and public sector representatives - to gain insights into the possible business implications of Russia’s accession to the WTO. Chairman of the State Duma Committee for Foreign Affairs, Mr Konstantin Kosachev, said Russia’s main goals were ‘better export conditions, cheaper imports, and better protection of domestic manufacturers.’ He also added a sense of urgency to concluding Russia’s accession process sooner rather than later. 

Local speakers, including the President of the Chamber of Commerce and Industry of the Chuvash Republic, Mr Kustarin, emphasized thatthe costs of remaining outside the multilateral trading system would be much higher, and that becoming a member of WTO is ‘common sense’ for Russia.  

Equally, participants expressed concerns and questioned if Chuvash companies are ready to deal with the challenges of WTO accession. Insecurity remained over final tariff reductions in the Republics export/import sectors, mainly Industrial Goods (transportation vehicles, electrical equipment, chemical and rubber products), and answers were sought as to what extent tariffs would be lowered, as well as how Russia’s business environment would change as a result of this process.  

Highlighting the lessons learnt from completed processes of WTO Accession, including China and Ukraine, the ITC-WTO team was able to take away some concerns. 

First of all, as a major benefit, the ITC-WTO team emphasized that through WTO Accession, Russian exporters and importers will benefit from secured market access in their export markets through a permanent and unconditional Most Favoured Nation (MFN) status, and a neutral platform for resolution of trade disputes. In addition, new rounds of market access improvements, such as the Doha Development Round (DDA), will automatically benefit all members. 

Secondly, in response to concerns expressed over increased competition – and even ‘flooding’ of domestic markets with foreign goods and services’ – as a result of tariff negotiations, some clarifications were made. It was discussed how as Russia’s average applied tariffs are already at a relatively low level (10.1% in Non-agricultural goods), the lowering of customs duties will expectedly not be as substantial as feared, although existing tariff peaks and escalations would be requested to be addressed by WTO members. Improved access - for foreign suppliers to Russia’s domestic markets or for Russia’s exporters to foreign markets - will therefore not likely be the main source of gains or losses. Participants acknowledged, however, that enhanced competition at domestic markets will serve as an incentive for Russian businesses to work towards improved quality and over-all competitiveness of their products and services. 

Thirdly, as underlined by the ITC-WTO team and shared by local speakers, the major benefits for Russia’s companies are to be expected from anchoring domestic reforms as a result of WTO Accession, ensuring predictability, transparency, and based on the rule of law. The ITC-WTO team brought out the practices from recently acceded countries, showing how domestic reforms (unilateral or as result of WTO Accession), including in the field of customs practices, domestic regulations on investment protection, intellectual property, privatization of state enterprises, have led to major improvement in business environments, much to the benefit of individual companies.  

Specific attention was paid to the importance of non-tariff measures as growing obstacles to trade, with a special session on those NTM’s that are justified by WTO to protect health of human, plant and animals (Sanitary and Phytosanitary Measures/SPS). Much appreciation was expressed by participants, visibly acknowledging WTO’s SPS regulations as a challenge with regard to implementation, but equally as an opportunity to raise the quality-level of products produced in the Chuvash Republic.  

The conference also provided much sought after information from public authorities to private companies about the status of Russia’s Accession negotiations and specific challenges for the Chuvash Republic. Through presentations from a diverse set of perspectives and considerations, participants equally enhanced their appreciation of their Government’s negotiation process and the role of the WTO in governing global trade relations.  

As such, this public-private dialogue contributed to the confidence needed for local businesses to strategize and undertake the necessary steps to deal with challenges that may occur as a result of Russia’s entering into WTO.  

Whilst Geneva and Moscow-based trade officials work to conclude Russia’s accession process, businesses in each of Russia’s regions are hoping to reap the benefits from an improved trading environment and secured trading relations.