Russia and the World Trade Organization (WTO)

Résumé du document

Russia is the last economic power which does not belong to the World Trade Organization yet. The former leader of the Soviet Union has stood back from the communist model even if some distinctive features of a planned and centred economy are still noticeable. Indeed, the economic and political transition in the nineties has been a watershed for the country since it has turned progressively to the market economy through moderate waves of privatization, deregulation or else trade liberalization. However, many economists consider that the transition is not finished yet because Russia has not succeeded in opening up its economy to foreign investments and in fostering domestic private initiatives. The successive governments have conserved a predominant influence in the economy since they have maintained control of some strategic sectors notably thanks to a strong commitment in the banking system and the business conduct in general. After a decade of economic difficulties in the nineties, Russia has been a fast-growing economy in the last few years, so much, that it is now considered as one of the most promising developing economies in the years to come with China, India and Brazil (BRICs). According to Goldman Sachs analysis, Russia could even be the sixth largest economy in the world by 2050 ; nonetheless this is only the result of projections assuming progress in long-term conditions for economic growth. Since the dismantling of the communism model in 1992, Russian political leaders have been aware of the extreme difficulties in reforming the economy to create and strengthen the conditions for further growth. Until now, they have not reached all the basic market economy standards so they need to foster the necessary changes in order that Russia may achieve its promising future. Therefore, Russian political leaders have decided to join western economic organizations in order to channel their voice, get involved in worldwide financial flows and take advantage of new trade relations. They applied to join the WTO in 1993 and they hope to join the organization before the end of 2008.

Extraits

[...] However it remains too slow for the international community. Intellectual Property Rights[17] The legislative texts concerning Intellectual Property Rights are considered as satisfying by the working party since Russia is a member of the main convention regulating the protection of IPRs. The heart of the matter regards enforcement because the Russian authorities fail to crack down on pirated goods or internet websites which illegally sell materials protected by copyrights. For US firms only, the prejudice was assessed at around 750 million dollars in 2005. [...]

[...] Although it is difficult to determine whether some reforms have their origin in the normal evolution of the Russian economy or in the negotiating talks to join the WTO, undoubtedly the intensification of these reforms since 2001 has been linked to the willingness to gain membership quickly. Moreover it is important to underline that the negotiations between Russia and the members of the working group countries are dissymmetric since Russia is not in position to dictate its conditions, therefore Russia must concede more than its partners. Let's analyse the different reforms undertaken by Russia during the last few years. [...]

[...] Russia and the World Trade Organization (WTO) Introduction Russia is the last economic power which does not belong to the World Trade Organization yet. The former leader of the Soviet Union has stood back from the communist model even if some distinctive features of a planned and centred economy are still noticeable. Indeed the economic and political transition in the nineties has been a watershed for the country since it has turned progressively to the market economy through moderate waves of privatization, deregulation or else trade liberalization. [...]

[...] A few weeks ago, Dmitri Medvedev declared: are really ready to join the WTO; we are quite capable of completing this process within this year (2008) A lot has been done, and nearly all the solutions have been found”[13]. Despite the optimism of the President of the Russian Federation, there are still some outstanding issues concerning Russia's membership which could delay the accession of the country. Let's have a look at the last reforms that the authorities have to carry out and the matters on which Russia has to agree with the working party. [...]

[...] Consequently the working party expects a significant gesture as the acceleration of the privatization process. Energy[15] The main issue in the energy sector regards the dual system for billing gas which significantly differentiates domestic and export prices. Here is some data to give a clear idea of differences in prices. The working party considers that such differences in prices constitute indirect subsidies to the Russian industry which could amount to of the GDP according to the Organization for Economic Cooperation and Development[16]. [...]