26 Jun 2012
Russia & CIS
- Russia’s negotiation to join the WTO has been the longest multilateral negotiation in modern history. After 18 years it is poised to join if the Russian Duma ratifies the protocol in July. In principle this is good news for both investors in Russia and firms that import and export there.
- However, it is still not certain that this will happen. Russia’s long road to the WTO has been a mirror of its post-Soviet politics. It has tracked its shifting attitudes to market liberalisation, state capitalism and its status and strategy as a hydrocarbon power. Those attitudes shaped its journey into the WTO and they will shape its conduct inside it.
- China’s long WTO negotiation between 1986 and 2001 was part of an internal power struggle for dominance of China’s economic agenda, and the same has been true of Russia. The difference is that in Russia’s political economy it is hard to find a well-connected constituency with a serious and consistent vested interest in Russia joining the WTO.
- The risk for Russia and for Russian investors is that the protracted process of WTO negotiation and the instincts of the Russian leadership are such that some of the key potential benefits of WTO membership are lost in the ambiguous messages from Moscow.
- Even if Russia does ultimately join the WTO in 2012, EU and US officials privately expect the first few years of Russian membership to be difficult. Nobody seems to expect Russia to be particularly constructive or instinctively compliant as a WTO member, probably with good reason.
The views expressed in this note can be attributed to the named author(s) only.