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Import duty reduction creates main risk after Russia’s accession to WTO

March 19, 2012, 18:03 UTC+3
The rules of granting industrial subsidies will also change
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MOSCOW, March 19 (Itar-Tass) —— Lawmakers and experts called for measures aimed at protecting Russian enterprises and the Russian market from possible negative consequences of the country’s accession to the World Trade Organisation (WTO).

They stressed the importance of information and awareness work with regions and entrepreneurs in solving problems created by changes in trade rules and the situation in the market.

“If we sum up the results of our talks and what will change in the Russian economy on the next day after accession to the WTO, we can come to the conclusion that little will actually change,” Russia’s negotiator and the director of the Department of Trade Negotiations of the Ministry of Economic Development, Maxim Medvedkov, said at a parliamentary hearing on Monday, March 19.

“The main risks can arise from the reduction of import duties because like other countries we have agreed that duties will be reduced for about half of the goods during long periods of up to seven years by 3-3.5 percent,” he said.

The rules of granting industrial subsidies will also change. “These changes will affect agriculture and shipbuilding,” Madvedkov said.

At the same time, he said the subsidies will continue in the same amount but their form will change.

In addition, railway tariffs for export and import supplies will be brought in line with domestic tariffs, but this will not affect transit tariffs. “We scan set transit tariffs at any level we want if they are based on the cost of transportation services,” the expert said.

The decision to level off the tariffs was made in 1996 but was never implemented. “Now we will have to do so by 2013,” Medvedkov added.

“The WTO does not forbid the use a wide range of tools that can be invoked through extra duties, qualitative or other restrictions if import grows and harms domestic industry,” he said.

If import starts growing because of import duty cuts after accession to the WTO and this harms Russian manufacturers, the Customs Union Commission, which is now called the Eurasian Commission, can take measures to limit such import.

“Naturally, we can preserve or even increase tariff protection for a certain factor as long as these measures last, i.e. from 4 to 8 years,” the official said. “This is a very important tool that allows us to neutralise the consequences of import tariff liberalisation.”

The Ministry of Economic Development is drafting measures to deal with potential risks for the Russian economy and its adaptation to WTO membership.

But Medvedkov said “there can be no universal recipes. Each sector needs an individual approach”.

 

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