Russia became a full World Trade Organization member on Aug. 22, a month after the government notified the organization that all the internal procedures on joining were completed.
Taxes and barriers to be lowered
On Wednesday, Aug. 22, new export tax rates came into power, and on Aug. 23 a new single customs tariff that sets up the tariffs for new imported cars comes into effect.
From Aug. 23, Russia will also lower the anti-crisis taxes, introduced on some goods in 2009. New cars’ import duties, for example, will fall from 30 percent to 25 percent. In the next seven years it will fall to 15 percent.
The average import tax in Russia in 2008-2010 was 10.3 percent, but in the transition periods it is set to fall to 7.1 percent. Thus the average tax rate will fall by about 3 percentage points, and about 4.4 percentage points for agricultural goods.
Russia will face changes in 116 sectors (out of 155 sectors in WTO classification). Some sectors allow for harsher measures, like a state monopoly on wholesale of alcohol, for example.
Joining the WTO will not make Russian government give up its regulation of natural monopolies’ pricing.
In agriculture, Russia will be allowed to support the industry with up to $9 billion, twice as much as usually allowed, but it will have to come back to the WTO norm by 2018.
Former finance minister and head of the Civil Initiatives Committee, Alexei Kudrin, said it was a good push for the Russian economy.
“Russia became a full WTO member. It is a great stimulus for the development of the economy and competition,” he tweeted.
Consumers and producers benefit
The consumers could notice a fall in cost of living after Russia joins the WTO as tariffs and barriers will be lowered. Imported goods could become cheaper as could locally-made products that use imported components.
Prices for fish, fruit, nuts, chocolate, flowers, quality wines and spirits, medicine, clothes, jewellery etc could fall.
The first Russian producers to benefit from the WTO will be those who export their products: metals, chemicals, energy, etc, as barriers for Russian products will be lowered on WTO-member states’ markets.
WTO membership opens new possibilities for export for Russian companies, said the head of trade talks department at the Economic Development Ministry, Maxim Medvedkov. “The main plus is the stability of trade, transparency of laws and administrative procedures,” he told Rossiiskaya Gazeta.
U.S. trade unchanged
However, trade between Russia and United States will not be regulated by WTO rules until the U.S. Congress cancels the Jackson-Vanik amendment. The amendment limits trade with countries that do not allow its citizens to emigrate, and was introduces specifically for the U.S.S.R. – the amendment does not comply with WTO trade rules.
WTO was founded in 1995 and is a successor of GATT agreement, signed in 1947. The organisation regulates 97 percent of world trade. Russia was the last major economy to join.