RUSSIA & THE WTO
The broader issue raised here is that economic imperatives will prove more powerful than international trade
agreements between nation states. Result
may be more litigation/disputes as emerging market nations flex their economic muscles. The lesson for commodity companies is
that they will increasingly be conducting business in countries where governments are more concerned with sustainable
development and/or restricting the flow of exports of natural resources for their own long-term economic interests. This reflects the new balance of power. The existence of supranational bodies and treaties as they exist do little to change that reality.
has shifted towards the emerging markets.
Commodities Companies Beware Increasingly, developed world
companies will be dealing with powerful organisations in countries outside the US/Western sphere of influence and will face a diminishing ability to impose terms on them. The
lesson for commodity companies is that they will increasingly be conducting business in countries where governments are more concerned with sustainable development and/or restricting the flow of exports of natural resources for their long- term economic interests. The importance of the WTO for private companies may therefore be extremely limited. Russia joins the WTO at a time when the focus
of many countries is on domestic policy, in an era of growing resource nationalism and amid concern that the benefits of WTO membership disproportionately favour developed nations. Despite the difficulties and concerns regarding the effectiveness of the WTO dispute settlement process, the accession of Russia, a major world economy and the largest exporter of resources, remains a positive step. The WTO and other supranational bodies have,
so far, helped to protect the global economy from a headlong slide into protectionism – which is clearly a real risk in the wake of the global financial crisis. Russia will have a voice. It remains to be seen how that voice will be expressed. •
John Whittaker is a partner with international commercial law firm Clyde & Co in London.
His primary focus is on international arbitration and litigation disputes arising in commodity trades and commercial disputes.
www.clydeco.com
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