Tuesday, April 3, 2012

Anti-WTO sentiment in Russia - How serious?

Russia formally acceded to the WTO in December. I have blogged about it here, here and here.The accession needs to be ratified by Russia domestically. While there is general consensus about a large trading partner such as Russia being part of the multilateral system, murmurs of protect internally against the accession have cropped up. This piece about an Action Group against WTO formed in Russia makes interesting reading.

However, some experts say that joining the organization will lead to a partial loss of the country’s sovereignty and a weakening of its economy.
[Maxim Kalashnikov, Russian Blogger]: 
"Joining the WTO is a deep political issue. It will compromise the sovereignty of our country. This is a rejection of freedom in times of acute international crisis, when in need of national revival and re-industrialization."
In order to fulfil the basic requirements of the WTO, Russia will be reducing taxes on imported and exported goods, which will lead to an increase of foreign goods in the market. 
Experts say it could lead to a drop in domestic production and in the country’s number of manufactures.
[Konstantin Babkin, Event Organizer]:
"The opening of the market is simply uncalled for. Other countries do nothing for us; not a single thing is changing in their laws. But we have to open our market to the hundreds, nothing in return. Losses are estimated to be trillions of rubles a year. "
The Russian economy could lose up to 1.5 trillion rubles a year after joining the WTO, according to experts’ preliminary calculations. 
Budget revenues will fall by about 500 billion rubles a year, due to a decrease in the collection of duties and taxes. 
The country could also lose more than 2 million jobs.
The Action Group against the WTO - consisting of representatives from public, political and business organizations - are intending to hold a referendum, inviting Russians to express their stance on this issue. 
The Action Group must gather two million signatures from citizens across Russia in order to hold the referendum."
How serious is this opposition? Would a referendum result in Russia deciding not to accede to the WTO? Increasingly, compulsions of domestic realities clash with the idea of the benefits of international trade without barriers. Political representatives are unable to comprehend and thereafter convince their constituents of the potential benefits. Russia's integration into the WTO, along with many benefits, will have a negative impact on various sectors of the domestic economy. Will the establishment be able to tide over this opposition with a "cost-benefit" analysis of Russia's proposed entry? Communicating that to the people will be a much tougher task!

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