WTO working group puts Russia on track to enter global trade body

Geneva: The World Trade Organisation approved the terms for Russia's accession yesterday, putting Russia firmly on track to join the 153-member trade body after more than 18 years of talks.

Russia's entry would further open up about $1.9 trillion (Dh6.9 trillion) of gross domestic product, or 2.8 per cent of the global economy, while supporters say WTO rules could help increase the flow of investment into the world's biggest energy producer.

Approval from the WTO's working group paves the way for WTO trade ministers to approve Russian entry at a meeting in Geneva on December 15.

"It has been a long journey, but today Russia has taken a big step towards its destination of membership in the WTO," the WTO said in a statement.

"This win-win result will bring Russia more firmly into the global economy and make it a more attractive place to do business," it said.

Russia agreed to cap average import tariffs at 7.8 per cent and at 10.8 per cent for imports of agricultural products, the WTO said.

Russia's accession will be the biggest step in world trade liberalisation since China joined the WTO a decade ago, sealing Moscow's integration into the world economy two decades after the collapse of the Soviet Union.

Uneasy negotiations

"It is gratifying to see that after 18 years of sometimes uneasy negotiations the process of WTO accession is completed today," Maxim Medvedkov, Russia's chief WTO negotiator, said in a statement.

Before it can join the WTO, Russia has to bring its own laws into line with WTO rules and satisfy the 153 existing members that it is committed to enforcing WTO standards within Russia.

Following are selected extracts from a 766-page draft accession document, which was circulated to WTO members on October 26 and obtained by Reuters on Wednesday, spelling out specific commitments by Russia.

Russia plans to join the WTO's voluntary Agreement on Government Procurement and will initiate negotiations for membership within four years of joining the WTO.

The country commits to zero export subsidies on agricultural products. Russia will limit subsidies for specific agricultural products in relation to overall agricultural subsidies in each year until the end of 2017. In the draft text, total product-specific support is limited to 30 per cent of general subsidies, but that figure is in brackets, indicating it is provisional.

Same benefits

Russia will amend rules on aircraft leasing to ensure that foreign-made aircraft can qualify for the same benefits and are as attractive to Russian airlines as Russian-made planes. But it does not plan to join the WTO Agreement on Trade in Civil Aircraft.

Russia will privatise 100 per cent of United Grain Company by 2012. It willl privatise 50 per cent plus one share of Rosagroleasing no sooner than 2013.

Russia will cut maximum customs clearance fee to 30,000 roubles from current 100,000 roubles and simplify procedures. It will eliminate preferential tariffs for carmakers making large investments in Russian-based production by July 1, 2018.

Railway transportation costs for Russian domestic produce and imports and exports will be equal by July 1, 2013.