“Belarus will Play WTO Rules Not Being WTO Member”

Russia will become a full member of the World Trade Organization at late summer, 2012. The country needs only to ratify the protocol on the enrolment in the parliament and a signature of Vladimir Putin.

The project on joining the WTO was not proposed for public discussion and did not considered the protests of socialist and communist parliamentary opposition

Better for a seller

The opinions of profitability of the WTO in Russia remain controversial. The President of Russia’s Sberbank German Gref voiced the predictions of the World Bank that say Russia may receive $162bln revenue (11% GDP) in long term perspective.

The opponents say entering the WTO is going to hit the local manufacturers and all the profit will go to transnational corporations who receive unlimited access to Russia’s giant market. Many local producers will not stand the hit of competition with imported goods.

However, Russia secured some sectors of its economy by withdrawing them from free market. It means the restriction taxes are going to be reduced gradually, becoming the airbag for Russian businesses.

“It is the matter of what is more important for the country: 140 million consumers versus 17 million producers and 3 million officials. I think the answer is obvious,” says the editor-in-chief of Ogonek magazine Vladimir Inozemtsev.

“Russia is choosing between a producer market — the heritage of the USSR — and consumer market, accepted by most developed states.”

Belarusian issue

Belarus also has its interests in Russia’s entering the WTO. Belarus and Kazakhstan ‘fitted’ their legislation to Russian on creating the Customs Union and the Common Economic Space. The most tangible change was introduction of higher car import tax in two countries. Yet, now Russia’s becoming the WTO member. How will it affect Belarus?

“Taxes will change according to those in Russia. We — for some times — will play the WTO rules not being a WTO member. However, Belarus will be unable to use the WTO mechanisms for issue solutions,” says analyst Siarhiej Chaly.

How will the situation change the trade balance in Belarus? “The exports to the EU will remain almost unchanged. The main problem is the possible decrease of exports to Russia and increase of imports from the EU which will come to the Customs Union through Russia,” says Mr. Chaly.

“There are some additional points. If exports through Russian increases, Russia may demand custom taxes increase,” says the expert.

Today Russia receives, 88% of all taxes. Belarus’ and Kazakhstan’s shares are 4.7 and 7.3%

Effect on consumers

Consumers may welcome the WTO with price reduction.

“Russian prices for dairy produce are extremely high due to protectionism. However, if market is open and New Zealand may sell there, the prices will go down.”

The same situation will be noticed in Belarus, but in different segments. Wine, meat, cheese — all these products may become cheaper when Russian joins the WTO.

In between

Belarus will be ‘in between’ until the country enters the WTO itself. The Ministry of Foreign Affairs has limited its comments by noting that “negotiations are underway” and the data on the topic is almost top secret. However, Siarhiej Chaly says that the talks which were ‘frozen’ for a long time started again. Russia was one of the factors for this.

Previously, it was planned that three countries will enter the WTO as a single block or each country itself but simultaneously. However, Belarus due to some political and economic reasons missed the schedule.

How long the transitional period for Belarus is going to be is still lost in mystery. Yet, to enroll the WTO means to change the legislation considerably, to reduce state subsidies to agriculture and industry what can threat the very essence if Belarusian ‘model’.

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