It’s been almost 12 months since Russia joined the World Trade Organization. This means that we have got an opportunity to make first intermediary conclusions. Still, this is not a easy task since the results are rather controversial. On top of that, the Russian community is still divided over Russia’s decision to join the WTO.
Some of them consider July 10th 2012 (the day when the State Duma approved Russia’s WTO membership) the day of shame and national tragedy, the proof of national helplessness. They urge the government to exit the WTO. Others think that Russia has finally got an opportunity to integrate into the global economy, which is definitely a huge benefit for the Russian economy.
Let’s have a closer look at the situation…
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Alas, many Russians think of Russia’s WTO membership as a “Titanic”. What are the reasons?
Firstly, they say that Russia has deprived itself of independent industrial, financial and credit policies.
The Russian economy showed zero industrial growth in Q1 2013. This is the worst performance since Q3 2009. Many experts say that the WTO membership is the major reason for this decline.
Russia’s agriculture suffers losses. Local media keep reporting about closed poultry factories and pig farms on a weekly basis. It is not accidentally, that agrarians were the biggest opponents of Russia’s WTO membership.
The Russian market keeps being conquered by imported products, thereby affecting local producers. Obviously, this affects the national economy.
At the same time, the supporters of Russia’s WTO membership say that it allows Russia to improve the local investment climate. Still, investment climate can be changed without entering the WTO by changing the local economic policy.
When considering the future of the Russian Ruble, theoretically Russia’ WTO membership speaks in favor of a stronger Russian currency. However, nobody can guarantee that the Russian Ruble will eventually become stronger in relation to major currencies.
The chart below, courtesy of Masterforex-V Academy, reflects the current state of affairs in the market of USDRUB. The currency pair is currently trading around 31,38.
It turns out that the only big gainers are Russian commodity oligarchs. At the same time those who are against seeing Russia in the WTO say that all those plans aimed at modernizing the Russian economy are now doomed.
Still there are optimistic experts who urge others to stop dramatizing the situation around the WTO.
For example, Eugene Olkhovsky, Masterforex-V Academy’s leading experts in financial markets from Canada, says that the WTO membership is definitely a huge benefit for Russia, which opens a lot of new opportunities, including:
Improving the business climate in Russia. Russian businessmen will get an opportunity to learn from their foreign colleagues to improve the promotion of their products and services abroad.
Improving Russia’s investment attractiveness. At the same time, Russia will be able to boost the external trade volume. Initially, the WTJ was created to give all of its members equal competitive opportunities.
Improving the quality of Russian products and services. Apparently, Russian exporters will have to increase the quality of their products and services in order to stay competitive in the international arena.
In order to sum up, we can conclude that the WTO gives Russia an opportunity to consolidate its position in the world, simultaneously integrating into the global economy. Still, there will be no instant progress. It may take years. During the initial phase of adaptation and integration, Russia will need some compensatory and anti-dumping steps in order to survive the period.
