Will Russia Join the WTO Before Yearend?

It appears that the last barriers to Russia’s accession to the World Trade Organization (WTO) have been removed, and there is every reason to believe that the accession documents will be approved at the 153-member group’s ministerial conference on December 15-17. 

In my view, the willingness of Western nations and Georgia to admit Russia reflects their understanding that they would benefit from Russia being a member and abiding more or less by their rules, and that Russian membership would give the WTO more tools to influence Russia. This, I think, is why this reasonable decision was finally made.

I don’t expect any bombshells here. Russia’s Western partners must soon offer Russia membership, thus confirming that President Dmitry Medvedev’s consistent efforts to gain entry were effective and justified.

The only way the 18-year accession process could collapse is if Russia itself mishandles it: suppose the Russian government decides this could wait and puts forth additional conditions.

In fact, there is reason to believe that they might appear, judging by the controversial statements made by the Russian leadership at last year’s St. Petersburg Economic Forum, where President Dmitry Medvedev said the WTO accession was “around the corner,” while Prime Minister Vladimir Putin added that Russia should only agree to join the organization as part of the three-member Customs Union rather than alone.

If there are more statements like this or more conditions, this would mean that Russia is not too interested in joining the WTO. I think that this move would backfire on Russia politically, as it would show its reluctance to abide by civilized rules, while building an isolated economic structure like the proposed Eurasian Union. This would be a bad start to Vladimir Putin’s new presidential term.

I think there is a 20% chance of this happening, because Putin and his team are known for their support of autarky and reluctance to observe any rules or agreements. However, while not ruling out this development, I believe it is highly likely that the WTO entry talks will be completed successfully.

Russia’s accession to the World Trade Organization will certainly benefit Russian consumers, leading lower the prices for vehicles, home electronics, and some clothing brands. These prices are soaring because of collusion and conspiracy. If they go down, the market will provide stronger competition.

Russian producers won’t benefit as much; competition will become stiffer in the industrial sector, and producers will find it difficult to continue working the way they used to before Russia’s WTO accession. However, notwithstanding this fact, I still believe that supporting domestic producers is counterproductive, because consumer interests should come first. This is an important issue and a wise choice. Russians should not have to breathe poisonous exhaust from Russian made cars just because someone in Togliatti wants to make money.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.