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Russia Changes Its WTO Strategy

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Published at: online.wsj.com

Russia Changes its WTO Strategy

June 22, 2009

Analysis by: GLG Expert Contributor

Moscow's unexpected change of heart over WTO accession has done nothing to help Russia join this organization. Russian decision to abandon its separate WTO bid and start new accession talks to join WTO together with other members of its Customs Union - Belarus and Kazakhstan - means a complete change of negotiating format and positions and an actual revision of previous provisional aggrements already reached between Moscow and WTO. Russia's volt-face questions the credibility of Moscow's pledges and sincerity of its drive to join WTO. Does Moscow really want to join WTO now, at the peak of the global economic crisis? The answer is no.  In order to save its uncompetitive industries Russian government tends to rely on tough protectionist policies by imposing new tariff and non-tariff barriers. They contradict WTO standards and expose Moscow to severe pressures from its WTO partners. The Kremlin does not need WTO as a antiprotectionist watchdog that hinders its economic performance.

Russian motives regarding WTO

June 15, 2009

Analysis by: GLG Expert Contributor

Russia's WTO announcement is important for four reasons beyond international trade.  Russia, like the Nazis in the 1930s is desperqate to shore up its currency by forging a trade bloc based around the ruble and by undermining the sovereignty of its neighbors by compelling them to join it.  Since it is unlikely this announcment was coordinated with Belarus and Kazakhstan it shows Moscow's contempt for their sovereignty.  Finally, this announcement illustrates Moscow's perennial demand for a special status in all internatioinal fora and thus special rights and privileges in them.

Have Russia, Kazakhstan and Belarus Decided WTO is Passé?

June 9, 2009

Analysis by: GLG Expert Contributor

Since 1947, many nations have agreed that more or less uniform global trade rules are in the best interests of the global economy.  The General Agreement on Tariffs and Trade (GATT) and its successor organization the World Trade Organization (WTO) reflect this consensus. A major benefit of this system is that companies seeking to do business across borders can receive some assurance that their goods and services will be protected from discriminatory tariff and non-tariff treatment, and receive the same treatment as their competitors in the target market or from third countries. However, at this time and depending on how one counts, dozens if not hundreds of "extra-WTO" bilateral and regional trade agreements have been negotiated worldwide.  By their nature, these agreements provide benefits to signatory nations that are not available to non-signatory nations.  This presents the question of whether these agreements will eventually undermine the WTO and the world economy.