Russia joins WTO, but analysts warn: don’t expect any miracles
Moscow (AsiaNews)
- After 19 years of waiting, Russia officially has become the 156th member of
the World Trade Organization (WTO). The
historic step, which was welcomed by Brussels and the United States, continues
to be accompanied by the concerns of local producers, fearful of crushing
import taxes, and the warnings of experts, according to who Russia's joining the
WTO will not lead to a boom
comparable to that experienced by neighboring China, a member since 2001.
On
22 August, the Protocol on the accession of the Russian Federation to the
Marrakesh Agreement, the founding document of the WTO came into force. Thus
bringing to an end 19 years of negotiations in which Moscow (an economy
estimated at 1.9 trillion dollars) was practically the only remaining world
power outside the Organization. The
European Commissioner for Trade, Karel De Gucht, said he was sure that
"the accession will facilitate trade and investment, stimulate the
modernization of the Russian economy and will offer enormous opportunities to
both Russian and European companies."
The
entry of Russia into the WTO, according to Bloomberg, will mean first of all a
greater openness to trade on Moscow's part: lower import duty (down from 10 to
7.8%, with tariffs
on foreign cars halved in 2019) and greater competitiveness in export demand,
something that will force a modernization of many sectors that are lagging
behind. Moscow
will in turn enjoy the end of customs duties, which cost its exporters from 1.5
to 2 billion dollars a year. Agricultural
subsidies will be gradually abolished and the protection of intellectual
property and new healthcare measures will be introduced.
If
the car market is seen as the sector to suffer most because of the
competitiveness of foreign banks and telecommunications - according to experts -
it will open to foreign investors, who will be able to enter the capital of a
credit institution to a market share of 50%.
There
will be no effect, however, on the export of oil and gas as energy sources are
not covered by WTO rules.
According
to the World Bank, the World Trade Organization membership will give rise to a short
term economic output for Russia amounting to 49 billion dollars a year of, a
figure expected to rise to 162 billion dollars a year in the long term. Much,
however, will depend on Moscow's willingness to fight some of the historical
wounds of its economy, a crony capitalism where corruption invades every sector
of society and justice is often used for individual purposes. "The
WTO is not a magic wand with which you can improve the climate for investment -
said Ed Conroy of HSBC Global Asset Management - but if you actually create
less restrictive conditions, then automatically you can increase your chances
of growth."
In
any case, analysts are all convinced that Russia will not live the Chinese
miracle. As
noted by Reuters, beyond the different conditions of the world market compared
to 10 years ago, the Russian export is dominated by oil and gas sector
unaffected by tariff barriers, in addition, the model of a manufacturing
intended to 'exports,
such as China, may not work in Russia, where labor has a relatively high cost.
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