To leave or not to leave? What will be the consequences for Russia in the case of withdrawal from the WTO

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To leave or not to leave? What will be the consequences for Russia in the case of withdrawal from the WTO
To leave or not to leave? What will be the consequences for Russia in the case of withdrawal from the WTO
23 May, 10:29Economy
The Ministry of Foreign Affairs sent a list of agreements with international organizations to the State Duma for consideration for denunciation. Among those listed is the World Trade Organization, the entry into which took the Russian Federation 18 years.

What is fraught with leaving the trade association, Novye Izvestia asked authoritative economists.

Igor Nikolayev, economist, Doctor of Economics.

- What is the reason for the decision to withdraw from the WTO?

- The WTO is a respected world organization. If you are not a member of it, somehow it is "not according to the rules." But this is a political component. In fact, there were strong economic justifications for wanting to join the WTO. It is not for nothing that the RSPP has been doing this for many years. Supervised and led the preparation process, which lasted 18 years, Alexey Mordashov.

- What gave the status of a member of the WTO?

- As members of the WTO, we could participate on an equal footing in the development of the rules of world trade. This is important, but not the most important. It is important that the restrictions that came into force and we assumed obligations helped improve the economy, make it more efficient and competitive.

- What are the restrictions?

- For example, with regard to subsidizing agriculture. There are several so-called "baskets" - green, yellow, amber, blue ... The green basket is what is allowed to be done. These are not direct methods of supporting agriculture - subsidizing agriculture. It is allowed to subsidize lending, infrastructure, scientific research. This kind of indirect support, as studies and practice have shown, is more effective than giving money to subsidize exports. Because export subsidies for some products distort the real situation in agriculture. Whether the national manufacturer is competitive in this area or not is not very clear. Competitiveness is obvious if no one helps you. But to indirectly subsidize infrastructure - please! This was included in the “green box”, this is according to WTO rules. And what distorts the real picture, the “yellow box”, is what was allowed during the entry, but we took on obligations to reduce and then exclude this assistance. It was forbidden to directly support exporters. The WTO means fair and competitive rules of the game. If the state bears the costs of some producer, this is wrong. You can help with the methods that are included in the "green box". This is more effective than direct subsidies. It is believed that this contributes to the development of agriculture, and I agree with this. Everything was scheduled for many years, individually. We had long negotiations on agriculture, but all these measures were aimed at increasing efficiency. This applied not only to agriculture, but also to other industries.

If you are not a member of the WTO, then you can be blocked with the help of duties, making it difficult to access the domestic market. And if you are a member of the WTO, then the chances that such methods of struggle will be used against you are much less, because it is considered wrong. That is, WTO membership provided equal conditions for competition in the world market, which is very important. Therefore, there was an argument, there were weighty reasons to strive there.

But I must say that not everything is so rosy. There are grounds for claims to the WTO. You can break the rules, they were broken. Then the claims were filed with the court, but they were sorted out for years. Why such rules, if they can be ignored? There were serious shortcomings in the work, but they do not mean that the idea itself is bad and that it is necessary to leave the organization. In any case, this is not the real reason. The real reason is sanctions and the WTO is not working.

I think that the reason for leaving the organization is as follows: those good rules that are accepted are not respected. Claims are lengthy. The sanctions that are imposed on Russia are beyond any rules, they have political reasons. The WTO does not prevent them. Why then be in it?

I think that the main reason for making such a decision is that participation in the WTO does not give us any opportunity to resist sanctions.

- What is fraught with withdrawal from the WTO and how will it affect the economy?

- As for trade with "unfriendly countries" - it will not be reflected in any way. But in general, there are still a lot of countries that have not joined the imposed sanctions. In relations with them then - we are not a WTO country, there will be no possibility of protecting our interests either. There, “everything is broken and broken” due to sanctions and the WTO does not solve anything, but here, when you are not a member of the WTO, you cannot use this mechanism to somehow influence the situation on the same tariff disputes. We will not be able to defend our position. And who said that we will have cloudless relations with countries that remain trading partners? With the same India, other countries of Southeast Asia, with China ... on the contrary, the risk of disputes increases. Those countries understand that Russia is now not up to fat, to trade with them. Naturally, they will tighten the terms of trade, even to the extent that they introduce rules that are not very consistent with the rules of the WTO. We can't oppose anything.

In my opinion, the main risk is here, in trading with that half of the world that is still open for trade.

- Will the exit from the WTO be a reason for the remaining trade partners to deping prices for Russian goods?

- They already do it now. It is known that India buys oil from us at a big discount, up to 30%. You know that your counterparties have nothing to resist ... they are tempted to twist their arms even more.

- Does the exit from the WTO threaten with the loss of markets?

- Where there are not so many alternative suppliers, for example, in the grain or sunflower oil market, it will be necessary - they will tear off with their hands. And where there are enough other suppliers, why not tighten the terms of trade with Russia? It's a sin not to use it! Not all markets, but some will push us harder.

- How long does it take to withdraw from the WTO?

- Somehow it happens that we get out quickly. But I think that our producers will resist. The question is how much they want to resist strongly and whether they will be heard. The same metallurgists will remain of the opinion that WTO membership is necessary.

Dmitry Potapenko, economist.

- Why is membership in the WTO useful? Is it possible to compare the difference in the status of a member and a non-member of the WTO with the difference between trading near the metro on a cardboard box and a shop in a mall?

- The logic of joining the WTO is very simple – the removal of administrative barriers. The import of goods is certification, simplification of logistics procedures, the admission of carriers, the admission of certification bodies, and so on. That is, there is a huge list of what can be beneficial. Having entered the WTO more than ten years ago, we managed to enter on the most unfavorable terms, making life difficult for our producers of agricultural products and light industry. Therefore, propagandists will now talk about some disadvantages of membership in the organization.

- Why did it happen that Russia joined on unfavorable terms? Are we missing something?

We are always missing something. The mechanism of protectionism, which exists abroad as well, we under-twisted it at the very initial stage. In all countries of the world, agriculture is heavily subsidized. We flew into the fact that our subsidies are very limited. Both for the supply of goods and for its production. Therefore, our manufacturers found themselves in non-competitive conditions compared to foreign ones.

First of all, of course, this concerns agricultural products, because we did not have special electronics, there was practically no clothing industry. The light industry was put in unfavorable conditions and everything related to consumer goods, which we did not have at that time. Therefore, they considered it possible to undermine these conditions. Many officials earned on this not only capital, but also political capital. We agreed to the proposed conditions because we wanted to become members of the WTO as soon as possible. It should have been more slowly, but on more thoughtful terms.

But besides the listed disadvantages, there are a huge number of advantages: facilitated certification of our access to foreign markets, simplified logistics (passing cars to the intersection of transport arteries, we could drive our cars, which will not happen now), supply of high-tech products, chemical fertilizers, raw materials, materials for agricultural products - everything went along the "green corridor", that is, without the need to conclude one-time contracts, as was the case under Soviet rule.

- Do you link the decision to withdraw from the WTO to the sanctions imposed on Russia and Mishustin's decree on parallel imports, which could lead to additional fines?

- Yes, this is an absolutely necessary measure. We will not be able to fulfill the obligations imposed by participation in international organizations. Parallel imports - gray imports - the WTO is not supported, so this is a completely necessary measure.

- What will Russia lose and how will it be able to compensate for these losses?

- We will lose the access of our agricultural and other producers to the international market under a simplified regime. All procedures will be extremely difficult.

- The main agricultural import product is grain. Will the withdrawal from the WTO affect its sale?

- Of course, it will affect a lot of things. Now, grain exported from the territory of Ukraine is mixed with Russian grain. Of course, they will buy it, but with a big dumping. We are not losing markets, we are losing easy access to markets. There will be markets that are willing to work with gray products, but at a big discount. For example, India now buys our oil at a discount of more than 30%. So the grain will be able to sell at a discount of 5% - 60%.

We now have a budget surplus. And it will grow due to the physical growth of prices. Sales of hydrocarbons are falling, while prices are rising. Everything else will sag almost to zero. We will be sold through Iran.

Ruslan Grinberg, Scientific Director of the Institute of Economics of the Russian Academy of Sciences, Corresponding Member of the Russian Academy of Sciences

- Russia for many years sought to join the WTO, and now it is planned to withdraw from the organization. How do you rate such a decision?

- I think it would be a suicidal move. No matter how you treat the WTO, it is the main institution of the modern world economy. Therefore, if you are outside the institution, but continue to somehow communicate with the world economic community, then, of course, this is a big absurdity. There will be a problem with customs tariffs. You are out of the game because you are not a member of the club. This is not some artificial formation, but a working body. Of course, there are some conflicts, but they are investigated and resolved. Withdrawal from the WTO will entail external economic loneliness. I don't think this is the right move.

- How will the withdrawal from the WTO affect the industries - metallurgy, agriculture, the sale of hydrocarbons?

- It will be said in the way any country wants. Each country, if it decides, can raise customs tariffs for our products. It is an unprecedented story when you yourself withdraw from the WTO. No one else had such triumphalism. We have sued before. Sometimes they win, sometimes they lose. But it is not important. By leaving the WTO, we lose all tools for resolving disputes. I don't see any benefit from not being a member of the WTO.

- What are the pros and cons of WTO membership?

What does cons mean? If the rules of the game are the same for everyone, then this is a solid plus! When Russia joined the WTO, the main exports were hydrocarbons and metals. Therefore, they did not attach much importance to the conditions in those sectors whose products were not exported - agriculture, clothing products. It was a big mistake. It was necessary to provide that you will be able to export not only fuel and raw materials, but also finished products. If attention had been paid to this, it would have been possible to agree on more favorable terms. It was possible to fight for the creation of an export-import bank that exists in the United States. Such a bank would help the export of goods. All this should have been specified at the time of entry, but this was not done. Then there was an apology for the free market. Of course, the lower the rates, the better. But if you have less power, then you will lose.

Abel Aganbegyan, economist, Academician of the Russian Academy of Sciences, Academy of Sciences of the USSR, Corresponding Member of the British Academy,

I have a negative attitude to the idea of leaving the WTO. This is an international organization. Everyone is in step, and we will walk alone across the open spaces. All moments related to the special operation, sanctions are all temporary. There will be a truce, sanctions will be weakened. You can not act emotionally, off the shoulder. We need to think everything through. While we are selling gas, oil, metals, and grain abroad, it is wiser to do this within the framework of the WTO according to general rules. The WTO protects our interests. The WTO is a great organization that fights against dumping, excessive price increases, and regulates customs tariffs.

Of course you can isolate yourself. And a person can live alone. But what kind of life will it be? So is the country. A huge country can survive alone. We can have everything, but why? You need to live fully and do not make hasty decisions.

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