Russia's membership in the World Trade Organization (WTO) will be in focus as Prime Minister Vladimir Putin meets European Union leaders on Thursday, but business leaders and trade officials from the U.S., EU and the WTO think Russia's entry is going to be difficult, the Wall Street Journal has reported.
Chief among Russia's problems are a complex customs union with Kazakhstan and Belarus, steep tariffs, controversies over how to value imported goods, and corruption, according to the WSJ.
In November last year, after nearly a 17-year-long wait, Russia reached a deal with European Union on the WTO entry. We settled all the issues with the EU and now, with account of the U.S. position, Russia doesn't have any barriers towards joining the WTO, first deputy Prime Minister Igor Shuvalov had said then.
Russia first applied for membership in June 1993. However, many of the country's policies were not compliant with WTO regulations and Russia has been on a constant spree of negotiating for the position since then.
Soon after the deal with the EU, China expressed its support for Russia’s bid to become a member of the WTO. China is among the first WTO members to conclude the bilateral negotiations with Russia on market entry. We expect Russia to join the WTO as soon as possible, Jiang Yu, Chinese foreign ministry spokeswoman, said.
Following that, the Ukrainian Prime Minister Yuriy Yekhanurov pledged that if Ukraine wins membership in the World Trade Organization before Russia, Kiev won't do anything to block Moscow's bid.
Although Russia's efforts to join the global trade body have been lukewarm in the past, that has undergone a sea change in recent years, as businesses have realized the importance of more integration with the world economy.
However, several technical issues are still significant enough to derail, or at least delay, Russia's efforts.
Political issues remain. Each one of the WTO's 153 members has a veto. For example, Georgia, which fought a 2008 war with Russia, could block membership, although it has said it won't. Other complications: The U.S. Congress hasn't repealed a 1974 law imposing higher tariffs on Russia for restrictive emigration policies on Jews and Moscow must eliminate fees on foreign airplanes flying over Siberia, the WSJ report says.
Also, business leaders think it will be tall task for Russia to go by the elaborate WTO guidelines once they join. For example, the fact that Russia raised tariffs on a range of factory-made goods after the financial crisis has irritated the EU. Russia sticks to its stance that it will cut the tariffs only after join the trade body.