Script 2. Partial market liberalization

The import of agricultural products in Russia is still increased, but already in a smaller degree (fig. 14.4). The import of meat products will increase by 29 %, import of sugar — on 15 %. As well as in the Script 1, the import of grain will not change. It is expected, that the import under the given script will grow gradually depending on the same gradual reduction of trade barriers on 36 % during the five years' transitive period.

The situation with export is similar — the export grows, but by smaller rates, than in the case of theoretical complete market liberalization (fig. 14.5). It is connected, first of all, to the preservation of counter higher requirements to the domestic export from the importers.

Nevertheless, the volume of agricultural production is still decreasing (fig. 14.6).

The fact of recession of manufacture at partial and gradual market liberalization at the WTO accession tells that any attempt to free the access to the domestic market leads to the reduction of own manufacture. It has especially significant effect when the exporter is actively subsidized by the government. At the Script 2 the GDP will decrease on 1 %, the investments will decrease on 0,2 %.

Script 3. Modern situation

Scri pt 3 can be considered as the close to the Scri pt 1, to theoretical model. But the modern stage of the agricultural negotiations shows that the Russian side had defended its trade positions in agriculture and the trade barriers for agricultural products will not change significantly.

Import of agricultural products is reduced under such circumstances (in particular, import of grain). On the other commodity groups import grows unsignificantly (fig. 14.7).

Export also grows (because of the back measures of the countries on protection of their producers) (fig. 14.8).

The manufacture of agricultural products, as well as in the previous scripts, is decreased, but unsignificant (fig. 14.9). The GDP and investments at the Script 3 will stay constant.

So, the WTO accession will be positive for Russian agriculture only if the conditions of the accession are favourable to Russia.

Russia should be allowed by WTO to provide the state support at the level of other countries, for example, USA or EU countries.

In USA the annual state support of agriculture is $20 bin., in Germany — $10 bin.

A similar situation and with the import tariffs.

The import tariffs should provide Russia with the real protection tool for internal agricultural producers from the expansion of import agricultural products.

There is no doubt that Russia will enter WTO, because nobody able to break the global tendencies.

The preparation to the WTO accession today should proceed in a practical way — training of the staff, development of the appropriate normative documents.

We should follow the words of the President of the Russian Federation Vladimir Putin: «WTO is not the absolute evil and not the absolute benefit. It is the tool, and we should learn how to use it».

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14.4 Russia and global integration processes

The place and role of any country in global market depend on many factors. Basic of them are:

1) level and dynamics of national economic development;

2) openness degree of the national economy;

3) character of its participation in the international economic relations;

4) progressiveness and development of foreign economic rela­tions;

5) «flexibility» of the national economy (its possibility to adapt to the conditions of the international market and simultaneously to influence on these conditions in the desirable way);

6) presence of the necessary legislative conditions for the foreign investments;

7) presence of the international (transnational) corporations.

The basis of the integration process develops at a micro-level as mutually advantageous cooperation of the concrete companies, banks, financial and industrial groups, their joint investment projects, creation of the transnational enterprises.

The historical and economic analysis shows, that Russia (USSR) went through five stages in its interaction with global economy. These stages have the following economic features:

Stage 1. 1917-1945. Political and economic isolation. The economic and political situation in Europe at that time was characterized by the several tendencies:

1. The activization of the «national movements» in the Slavic countries started after the First World War.

2. USA, Great Britain and France had strengthened their positions, they have accepted the basic rules of the Agreement on Collective Safety.

3. Revolution in Russia (1917), Civil War (1917-1920), creation of the Soviet Union (1921). The Russian contacts with other foreign countries are minimal. Russia is in isolation.

4. The economic cooperation and development of the foreign trade relations in not the priority for the Soviet government.

5. The power of Soviets is absolute. The Soviets try to create the «country of a new type». The country is «closed», the collectivization and industrialization plus the «military and

communist terror» let to saturate the interior with all the

necessary products and services. 6. Such autonomy became one of the factors of our victory in the

Second World War. Stage 2. 1945—1985. Cooperation with other socialist countries («socialist camp»):

1. Political expansion to the developing countries.

2. After the Second World War USSR has surrounded itself with the countries with the socialist and soviet political regimes (Eastern Europe). It allowed to realize the socialist model of the international trade relations.

3. The opposition with USA and North Atlantic Treaty Organization (NATO). The «Iron Curtain».

4. There was created the Council for Mutual Economic Assistance (CMEA) that has resulted in creation of the system of redistribution of the production and services among participating countries.

5. The new economic system was actually created with the priority of the political principles. It has resulted in decrease of the economic efficiency and competitive advantages, that became one of the reasons of destruction of this system.