Hi Steemers!
There are so many disputes around Russia entering WTO that I decided to investigate on this issue.
WTO is world trade organization made to simplify and better world trade if to summarize all opinions and definitions.
The process of Russia entering WTO lasted for 17 years and was completed in August, 2012. The Russian delegation had to conduct negations with more than 87 countries regarding goods and services. At last everything was agreed and coordinated.
Russia's benefits
So, what does Russia get as advantage?
Many economists thought that Russia benefits from membership in WTO:
- acceleration of technological modernization;
- active actions from small and medium business:
- better situations with access to the foreign markets;
- increase of competitions on the internal market;
- possibility to influence on formation of global politics in the field of trade and investment;
- decreasing Russia’s import duties and as result improving market access for EU businesses, including providers of services:
- investment conditions will be improved for foreign investments;
- lower prices and increased quality because of competition.
This entire probable works if not sanctions that were implied on Russia recently in according with situation in Ukraine.
But in my opinion some positive effects still take place. And this is connected with Customs Unions first of all. In the frames of statements of WTO the customs fares are decreased on majority of products to be exported to Russia. And that is the main advantage for common people. Fares for computers, software are also decreased and if not the jumping rate of EURO and US Dollar we could have had all these goods by very reasonable prices.
Negative effects of membership in WTO for Russia
Many specialists pointed only negative results but I tried to depict the major ones:
First of all it is decreasing of money coming to our budget because of less customs fares, then, of course, threat to many fields of economy such as automobile industry, agriculture, manufacture of planes and machines for agriculture.
Secondly, decreasing of import fares can lead to bankruptcy of small enterprises producing the same goods that are exported and can result in unemployment.
Thirdly, from the political perspective for major Russian oligarchs access to WTO is not a favorable action. The biggest Russian oligarchs are in oil and gas business, it is the greatest area of power and influence.
Of course, economists can find many other negative effects but it seems that these are the most important.
Banks and WTO
In the field of banking a special package of protection was collaborated. The foreign banks cannot open their benches in the Russian Federation but they can open filial credit organizations. At this the part of foreign capital in joint capital of banking system of Russia cannot be more than 50%.
It is interesting to note than membership in WTO stipulated no sanctions between each other. But..as we know sanctions did take place. So, what further?
Perspectives
Many economists think that it will play positive effect in long-term perspective. But even at the present time Russia export many products to EU and have big benefits out of it. Sanctions, of course, don’t play positive role but still as many economists think European countries lose more than Russia. WTO was formed as trade organizations but politics still influence it. And many people said that Russia is used by WTO as a cheap raw material. May be to some extent, but may be not. It depend how to see this situation.
To sum up the information in different sources, the Russia would potentially have much more to gain from accession to the WTO than it would gain from agreements with CIS members or with the EU.
I cannot but agree with many economists who think that the WTO membership should be very beneficial for Russia. It will positively affect the business investment climate in Russian markets.
There are some industries that will have more benefits than others with Russia’s WTO accession. Those are telecommunications, metallurgy, footwear, garments, electronics, and strong alcoholic beverages.
In my opinion the access to WTO gave Russia in general many positive things. But there are some things that couldn’t be forecast. So, our economists and people who deal with all these think should always have plan “B”.
So, time will show what this membership brings to our country and industries in general.
You have shared very useful information, thank you!:)
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