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No reason to expect early domestic price slump - Eurasian economic commission’s trade minister

August 24, 2013, 5:55 UTC+3
Besides, the period of Russia’s WTO membership saw no considerable growth in import
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Andrei Slepnyov, photo ITAR-TASS/Sergey Karpov

Andrei Slepnyov, photo ITAR-TASS/Sergey Karpov

MOSCOW, August 24 (Itar-Tass) - Russia’s accession to the World Trade Organization has caused no effect on the level of prices on the domestic market, and no fall should be expected in the short term, the Eurasian Economic Commission’s trade minister, Andrei Slepnyov, has said.

“Last year, when we reduced the average rate of the tariff from 9.3 percent to 7.8 percent, the rouble got about ten percent weaker in the spring and summer of 2012. This year we can see the very same ratios - we lower the tariffs by one percent as of September 1. Alongside this we see a far greater weakening of the rouble, let alone other phenomena,” Slepnyov told ITAR-TASS in connection with the first anniversary of Russia’s admission to the WTO.

Slepnyov said consumer prices might go down somewhat in the medium term, if the level of competition were built up systematically.

“This may either encourage a certain price reduction or contain their growth, but a slump in prices looks like a utopia to me,” Slepnyov said.

Besides, the period of Russia’s WTO membership saw no considerable growth in import.

“In September 2012 through May 2013 the import was up just 5.2 percent. This is not exactly what one may call considerable growth. On the other hand, there is as group of goods that show twice as high growth rates,” Slepnyov said. In particular he mentioned foods (12-percent growth) and clothes and footwear (10-percent growth).

“Lower protective rates caused import to outpace both domestic production and consumption growth. In the meantime, in such sensitive industries as the automotive market we have noticed no great change,” Slepnyov said.

He speculated that it would have been unrealistic to expect the WTO membership would bring about any positive or negative effects over one year.

“The rules of the World Trade Organization, the inertia of our economy and the terms of Russia’s accession as they are, the effects will begin to be felt in the medium and long term. In fact, they are going to be strategic,” Slepnyov remarked.

He added that at this point it was impossible to identify with laboratory precision the effects of the WTO and to distinguish them from all other effects that may manifest themselves in a period of economic instability.



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