June 19, 2013
Welcome to the Club: Russia Joins the WTO
Posted on Sep 25, 2012
By Ivo Mijnssen
He has already acted to allay their fears. Shortly after Russia’s ascension, the government introduced new “recycling taxes” on cars and agricultural machines. These measures will tax imported cars and machines more heavily than Russian models, thus giving the Russian industries a significant advantage on the domestic market. One of the bill’s authors, first deputy chairman of the State Duma’s committee for industry, Vladimir Gutenyov, has acknowledged that the tax’s main purpose is to protect Russian industries against competition from abroad: “The domestic automobile producers will enjoy price preferences that will ensure their survival in the WTO and further development and ease social problems at factories and in regions.”
Some critical observers, like the Echo Moscow radio journalist Mikhail Leontyev, wonder why Russia joined the WTO at all, given the government’s very limited interest in free trade. Leontyev describes the government elite’s attitude as follows: “150 countries are members, and Russia is to stand aside?” Its motivation, then, would lie more in joining the “club” of the world’s economies, rather than a fundamental support for the WTO’s free trade policies.
According to Leontyev, the Russian government aims at pursuing a more “competent protectionism” through its membership.
Putin’s remarks during the recent APEC meeting in Vladivostok seem to support this claim. He spoke out against protectionism in principle but also demanded the creation of clear rules for its application within the WTO framework to avoid trade wars. Considering the WTO’s resistance to reform in the past decade, it is unlikely that Putin’s suggestions will have much of an impact—particularly since they deal with one of the most politically sensitive issues in global trade. Considering Russia’s difficult and politicized ascension process, it is safe to say that the WTO courts dealing with international trade conflicts will not run out of work in the near future.
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