WTO and Russia: the basic access questions

The World Trade Organization (WTO) was created in 1995. It continued the General Agreement on Tariffs and Trade (GATT), concluded after the Second World War. This system was created to adjust global trade through the mechanism of restraint of the unilateral actions. It worked almost 50 years and proved its effectiveness as a legal basis of multilateral trade relations. In the years after the Second World War there was the exclusive growth of global trade. The annual growth of export was 6 %. The system developed during the series of trade negotiation (rounds). On the first rounds the questions of tariffs reduction were discussed, but later negotiations had captured other areas, such as antidumping and non-tariff measures. The «Uruguayan round» in 1986—1994 has resulted in creation of WTO. This organization has considerably expanded the sphere of GATT, it included the trade of services (GATS) and trade-related aspects of intellectual property right (TRIPS). Thus, the GATT mechanism was advanced and adapted to the present stage of development of international trade.

The main tasks of WTO:

1) liberalization of international trade;

2) maintenance of the validity and predictability of international trade;

3) providing the economic growth and increasing of the economic

wealth of the people. Structure of WTO:

1. Ministerial Conference — top-level decisions.

2. General Council — performance of the current work.

3. Council on trade of goods — supervision over the activity of the specialized committees, control of observance of the WTO principles in the sphere of trade of the goods.

4. Council on trade of services — control of performance of the General Agreement on Trade of Services. In its structure are the Committee on trade in financial services and Working group on professional services.

5. Council on trade-related aspects of intellectual property right — is engaged also in questions of prevention of occurrence of the conflicts connected to international trade by the counterfeit goods.

The negotiation on Russian accession into WTO started in 1995. The negotiation on the conditions of the products access to the market is one of the four elements of conditions for any country to WTO (three others are services, agriculture and so-called «system questions»). The major part of such negotiations is the tariff negotiations on the maximum allowable import rates levels. The country will have the right to use these rates after the WTO accession. The tariff negotiations are conducted on the bilateral basis with all interested countries in WTO.

In 1998, Russia has presented its initial tariff offers to the WTO partners. These offers had the obvious protectionist character and told about the closing of the Russian market, not about opening. Though, formally these offers were not rejected by the partners, were actually considered as unacceptable, and tariff negotiation on their basis was not conducted. Only by the end of 1998 on the basis of various concessions from the Russian side it was possible to get the consent from EU and USA and to enter the real tariff negotiation started in Moscow in February, 1999. So, it was the first stage of tariff negotiation — stage of mutual acquaintance. It was finished in the beginning of 1999.

The second stage is 1999: negotiations were carried only with EU and USA, but very intensively. But there were not the contours of the probable compromise yet. There were the tariff inquiries from a number of other WTO countries (Hungary, Korea, Poland, Switzerland,

Norway, Turkey etc.). But they were obviously directed on essential opening of the market on a number of the products, therefore there were no real negotiations with these countries during this period. So, we can say, that the second stage is the beginning of practical tariff negotiations with EU and USA and expansion of the circle participating in tariff negotiations up to 15 countries.

The third stage started in 2000. The intensity of tariff negotiations has essentially increased. For the first time there were designated the contours of the probable compromise within the framework of negotiations with EU and USA. The active tariff negotiations started with Canada and Japan. The amount of tariff inquiries from the various WTO countries had increased. 38 WTO countries already participated in the negotiations. These countries were the major Russian trade partners. With some of these countries the negotiations were structural enough, and the share of the agreed tariff positions had exceeded 50 %.

The fourth stage (2004-2005), when under the initiative of the Russian side the intensity of the tariff negotiations has increased even more. With the largest WTO countries there were 6 negotiation rounds, including the negotiations in the capitals of these countries, and with others 40 countries — not less than 4 rounds. It allowed to reach the following results:

1) practically all Russian trade partners were involved in real negotiations. It is important, that it was achieved at the given stage, because some WTO countries try to set the maximum tariff requirements directly ahead of the accession, and the joining country has to meet these requirements to achieve the final result and to access WTO;

2) the degree of the positions coordination with the overwhelming majority of the partners has reached 80 %;

3) with some countries the negotiation already were on the final stage with only 3-5 unmatched groups of the products.

The fifth stage — 2006 and present time. Russia has agreed all the positions with all trade partners, including USA and is ready to enter WTO in 2008. At this stage Russia negotiated on the basis of the following principles:

1) there are no terms of the Russian accession to WTO and finish of the tariff negotiation. These negotiations will be completed only with the achievement of all the results, necessary for Russia;

2) at the moment of the Russian accession to WTO any tariff rate will not be lowered. They will stay at the same level, as before accession;

3) in the certain time after accession the tariff rates for the some products can be unsignificantly reduced (3-5 %). These are products in which extended admission on the Russian market the country is interested itself (raw materials, not made in Russia, or semifinished items, progressive process equipment, elements of a furnish or components making Russian products competitive on the global markets), or those products, the reduction of the tariffs on which will not threat Russian producers (for example, ferrous metals products);

4) on each product, on which there can be the tariff reduction, it is obligatory to provide the transitive period of adaptation. Its duration depending on the «sensitivity» of the appropriate Russian products and fiscal factors will vary from 3 till 7 years from the moment of Russian accession to WTO;

5) Russia does not consider the participation in the unessential WTO tariff arrangements as the obligatory preliminary condition of its WTO accession, but by the results of the bilateral negotiation Russia can come closer to the some of these unessential conditions that will not damage the Russian interests or will promote the acceleration of its economic development (tariff harmonization for the chemical goods, Agreement on the information technologies).

The basic advantages of the any country accession to WTO can be presented as the set of three following aspects:

— the increase of the markets openness degree;

— the simplification of the access to the foreign investments;

— the unification of the domestic legislative base in the field of international trade according to the global requirements.