Friday, November 11, 2011

Russia to be number 154!

Russia's accession to the WTO would be the 154th country coming onto the WTO juggernaut! It is obvious that Russia sees a benefit in being part of the multilateral trading system rather than being out of it. It would seem to benefit their producers by giving them market access. For the outside world, it be an opportunity to take part in international trade with Russia based on rules and the WTO system. The rise in China's trade since it became a member of the WTO seems to be another reason that propelled the Russians to push hard for their inclusion as explained by the Russian trade negotiator. It would be interesting to see the impact of the membership on Russia's exports and accessing foreign markets as well as impact on the domestic industry.

It is also a shot in the arm for the WTO as  according to Pascal Lamy in an interview, Director General of WTO, "One way to reinforce the rules is to extend the perimeter of rules on this planet."

While Russia has amended many of it's domestic legislations to be accepted as a player in the multi-lateral system, it remains to be seen whether the Jackson-Vanik amendment in the US would stand the test of time. The amendment restricts trade, amongst others, with non-market economies which do not have free immigration policies. That Russia is getting a Presidential waiver from the amendment is another matter. The issue is whether the mere existence of the amendment due to Russia's entry into the WTO will make the domestic legislation subject to challenge in the WTO. Though not challenged in the Dispute Settlement Panel, the amendment has come in for a challenge domestically in the United States by the Russia House, a group that espouses better Russia-US trade relations.

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