Brussels, 10/11/2011 (Agence Europe) - After the formal conclusion of the agreement with Georgia the previous day, the approval of the WTO working group, on 10 November, paves the way for Russia's accession to the WTO.
After the rollercoaster ride through 18 years of negotiations, the last major economy not to be a member of the WTO will finally join the ranks of the organisation which governs world trade. Russia's accession to the WTO was approved by the working group responsible on Thursday 10 November. Set out in a document that has been ready since the launch of negotiations in 1993, Russia's accession has still to be formally approved by the WTO's 153 members at its 8th ministerial conference in Geneva in mid-December. The Russian parliament will have until June 2012 to ratify the agreement and ensure that it comes into force.
A decisive step towards accession was taken on 9 November, with the conclusion of a bilateral agreement with Georgia. This was an agreement which took many long months to negotiate because of the border dispute which prevented the legalisation of customs posts in Abkhazia and South Ossetia, two breakaway Georgian provinces, de facto independent since the Russia-Georgia conflict in August 2008 and recognised as such by Moscow. Under the terms of a compromise brokered by Switzerland, an independent company, which will act as a mediator between Georgian and Russian customs, will provide international monitoring of the movement of goods.
“It has been a long journey, but today Russia has taken a big step towards its destination of membership of the WTO. Russia embraces a series of rules and commitments that are the foundation of an open, transparent and non-discriminatory global trade system”, said WTO head Pascal Lamy, underlining that “this result will bring Russia more firmly into the global economy and make it a more attractive place to do business”. Russian Chief Negotiator at the WTO Maxim Medvedkov hailed an agreement which “will create new opportunities for our traders and investors, and enable us to protect their commercial interests even more effectively than before”. European Trade Commissioner Karel De Gucht said that “this is an important step for Russia's economic development and for the multilateral trading system. I am also very pleased at this achievement because Europe has played a critical role in ensuring this long-standing goal has finally been reached”.
Under the terms of the accession agreement, Russia, accepts a number of commitments to further open up its trade regime and speed up its integration in the world economy. WTO arrangements will all be applied from the date of accession, with the possibility of very few transition periods.
Access to the goods market. Russia has concluded 30 bilateral agreements on access to service markets and 57 on access to goods markets. Its final tariff ceiling will be 7.8%, compared with an average 10% for all its goods in 2011. The average tariff ceiling for agricultural products will be 10.8%, compared with 13.2% as at present, and for manufactured goods 7.3%, compared with 9.5%. Russia has agreed to lower its tariffs on a wide range of goods, including dairy products, cereals, oil-bearing crops, fats and oils, motor vehicles, chemical products, electric machines, timber and paper, and sugar. Tariffs will be consolidated at zero for cotton and information and communication technology (ICT). Final consolidated levels will be applied from the date of accession for more than a third of tariff lines, then for a further quarter three years later. The longest delays will be eight years for poultry, and seven years for motor vehicles, helicopters and civil aircraft. In agriculture, tariff quotas will be applied to beef, pork and poultry.
Access to the services market. Restriction of foreign shareholding to 49% in telecoms will be ended four years after accession. In insurance, foreign firms will be able to establish branch offices in Russia nine years after accession. Foreign banks will be able to establish subsidiaries from the moment of accession, without any limit on foreign capital in individual establishments but foreign shareholding will be restricted to 50% in the whole banking system. Russia has accepted commitments in maritime and road transport services, including goods and passenger. Russia will allow all foreign companies to become involved in wholesale and retail trading from accession.
Export duties will be consolidated for more than 700 tariff lines. Import restrictions deemed unjustified by the WTO will be removed. Inter alia, tariffs for the rail transport of transit goods will be in line with WTO arrangements by 1 July 2013. For goods which contain alcohol, wood or meat, any measure which contravenes WTO arrangements will be removed from the date of accession. Russia will end all its subsidy to industry programmes, limit its domestic agricultural subsidies to $9 billion by 2012 and reduce them to $4.4 billion by 2018, and consolidate its agricultural exports subsidies at zero. Health and plant heath measures will be drafted and applied in Russia in line with the WTO agreement in this area. Except where there is serious risk to animal or human life, Russian veterinary and plant health monitoring units will not be able to suspend imports from any country before affording that county the opportunity to apply corrective measures. Russia has undertaken to fully apply, without transition, the provisions of the TRIPs agreement on intellectual property and intends to adhere to the agreement on public procurement. On energy prices, Russian gas producers and distributors will have to operate on the basis of normal commercial considerations. (EH/transl.rt)