RUSSIA & THE WTO
In the next step of the process, the recommendations of the Appellate Body are presented to the Dispute Settlement Board, which gives the losing member nation a reasonable period of time to bring its laws into conformity. However, the losing country decides how to alter its rules to conform, which if the latest changes to China’s rare earths quotas are any guide, may be an exercise in form over substance. In the case of export duties, the rules
Russia’s Key Commodity Exports Russia is a major commodities producer – including
oil, gas and gasoline, iron and steel, alloyed metals and wheat. The commodity sector is the vital part of economic development and a key challenge for Russia is to turn the export and tax revenues from the sale of these commodities into a broader industrial base, in manufacturing in particular. Trade to and from Russia is forecast to increase at a
have changed already, but in the case of quota restrictions, it is possible that China amends its law so that the restrictions also apply locally (at least nominally), which should allow it to conform with its WTO commitments. There is some wriggle room, in specific circumstances, to be found in GATT, which permits restrictions designed to address the conservation of natural resources or environmental considerations. In the China case, the main stumbling block was the failure of China to treat both the domestic market and the export market with an even hand as required by GATT.
Economic Imperatives Trump Trade Agreements The WTO’s ruling against China could conceivably put pressure
on other resource rich countries, such as Russia, India and the Ukraine, to bring their export regimes in line with international rules – failing which, it may prompt further litigation before the WTO by resource-poor developed economies against the emerging economies. This could, in turn, bring about further erosion of relations between the West and countries such as China and Russia, in turn prompting additional export restrictions ... and rising commodity prices.
rate of above 8% over the next five years – this is a rapid pace of growth and will be driven by companies that can keep up with this rate of internationalisation. At the same time, Russia remains vulnerable to global commodity prices and markets as well as to global demand for energy. It is expected that Russia’s share of world trade will increase marginally to 2.2% by 2025.
embark on an arbitration, because of diplomatic considerations and the prevailing political circumstances both within and outside the EU. The resources of the Commission are also limited, which means only a handful of arbitrations can be undertaken at any one time. In any event, there is not a well-established framework for either sanction or restitution under the WTO dispute settlement procedure, and the WTO, therefore, lacks the ability to impose any direct compensatory measures. In a few cases, however, the WTO has granted suffering countries the right to waive copyrights and patents of the offending member state. The broader issue raised is that
However, it is important to understand that WTO arbitrations
are exceptional measures, which may not result in effective recourse. The WTO dispute settlement procedure is only available to governments and customs unions, and in the EU, the decision to pursue WTO arbitration is determined by the European Commission. It is a major step for the EC to decide to
domestic economic imperatives appear more powerful than international trade agreements between nation states. For example, China can capture more of the value chain by developing its own domestic industry to process rare earths into components. Emerging market nations are starting to flex their growing economic muscles against the old world order of western developed nations - they are beginning to impose what they think the rules of engagement should be. Supra-national bodies, such as the WTO are overseeing a pattern of international agreements that resemble a developed world wish list, rather than a true reflection of a global economy in which power
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