RUSSIA & THE WTO
Grain While Russia’s commitments in
the energy sector may limit future, politically motivated, supply disruptions, joining the WTO will not remove the prospect of future grain export bans, such as the one in force in between August 2010 and July 2011. Quantitative export restrictions
are banned under the GATT 1994 rules, but there are limited exceptions that allow countries to justify export bans. For example, the prohibition on export restrictions does not extend to “restrictions temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party.” In recent WTO disputes, this provision has been narrowly interpreted and of course the exceptions cannot be applied in an arbitrary and unjustifiable manner. Russia has further agreed that the
total agricultural support it provides would not exceed $9 billion in 2012 and would be gradually reduced to $4.4 billion by 2018. It is worth noting, however, that in 2009, Russia provided $5 billion in trade subsidies, but this total increased markedly in 2010 and 2011. By 2018, therefore, subsidies will only be brought back just below the level that prevailed in 2009.
Import Tariffs & Bureaucracy The burden on Russia to reduce its
According to the latest World
Bank Doing Business Survey, which measures how conducive a country’s regulatory environment is for starting and operating a local firm, Russia was ranked 120th
out of 183 countries.
import tariffs also does not appear excessive. On average, the final legally binding tariff ceiling for the Russian Federation will be 7.8% compared with a 2011 average of 10% for all products. According to the World Bank’s 2010 analysis, which was based on an average tariff level of 8%, “by the standards of countries that have acceded to the WTO in the last eight years that are not ‘Least Developing Countries,’ Russia appears to have concluded market access negotiations with bound tariffs slightly higher than average, especially in comparison to the other transition countries.” But while countries exporting to Russia can look forward
... it is often the bureaucracy of customs
procedures that is the more onerous aspect of doing business in the Russian market
Also, on Transparency International’s Corruption Perceptions Index, which measures perceived levels of public sector corruption, Russia was ranked 143rd
out of 183 countries. It will be important for Russia
to some reduction in the tariffs, it is often the bureaucracy of customs procedures that is the more onerous aspect of doing business in the Russian market. The accession treaty includes a commitment to improve
transparency in the legislation that applies to trade in goods and services (both import and export) and there is certainly considerable scope for improvement in the Russian business environment.
to implement measures to remove prohibitions and restrictions on import and export procedures, which operate in violation of the WTO provisions. The economic benefits expected
from WTO accession will largely be derived from improvements in the business environment that create better conditions for investment
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