Russia`s WTO membership may not make its commercial policy more predictableНазад
Russia`s WTO membership may not make its commercial policy more predictable
The Valdai Discussion Club
22 November 2010
By Leonid Grigoryev
Russia`s WTO membership may or may not make the country`s commercial policy more predictable and civilized. But to any of its trade partners, Russia`s accession to the World Trade Organization would be welcome news.
Valdaiclub.com interview with Leonid Grigoryev, president of the Institute for Energy and Finance.
Q.: How would you assess Ukraine`s conspicuous absence from the Common Economic Space? What do you think is the motive behind Ukraine`s refusal to join the Customs Union, and how will not being a member likely affect the country`s economy in the medium term?
A.: Ukraine faces constraints on how it can change its trade policy, as it is a member of the World Trade Organization (which the Customs Union`s three member states are not). So, unlike Belarus and Kazakhstan, it cannot, say, lift its tied duties to Russia`s rates, applicable also for the entire Customs Union. And it`s hard to imagine a situation where the Customs Union countries would bring their rates down to Ukraine`s level.
The Customs Union has so far failed to bring any noticeable benefits even to its member nations, so it would make no sense at this point to say that Ukraine is missing out on something. Ukraine is probably just using all that talk about its prospective cooperation (but not accession) with the Customs Union as a bargaining chip in its talks with Russia.
Q.: What kind of role could the Customs Union play in the economic development of the member nations? How would you gauge the union`s potential?
A: It`s still premature to talk about the Customs Union having any special role to play here. But even in theory, it would be hard to picture the Union operating effectively, as its bureaucratic mechanisms are too bulky and the political and economic weight of each of its participants is disproportionate.
Just look at the foreign trade figures cited by the Federal Customs Service: over the first nine months of this year, Russia`s trade with Belarus grew 18% year-on-year and by 75% with Ukraine, while the two countries` shares in Russian exports were 4.4.% and 5.6%, respectively. Kazakhstan accounts for just 2%. The European Union, meanwhile, accounts for more than 50% [of Russia`s exports]. In imports, too, the shares of Belarus, Ukraine and Kazakhstan are far smaller than Europe`s.
Q.: Russia`s accession to the WTO is set for 2011. How is this likely to affect other Customs Union nations?
Every year for the past twenty years, there has been news about Russia`s intention to enter the WTO "next year." If it now finally manages to get in, no drastic changes will follow - and those that may arise are unlikely to have any strong effect on Russia`s economy, even less so on the economies of its fellow Customs Union members.
Those things do not always overlap: Russia`s WTO membership may or may not make the country`s commercial policy more predictable and civilized. But to any of its trade partners, Russia`s accession to the World Trade Organization would be welcome news and also an additional bargaining chip, making it possible to settle trade disputes through the WTO. Incidentally, Russia, too, would get this bargaining chip - for its disputes with Ukraine, for instance, or with Georgia, the ex-Soviet Baltic States and Kyrgyzstan (which all belong to the WTO).
Q.: What are the chances that the Customs Union will expand within the CIS? Are there any boundaries for its potential enlargement?
A.: In theory, the Customs Union could expand to other CIS nations. It may grow to include those countries that rely on Russia for their economic development (such as Tajikistan), provided they are not part of the WTO.
