Saturday, August 18, 2012

Will Russia cope?

Russia's entry into the WTO has been watched with great interest around the world. I have blogged about Russia's entry into the multilateral forum here, here and here. The consequences of Russia becoming a member of the WTO has been widely discussed. Experts have largely felt that while liberalizing trade would have an adverse impact on the local industry in some sectors, on the whole Russia will benefit from increased competition, market access and transparency.World Bank has analyzed the probable impact here. Reform of domestic laws to be in consonance with WTO rules would be a natural corollary.

A recent piece by David Collins in FT blog brings out the challenges Russia would have with it's WTO entry. Capacity to comprehend and effectively use trade rules to protect as well as advance one's national interest has been a recurring theme in this blog.The lack of capacity is a serious impediment that many nations face even after being in the WTO for decades. How would russia cope with this challenge. The piece rightly highlights the importance of building capacity to effectively engage with the WTO.
"Although Russia’s accession process has been planned for a number of years there remains a very significant knowledge gap within Russia regarding what WTO membership will mean to the country.  It is widely believed that many of the politicians who voted for (and against) WTO accession did not fully appreciate its implications in all sectors. The Russian government is eagerly seeking to recruit personnel with experience in international trade, including lawyers and economists.  Several hundred positions need to be filled in Moscow and Geneva and there is an insufficient pool of qualified professionals to draw from because Russian universities do not yet offer courses on the WTO. Clearly the development of a suitable foundation of local expertise in international trade could take some time. Until then foreign expertise will be needed, likely in the form of expensive American and European law firms.  The WTO itself sponsors a number of training initiatives and it is hoped that Russians will make use of these."
Multidisciplinary teams, both for negotiation as well as dispute settlement, is a way forward to address this issue. Indigenization of legal expertise and capacity to effectively engage with the quagmire of multilateral legal rules is a sine qua non of a strategic use of the WTO. How and when Russia will achieve this self sufficiency would be an interesting aspect of Russia's tryst with the multilateral trading regime.


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