The Russian Federation must comply with all the requierements to achieve accesion to the WTO. The WTO: Administers the WTO trade agreements, is the most important forum for trade negotiations, handles trade disputes between trading partners, monitors national trade policies, gives technical assistance and training for developing countries, and cooperates with other international organizations. All these facts, by themselves, reveal the importance of accession to the WTO

Before tackling any of the major obstacles to accession, the Russian government should acquaint itself with the accession process itself. Discussed below are several helpful reference documents on accession and a brief overview or the process.

Process Overview

There is one basic WTO document, prepared by the Secretariat in 1995, that synthesizes the formal procedures for accession: (WT/ACC/1). It serves as a practical guide for WTO Members and acceding states, but should not be read as a general policy statement on accession negotiations.[1] What you find in this document is the core of the accession process. However, it would be misleading to think that only through reading this document and following the indicated procedures, a country will gain accession. The process is very complicated and by no means expeditious. None of the most recently completed accession processes as shown in the table, was completed in less than two years and four months since the filing of the application (see Table 1).

Another helpful WTO document on accession is (WT/ACC/7/Rev.1). It provides a comprehensive review and analysis of all accessions completed up until 1999. This document covers issues such as: the procedures laid down for accessions under Article XII; the transparency and pace of the accession process; whether the fact finding stage overburdened applicants, particularly smaller economies; the terms and conditions of accession, in particular the availability of special and differential treatment including transition periods; how the special needs and capacities of least developed applicants for accession are addressed; the provision and co-ordination of technical assistance to acceding governments; and the relationship between accessions and the new trade negotiations.

WTO accession is neither simple nor expeditious, as the experience of recent accessions shows (see Table 1). WTO Member countries require acceding states to adopt stringent rules, regulations, and other concessions before granting admission. The process involves a thorough analysis of the country’s policies to determine whether they meet the requirements of the member states.

The process of gathering information (as specified in WTO document WT/ACC/1 is very comprehensive. The Russian government must establish procedures for presenting all the information that Member Countries might request on a timely basis. Failure to do so will only slow the accession process.

Russia has already won the political support of the European Union for its accession. Also, trade ties with the EU and with other WTO member states are increasing. For example, the steel agreement signed in 1997 by Russia and the EU is an important step towards greater trade liberalization. As trade increases between Russia and WTO member countries, political support for Russia’s accession will increase. This is the case with the EU. They want to normalize trade relations with Russia, and Russia’s accession to the WTO is an important step in that direction.

Russia will not accede to the WTO by relying on the political support of member countries alone. The government of the Russian Federation must be prepared to make substantial reforms, concessions, and changes to its legal, political, and economic institutions in order to gain membership.

The Russian government has submitted its initial WTO Market Access Offer, covering nearly 10,000 tariff items.

According to the EBRD:

In January 1999, the [Russian] government introduced a 10 per cent tariff on scrap copper, nickel, aluminum, lead, zinc, cobalt and titanium, timber and some agricultural products. A 5 per cent tariff is to be introduced on exports of gas, coal and oil products. The tariffs are only related to trade with non-CIS countries and are due to remain in place for six months, which is in accordance with WTO regulations on temporary measures. They should not jeopardize Russia’s negotiations with the WTO. [2]

The Russian Federation is trying to enter into the new international order, and therefore must a avoid unnecessary tensions with other sovereign nations.

WTO Article XII states that the Ministerial Conference, where all member countries are represented, makes the final decision on accession. The Ministerial Conference must approve the agreement on the terms of accession by a two-thirds majority of WTO member states. This last one is a formal step. The Ministerial Conference will approve the country accession, once the Working Party has approved and is satisfied with the outcome of the negotiations.

The Benefits of Accession

Russia will benefit from WTO membership as trade barriers fall in line with WTO norms. Russian exporters will benefit from better access to world markets. Russian consumers will benefit from cheaper goods in a larger variety. Most of Russia’s trade partners are already either member states or in the process of acceding. Trade data show that both the origin of Russia’s imports and the destination of its exports are quite diversified among several trade partners. Most importantly, the data clearly show that on average, more than 75 per cent of Russia’s total trade is carried out with WTO member countries. Almost all of the remainder consists of trade with countries seeking accession (see Tables 3 and 4).

The strict requirements of WTO accession will help the Russian government "lock in" reforms already made and pursue additional reforms by providing strong outside pressure as well as momentum for economic liberalization. The Russian Federation has made progress in its market-oriented economic reforms. It has gradually begun to open its economy to international trade. The data show a sustained increased in total exports and imports during the decade of the 1990’s, with a slight downturn in 1997 – 1998, due to the economic crisis (see Graph 1). WTO membership will further this process.

By becoming a Member of the WTO, the economic policies of the Russian Federation will necessarily become more transparent, stable, and governed by the rule of law.

The possibility of setting trade disputes within the WTO is one of the clearest benefits of WTO membership. Participation in the rules-based trading regime of the WTO, which provides dispute-settlement institutions, will also help avoid unnecessary conflicts with other states. This provides a multilateral forum for furthing stability in the post-cold war world.

Membership, itself, is perhaps the most obvious benefit. Russia will gain prestige in in the world community as well as a voice in the WTO. The importance of this cannot be stressed enough. The WTO generally operates by consensus, so every Member has a veto.

Prospects

Russia is not alone in its efforts to accede to the WTO. Table 2 reveals that almost all transition economies, which are not Members of the WTO, are currently seeking accession. Unfortunately even WTO officials[3] do not have estimates on when Russian accession will be completed. It is critical for the success of these negotiations that Russia complies with the requirements. Ultimately, the process depends on Russian policy. WTO Director General Michael Moore emphasized this point in a recent speech on transition economies and the WTO:

“…All the same, the speed of acceding countries' progress depends largely on their willingness to open their markets to foreign trade and investment and to commit themselves to transparent and binding WTO rules. That is as it should be. We are not a talking shop, and WTO membership is not a political favor. The whole point of joining the WTO is to secure the benefits of freer, rules-based trade and transparent, law-based economic relations more generally. And once a country joins the WTO, its voice counts. We operate by consensus, so every Member has a veto.”

Despite Russia’s barriers to accession, Russia should charge ahead and expedite the process as much as possible. The WTO is the most important forum for trade negotiations; it handles trade disputes among trading partners, monitors national trade policies, gives technical assistance and training for transition countries, and cooperates with other international organizations. All these facts, by themselves, reveal the importance of accession to the WTO