The WTO and Russia

Will Russia enter the WTO after 18 years of negotiations?

Russia is the only economy that is not a member of the World Trade Organization (WTO). Russia is a member of the Group of Eight, Group of Twenty and various regional agreements; it is also a permanent member of the Security Council of the United Nations, with a corresponding power of veto, but not a member of the WTO.

The negotiations concerning the Russia’s entrance to the organism carry almost 18 years, when the entrance process generally takes about seven years. The Group of Work of the WTO about Russia’s Accession was established in 1993, and the latest revision of the report of the group took place in 2004.

In these years the negotiations have made progress and setbacks. At times urging the developed world such entry and other opposed. In the past year both the U.S. and Europe, including German Chancellor Angela Merkel, have strongly support the entry of Russia, President Dmitry Medvedev seems to move in the same direction.

After a conversation that President Medvedev held on this issue with U.S. President Barack Obama, the Kremlin released the following statement:

“It is pleasant to admit that the impulses initiated mutually have contributed to significant progress in the talks.” “In this regard we emphasize that the priority issue resolved it is perceived as possible the accession of Russia to the WTO by the end of the year.”

But a few weeks ago Prime Minister Vladimir Putin said “Russia will not abandon the new rules for foreign auto companies in pursuit of its accession to the WTO.”

We will continue the difficult dialogue with the European Commission and our U.S. partners about the WTO accession. They insist that we cancel the requirement that foreign companies produce at least 300,000 cars per year and that 60% of the components produced locally.” Putin said.

We have already said that our position is immovable. No changes allowed. This is a red line that we cannot cross, because we cannot go against the interests of our producers.

Western and Russian analysts argue that this could indicate that there are discrepancies between the two leaders (President Medvedev and Prime Minister Putin), while others argue that both hope that Russia enters the WTO, but without changing the rules that protect certain sectors of the Russian economy.

Weighing the advantages and disadvantages that would have for some and for others, Russia’s accession to the WTO, there are those who argue that, since the United States and Europe are passing through huge gales, and the Doha Round seems so stagnant as in 2007, the West would benefit more than Russia, and with this in mind, Russia has a chance to win the tug of war on the maintenance of internal rules and just enter the WTO, or simply to delay talks on a brighter future.