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Russian President Vladimir Putin held an enlarged meeting of the Russian Security Council devoted to the WTO problem on Wednesday. He instructed the Foreign Ministry, the Ministry of Economic Development and the Ministry of Industry and Trade to seek for discriminatory sanctions to be lifted against several Russian companies in the wake of the country’s accession in the World Trade Organization (WTO). The Labour Ministry instructed to assess the risks of the unemployment growth over Russia’s accession in the WTO. In general, the president set the task for the government to develop an action plan for the adaptation of concrete industries of economy to new conditions.
The president noted that when Russia was negotiating, everybody realised perfectly in what a deep recession the world economy can slide down, the Rossiiskaya Gazeta daily reported. “We realized perfectly that our partners went into concessions on many issues, meeting us halfway, realizing these circumstances as we did it and seeking to guarantee their promotion on our markets. We were running these risks consciously,” the president pledged. Although in general Russia succeeded to enter the WTO on much more profitable conditions than many neighbouring countries. Being a member of this organization the country can participate as a full-fledged member in the development of the international trading rules, protect its interests in the WTO bodies to settle the disputes. However, the threat of the global slowdown in the growth in the world economy and consequently low investment activities will remain more or less. Therefore, Putin acknowledged that there is some risk that Russia will not be able to achieve quick positive results from its membership in the WTO.
Russia will not ask the WTO about the revision of the conditions for the country’s membership, right several federal sources, which the Vedomosti daily cited, explained. “The president meant that over the reduction of the markets, primarily in the EU, a massive flow of goods, on which we brought down the duties sharply, for instance, agricultural machinery, may flood on the Russian market,” an official said. Putin also noted that other countries not always completely fulfil their duties over the WTO: for instance, ungrounded discriminatory measures against several Russian goods remain in effect,” Peskov added.
After the accession in the WTO the average import duty will go down from 9.5% to six percent within next three years, the newspaper reported. The Ministry of Economic Development estimated that the losses of the federal budget from lower duties will make 188 billion roubles in 2013, 257 billion roubles in 2014. But they will be actually lower thanks to the growth of trade and tax base. The production industries will win from the WTO entry thanks to lower duties on imported equipment, the retail trade and the chemical industry will also have some profit, Renaissance Capital and UniCredit said in their review reports.
The president has made this statement for a good reason, as the government is analysing closely the consequences of the WTO accession, an official of the governmental staff acknowledged. “We meet with businesspeople every week, they complain to us on the WTO, but we should understand that they cannot say anything else – our task is just to realize, where the situation really needs some interference,” the Vedomosti daily reported. The revision of the import duties is not really planned, but other measures of support to the production industries are possible, he added.
Minister of Economic Development Andrei Belousov named as one of these measures that the government is pondering over a possible introduction of the anti-dumping import duty on the agricultural machinery starting from 2013, but the country should wait for the results of the anti-dumping investigation by the Eurasian Economic Commission. The commission launched this investigation on the strength of the petitions from Rostselmash and the Krasnoyarsk plant of harvesters last July.
Russia will be able to revise the import duties not earlier than in three years, but the decisions should be single, the Ministry of Economic Development reported. In any case some duties will be revised, the errors were made on them when taking the final documents and incorrect duty rates were approved, an official of the Eurasian Economic Commission noted, “For instance, this is the duties on the imports of pigs, paper and cardboard.” It is unclear yet how the duty rates will change.
After Russia’s accession in the WTO the subsidies on 80% of interest rates for agrarian producers for the purchase of domestic machinery were cancelled, the Russian state authorities spent eight billion roubles for this measure, director of the Rosagromash association Yevgeny Korchevoy said. The mechanism can be changed – subsidize some expenditures on personnel not of consumers, but producers of the agricultural machinery, he recommended.