EU welcomes Russia’s accession to WTO
Russia becomes last large economy to agree to global trade rules.
The European Commission has welcomed Russia’s admission today to the World Trade Organization as a “major step” that offers “plenty of business opportunities for both Russian and European companies”.
Karel De Gucht, the European commissioner for trade, said that Russia’s accession – which comes 19 years after it began talks with the global trade body – was “a major step for Russia’s further integration into the world economy”.
Russia, which has a population of 140 million and is a leading exporter of oil and gas, is the 156th country to join the World Trade Organization (WTO) and the last large economy to join the body, which sets trade rules and helps to resolve trade disputes. According to the WTO, Russia’s accession means that 97% of all world trade will now take place between its members.
De Gucht said that he hoped that membership would “help to accelerate the modernisation of the Russian economy”. Modernisation has become the key word in the EU’s relationship with Russia since 2010, when Russia’s accession process entered its final phase and when the EU and Russia launched a ‘partnership for modernisation’.
The European Parliament’s rapporteur on EU-trade relations, Robert Sturdy, a British member of the European Conservatives and Reformist grouping, said last month that “much nervousness remains over how Russia will act in reality” because of a history of “protectionist barriers, knee-jerk reactionary policies, and political sensitivities” in Russia.
De Gucht today also struck a wary note, saying: “I trust that Russia will meet the international trading rules and standards to which it has committed.”
The EU is Russia’s largest market, accounting for 47% of its trade, while Russia is Europe’s third-largest partner.
The European Commission said that it estimates that Russia’s accessions will lower the tariffs that Russia charges EU companies to the value of €2.5 billion per year, and that lower tariffs will boost the EU’s exports to Russia by €3.9bn annually.
The WTO agreed to admit Russia on 16 December, weeks after Georgia became the last country to agree to Russia’s admission. Georgia withdraw its support for Russian membership in 2006 in response to a series of disputes, and reinforced its opposition in 2008, after Russian forces entered Georgia following Georgia’s attack on the breakaway region of South Ossetia. Tbilisi then insisted that it should monitor trade along the borders between Russia and South Ossetia and another breakaway region, Abkhazia, both of which Moscow recognised as independent states after the war in 2008. Under November’s agreement between Moscow and Tbilisi, a Swiss company will monitor trade between the two countries.
The Russian parliament ratified the WTO agreement on 11 July and it was signed by Russian President Vladimir Putin on 21 July, setting in motion a 30-day preparation for accession.
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The Russian government and economists believe that membership of the WTO will be good for Russian consumers and for a range of sectors of the economy, including agriculture, tourism, engineering, metallurgy and petrochemicals. However, Russian sceptics about the deal fear that WTO rules could hurt Russian businesses operating in industries such as finance, car manufacturing and forestry.
The WTO’s rules will not fully apply in the US, where a Cold War-era restriction that links Russian trade access to rules on emigration – the Jackson-Vanik amendment of 1974 – remains in law. The restriction is, however, routinely waived in practice.