Today, Russia is faced with a major decision-to join or not to join the World Trade Organization (WTO). The discussions regarding this are heating up in the country. Will Russia, the world’s most powerful country, take advantage of this and become a member of the largest international economic organization?
In 1993, when Russia had announced that it wished to join the WTO, market economy did not exist in the country, there was no legislative field for solving economic problems, the country lacked international norms and principles and the authorities were doing whatever they pleased. That is why a lot of countries today doubt that Russia will have the chance to fulfill its responsibilities upon becoming a member of the WTO.
What is the advantage of WTO membership? First of all, free trade. But didn’t Russia do that in the middle of the 1990s by getting rid of all quotas and lowering customs bargain prices by 20%? Currently, there are opposite tendencies in the country. The large local producers demand the government to go along with the sponsorship policy. The government has found itself in the middle of two barriers-the WTO and the producer and this makes negotiations more complicated.
The next proof that cooperation between Russia and the WTO is not possible is gas. The problem is that both the U.S. and the European Union want Russia to set gas prices at an equal rate, however, this can cause severe damages to the world’s leading country in gas export.
Agriculture is the next field which makes Russia’s WTO membership even more difficult. A large part of agriculture is owned by the state and the state provides money for different agricultural companies to export their products. In order to become a member of the WTO, the Russian government must be obligated to support agriculture according to the WTO contract and stop giving money.
It is well known that Russia, as well as all former Soviet countries, has not inherited a fiscal market after its independence. Besides that, many services are being available now or have just been recently. That is why Russia’s WTO oppositionists “demand limiting some services for foreigners with the aim to develop the domestic fields of economy. In their opinion, state monopoly is necessary in some fields (it is even mandatory in the communications field).
We must mention the fact that Russia’s WTO membership has a political context to it. Of course, there are many people who agree that free trade of products and services will help the country improve the business environment and see an economic rise (although people in favor of the sponsorship policy believe that the GDP will decrease by 1% if Russia joins the WTO), however, let’s not forget that Russia has advantages for competing with other countries due to its variety of products, for example, oil and gas. It is already clear as to why it is not advantageous for Russia to “be under the influence of someone else.” Taking into consideration the abovementioned, we can’t say that Russia will make a quick decision.
We are talking about Russia, but what about Armenia? Armenia’s economy is growing by two digit numbers, so this means that we had to quickly decide whether to join the WTO or not. This process took a long time and finally, in 2003, Armenia became a member of the WTO. What did we get for it and what are we going to get for it by membership? Why did we say “yes” to the WTO so easily when our “godfather” Russia is still thinking twice?
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