Russia ratify WTO entry by a slim margin
A long and bumpy road towards membership in the World Trade Organization has come to an end and Russia can no longer flag protectionist measures in global trade. Cross-border business in the Barents Region will benefit.
Tuesday’s vote in the State Duma became just as thrilling as the 18 year long and complicated road towards membership in WTO. With just 238 votes in favor of ratification, the State Duma was nearly split in half on the question. The required minimum was 226 votes of the total 450 seats in the parliament.
The 201 deputies that voted against ratification represented the Liberal-Democratic Party, the Communists and Fair Russia. All United Russia deputies voted in favor of the ratification protocol.
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The goal is to help producers of goods and services, exporters, and importers conduct their business with equally fear national barriers like custom-tax, subsidies and transparency.
Russia was the largest economy outside the WTO. A recent World Bank study says a Russian membership in WTO could lift the country’s economy with as much as 3,3 percent in the short term and up to 11 percent in the long run, Retuers report.
After Tuesday’s ratification, Russia will be a full member after 30 days. Russia would gradually cut average tariffs on import to 7.8 percent from 10 percent. This means that the prohibitively high import duties on second-hand cars must be reduced. Russia introduced the high import duties on used cars to protect the domestic car-makers against cheaper foreign cars.
Most important, the membership is a signal for foreign investors who will get a more favorable climate for doing business in Russia. Also, Russian investors will get better access to the global markets.
Joining WTO is a take-and-give solution for the domestic economy. Economic Development Minister Andrei Belousov said before the vote in the State Duma that cutting import tariffs could result in a 188 billion rubles (€4,66 billion) loss next year and 257 billion rubles (€6,37) in 2014, reports the Moscow Times. At the same time, Belousov says the losses from WTO entry will be mitigated by a trade boost that freer access to global markets would provide.