It took 18 years for Russia to join the World Trade Organization. What are reasons behind this long process of accession to the WTO?
Russia wanted to get into the World Trade Organization. However, the process was complicated by a very unstable political situation in Russia on early stages of the development. Moreover, the entire process of the WTO admission is quite complicated by itself. In case of Russia, these complications were further compounded by domestic political issues. Russia has shown that it is quite reluctant to give up on its ability to deliver the government's support in some sectors. I guess domestic interest compounded by complexity of the process by itself were the main reasons why it took so much time to join the WTO.
What benefits do you see of Russia's accession to the WTO?
First of all, what we see is that the main benefits from the WTO admission process are not from an expansion of trade, but rather from the import of external regulatory framework to Russia. The Russian government will now face some restrictions and limits on its capacity to deliver some government policies. In that respect the actions of the Russian government will become more predictable and more transparent. Businesses will have leverage against the government in the form of the WTO settlement procedures.
On top of that we might see some expansion in trade, liberalization of import duties; I mean reduction of import duties, which are expected in the long term. That will of course benefit the domestic consumer and the economy in general.
However, given that the economy will have quite a considerable transitional period in the admission process, we would not expect any immediate benefits from the process by itself. In any case we do see the whole process very beneficial for the economy in general in the long term.
What we can also see is that Russia has already benefited from this process, because the significant part of this liberalization and improvement in domestic regulation has already been delivered during the negotiating process, especially in cases like property rights protection, intellectual property rights protection and things like that. For example, 10 years ago it would be very hard to find license for IT software in Russia. However, at the moment it is really difficult to find pirated software. I guess this move towards legalization and formalization of the software, music and other markets is one of the examples of potential benefits WTO admission process on Russian economy in general.
What are advantages for other members of WTO?
Russia will eventually further open its domestic market and that is quite significant, since Russia used to be the largest market outside of the WTO. As it is a big economy, I guess easier access to Russia will be beneficial for other producers. On top of that Russian domestic business climate will become more predictable, which could make Russia more attractive destination for Foreign Direct Investment (FDI). That could also benefit for other potential export oriented-countries. Further expansion of Russian foreign trade could potentially benefit other countries by giving greater access to Russia's natural resources, which Russia is exporting.