Printer Friendly

RUSSIA - March 28 - Putin's Bid To Join WTO Splits Business Community.

A report in The FT says: "President Vladimir Putin's bid to take his country into the World Trade Organisation as early as next year has split the country's business community... A strong lobby has formed seeking to delay accession to give Russian industry more time to prepare for international competition. [But] the Russian Union of Industrialists and Entrepreneurs... has officially come out in favour of rapid accession. It argues membership would increase foreign investment, trade and growth. Alexey Mordashov, chairman of the union's WTO committee, says 'Russia should join the WTO as fast as possible' as long as the conditions are right. But Mr. Mordashov, who also heads the Severstal steel group, admits that a significant number of his union's members argue that Russia is not yet ready for membership. The sceptics are led by Oleg Deripaska, boss of the Siberian Aluminium and Russian Aluminium groups, who also controls GAZ, the country's second-largest carmaker, and several bus factories. He seems most interested in protecting his vehicle manufacturing interests.

Other industries with strong lobbies include aerospace, furniture-making, financial services, telecommunications and agriculture". The report quotes Konstantin Remchukov, an MP and adviser to Deripaska, as saying the government worries too much about WTO accession as an end in itself and too little about developing an industrial policy. Moscow, which originally applied to join the WTO's predecessor - Gatt - in 1995, accelerated its efforts in 2001. Putin sees membership as a further step towards the integration into the world economy. The head of tariff policy at the Ministry of Economic Development and Trade Andrei Kushnirenko said: "There is no official deadline for accession".

But he added that the matter could be settled at the WTO ministerial meeting in Sept-Oct. 2003. Negotiations will enter a new phase in April, with the presentation draft report listing the market-opening measures that WTO members want Moscow to implement as preconditions for entry. In advance of these talks, the motor industry has persuaded the government to raise duties on older imported second-hand cars, which compete on price with new cars produced domestically. Analysts say this proposed increase in the level of protection could prompt the country's trading partners to demand concessions in other sectors. Among the toughest battles will be over agriculture. The US and EU see Russia as an important export market. But Moscow wants to develop its own farms. It wants the right to subsidise agriculture heavily, as it used to do in Soviet times. That means entry terms allowing annual farm subsidies of up to $13.8 bn even though actual aid in 2001 amounted to less than $1.5 bn. But other analysts say Moscow has set the figure high so it can be negotiated down in exchange for favourable concessions elsewhere.

Moscow officials are also considering maintaining restrictions on foreign companies' access to financial services, especially insurance, on the grounds that these activities are still in their infancy. The accession talks cover general topics such as the harmonisation of domestic standards to world norms. The director of the government-linked WTO information office Alexei Portanski said Moscow is ready to discuss all standard WTO conditions. But he said it is resisting attempts by trade partners to broaden the negotiations to include issues not covered by WTO rules - such as the low energy prices. The FT report says: "The sceptics say the government is not ready to make WTO-related decisions... Last week's decision on car tariffs may indicate that the government is more willing than before to consider the possible disadvantages of accession. Another sign is the recent appointment as an adviser to Mikhail Kasyanov, the prime minister, of Mikhail Delyagin, a leading conservative economist. He got the job shortly after saying it would be a 'huge mistake' for Russia to join the WTO in 2003".
COPYRIGHT 2002 Input Solutions
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2002, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:World Trade Organization
Publication:APS Diplomat Recorder
Article Type:Brief Article
Geographic Code:4EXRU
Date:Mar 30, 2002
Previous Article:IRAQ - March 27 - Sabri Offers Kuwait To Forge Normal Ties.
Next Article:TURKEY - March 25 - Turkish Airlines Announces Profit For 2001.

Related Articles
RUSSIA - Oct. 3 - Moscow May Rethink NATO Growth.
The remaking of a superpower. (Capitol Ideas).
Moscow-Beijing terror axis: Russia and China are now abandoning the Cold War-era ruse of a "Sino-Soviet split," and cooperate openly on many...
RUSSIA - April 18 - Putin Addresses Duma.
Stepping stones to convergence: the recent arms-reduction treaty with Russia and Russia's entry into NATO are two more steps on the road to the new...
Can Moscow and markets finally mix? (Capitol Ideas).
RUSSIA - May 20 - Moscow Rules Out WTO Membership In 2003.
Russian and Polish relations: a new era.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters