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Challenges & Future Dispute Areas: WTO Entry Implications for Russia & Ukraine

Explore the implications of WTO accession for Russia & Ukraine, examining challenges, stumbling blocs, and future dispute areas faced by both countries as they navigate the process.

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Challenges & Future Dispute Areas: WTO Entry Implications for Russia & Ukraine

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  1. Implications of WTO Entry for Russia and Ukraine: Challenges and Future Dispute AreasNinth Annual WTO ConferenceLondon, May 2009 Oleg Riabokon

  2. RUSSIA • 1993 - Russia applied for accession to the GATT – as of now 60 members form the Working Party on Russia’s accession to the WTO • - 16 years later – still negotiating • - bilateral market access negotiations are complete with most members of the WG (Georgia is outstanding) • - numerous deadlines for completion of negotiations have been missed • - next target – January 1, 2010 • - Medvedev-Obama meeting in July is viewed as crucial to push talks further

  3. RUSSIA • STUMBLING BLOCS: • Political: centered around situation in the Caucasus • “…Russia is prepared to join the WTO, and is prepared to join it on non-discriminatory and non-humiliating conditions. We have done all that has to be done to this end…the process has been dragged out and we are annoyed by this.” • President Medvedev, April 2009

  4. RUSSIA • STUMBLING BLOCS: • Non-Political: • - Agricultural Subsidies; • - Export Duties – unprocessed timber and steel scrap (the EU); • - SPS measures; • - Transit Railway Tariffs; • - IP protection; • - Encryption Technology Imports; • - State- Owned Companies (Energy Sector/Commercial Terms); • - TRQs on pork and poultry (the USA).

  5. Russia • CHALLENGES • - Non-Tariff Barriers – technical regulations, licensing/permits; • - Regulated Investment into Strategic Industries – FDI regulations; • - Anti-Crises measures stimulating internal demand which have negative effect on foreign trade (automobile industry, state aid, etc.); • - Poor Customs Training – Region to Region differences; • - Low public support for WTO entry; • - Customs Union with Kazakhstan and Belarus.

  6. UKRAINE • May 16, 2008 – Ukraine acceded to the WTO • December 2008 – Government passed detailed Action Plan on the Priority Measures on Implementation of the WTO Accession Terms • - state procurement; • - civil aircraft; • - international technical standards; • - state aid to agriculture; • - new legislation to be in compliance with WTO requirements

  7. UKRAINE • CHALLENGES: • - financial crises – IMF approved rescue package of 16.4 billion USD (tight monitoring); • - negative trade balance peaking at 18 billion USD this winter; • - major failure of the banking system that saw a number of leading banks go under state control; • - various exemptions (currency regulations, VAT, free economic zones, etc.) creating legislative loopholes to satisfy oligarchic groups to the detriment of the whole economy.

  8. UKRAINE • Inconsistent Policies: • - 13 percent import tariff surcharge on imports citing balance of payment difficulties – for 6 months: • 1) passed by Parliament in March; • 2) after two weeks cancelled by a Government Decree with the exception of cars and refrigerators (the Decree is not published); • - increase in the use of trade protection mechanisms (poultry from the US and Brazil) after importers were begged to bring cheap imports; • - influx of Customs related complaints – attachment of goods, delays, etc.

  9. CONCLUSION • WTO will be a totally different organization after Russia’s accession • Ukraine is unlikely to become any major negotiator any time soon while it is coping with implementation challenges and getting used to the rules of the game

  10. Magisters AstanaKyiv LondonMinskMoscow | 10

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