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How should Russia respond to creation of Trans-Pacific Partnership?

February 06, 2016, 23:46 UTC+3

Moscow’s best strategy would be to use the TPP’s experience, including the implementation of integration projects with Russia, experts said

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© AP Photo/Susan Walsh

MOSCOW, February 6. /TASS/. Even if Russia had been invited to participate in the Trans-Pacific Partnership (TPP), to which it reacted with restraint, it would not have joined anyway - for economic and political reasons, according to experts. The conditions of the Partnership do not satisfy the Russians, and even more so, China. However, Moscow’s best strategy would be to use the TPP’s experience, including the implementation of integration projects with Russia, experts said.

On Thursday, the members of the TPP have signed an agreement on establishing the new trade bloc. Trade ministers of 12 countries - Australia, Brunei, Vietnam, Canada, Malaysia, Mexico, New Zealand, Peru, the United States, Singapore, Chile and Japan - signed the document. The agreement includes a slow (10 - 25 years) but rather vast reduction of duties for 18,000 goods, as well as removing non-tariff and technical constraints and expanding access to services markets. Now the countries accounting for at least 85% of the total TPP’s GDP - primarily, the United State and Japan - need to ratify the agreement for it to enter into force.

Moscow was reserved in its reaction to the creation of the TPP. Presidential spokesman Dmitry Peskov referred to Vladimir Putin's Address to the United Nations Security Council in which the President expressed concern about the possibility of creating any sort of "narrow groups", which would subsequently become substitutes for the WTO and international trade rules.

Russian Economic Development Minister Alexey Ulyukayev was less diplomatic, "We believe it is fundamentally wrong to address the problem of the global trade by dividing it into such club deals".

The fact that two significant Pacific Rim economies - China and Russia - have not been invited to participate in the negotiations on the TPP, is often seen as the basis for blaming the project for secrecy and confrontation.

Head of the Russian Foreign Policy Department at the Russian Presidential Academy (RANEPA) Olga Abramova told TASS that creating the TPP and the Transatlantic Trade and Investment Partnership is a part of "containment policy of Russia, China and other BRICS countries in order to maintain the current world order with the United States as a leader."

"What reaction is possible to the challenges arising in connection with the creation of TPP?" Sergey Afontsev, Head of the Economic Theory Department of the Institute of World Economy and International Relations, Russian Academy of Sciences, said in his article for the journal "Russia in Global Affairs." "For Russia, accession to this regional bloc in the coming years is not possible neither politically (in the context of a priority focus on the construction of a "multipolar world"), nor economically - taking into account strengthening of protectionist tendencies and import substitution strategy. It is important that the clauses of the TPP agreement apply only to economic relations between the countries that have signed it, but not to their relations with third states. This means that Russia will be able to continue to cooperate with the members of the TPP, based on the legal basis of bilateral relations formed earlier."

The best strategy for Russia in relation to the TPP, according to experts, is to monitor and assess the relevance of its experience in integration projects implemented with the participation of Russia. "After all, there is nothing bad about the fact that we were not invited to the negotiations on the agreement, which we were not ready to sign anyway. We are strangers to this feast of life - but nothing prevents us from watching fireworks and remembering the techniques that could be useful in organizing our own celebration."

"To some extent this agreement is a reaction to the strengthening of China's positions, but only in part," Higher School of Economics professor Vladimir Zuev told TASS. "What’s important is that the agreement is against the trade restrictions that have not been discussed before. This includes non-tariff barriers, protecting intellectual property rights. In this sense, the agreement is innovative," he added.

China and Russia could hypothetically join it in the future, but it is unlikely, the expert said. "Because there are clauses that both countries find inconvenient. For example - on state-controlled companies. No international agreement had tried to help private companies to compete with the state-owned enterprises before. In addition, the agreement includes the rules to facilitate access to government contracts, and we, even within the WTO, were not ready to sign the protocol on public procurement. Our public procurement market is strictly regulated, and Russia is not yet ready to be more open."

The agreement on the TPP is "not against us, but in favor of different international trade principles." "We are not going to join it yet, because so far it does not satisfy us," he concluded.

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