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.
The
ITC-WTO team was represented by Mr Rajesh Aggarwal (Chief, Business & Trade
Policy section, ITC), Ms Famke Schaap (Consultant, Business & Trade Policy
section, ITC), Mrs Elena Boutrimova (Chief, Office for Eastern Europe and
Central Asia, ITC) and Mrs Gretchen Stanton (Senior Counselor, Agriculture and
Commodities Division, WTO).