The glass half-full
Russia’s accession to the WTO was arguably the most discussed subject of the final months of last year. It is hard to be original in the blizzard of opinions and views about the consequences of our country’s accession to the WTO. Nevertheless, I am happy with this opportunity to express my point of view on this subject.
Negative assessments of Russia’s accession to the WTO, as a rule, are based in the unpreparedness of Russian industries for the escalation of competition on the Russian market, in connection with the lowering of access barriers to foreign products and services.
It is hard to dispute that, having become a member of the WTO and taken upon itself obligations in regulation of external trade activity, Russia will have to abandon the use of some protectionist measures for domestic producers. In particular, for example, it will be barred from establishing higher rates for import customs fees, than are fixed in the accepted obligations. But this does not completely mean that Russia cannot use no less effective measures for the protection and support of domestic industries on its own initiative. Of course, these are more complicated procedures, they require more detailed development, economic analysis, and – in the case of the establishment of protective measures – public consultations. However, it is hardly inevitable that the higher degree of state administration for observing WTO rules could lead to negative consequences.
The positive assessments for expectations of Russia’s accession to the WTO are related to the higher activity of economic processes, including the growth of external trade turnover, the broadening of export markets for Russian goods, and motivation for the growth of competitiveness of Russian goods and services.
On the bright side
Among these are:
1. Russia’s participation in the development and adoption of international rules of external trade in the framework of the WTO;
2. The realization of the principle of transparency of rules of external trade, which intend, first, that proposed trade rules be published in advance, and second, that any interested party has the right to present his opinion to the state agency in charge of such proposals;
3. The positive influence of generally accepted international rules for internal legislation and its enforcement. I will cite an example, which is highly sensitive for a lot of Russian importers of goods: customs assessment. The rules adopted in Russia are already based on the provisions of the agreement of the adoption of Article VII of the General Agreement on Tariffs and Trade of 1994. However, there are evidently not enough procedural materials, instructions and clarifications for an importer to feel confident in complicated “marginal” situations. There is hope that experience, gathered by the World Customs Organization’s Technical Committee on Customs Valuation, will now be adopted in full measure as much by customs authorities as by judges, reviewing disputes between customs and importers;
4. Several minute changes in customs administration, still highly palpable to participants in external trade. For example, the lowering of levies for customs documentation, and their differentiation depending upon the means of submitting a declaration (on paper or electronically), can lead to reducing expenses on the completion of customs formalities in connection with the import and export of goods;
5. New possibilities for the protection of the interests of Russian exporters on external markets. The rules of the WTO are not just an obligation for Russia to observe several restrictions, but also the right to require more favorable treatment for Russian goods from trading partners. We can talk endlessly about the current raw material orientation of Russian exports, but such a necessary differentiation of exports in the Russian economy in the future is inconceivable without a normal trading regime on the global market.
On the whole, despite the extended procedure of preparation and accession of Russia into the WTO, the preliminary steps bringing Russian legislation into line with the principles, requirements and norms of the WTO agreement, the scrutiny of Russia’s new legal obligations, and the first professional discussions related to their use, allow for the conclusion that the country has encountered a high level of standards of legal and economic regulation. A lot of questions are subject to rethinking: from the competence of national courts to assess the correspondence of legal acts with international obligations, to the realization of the principle of transparency. These are new challenges for the state administration, the activity of economic operators and the professional level of consultants in external trade. I believe these factors are new prospects for development.
A review of customs
On Dec. 19, The Moscow News, in conjunction with Moskovskiye Novosti, Media Business Solutions and general partner Pepeliaev Group, held a conference on customs titled, “Customs and External Economic Activity: Work of the Common Economic Space, the First Results.” Major themes included the results of the fi rst year of work of the Eurasian Economic Commission, the adoption of technology in customs processing – including electronic declarations of incoming goods – and the rationalization of legislation between the three countries of the Common Economic Space, Russia, Kazakhstan and Belarus.
The conference’s sessions were moderated by Pepeliaev Group’s Galina Balandina, partner in customs law and regulation of external trade, and Alexander Kosov, director of the practice of customs law and regulation of external trade. Participants included representatives of the Federal Customs Service, the Eurasian Economic Commission and the Eurasian Economic Community’s court, and the customs stations at Sheremetyevo and Domodedovo airports.
The contributions that follow did not involve reporting by staff of The Moscow News.