The professor assessed Russia’s withdrawal from the WTO: “I shot myself in the foot”
– On March 15, WTO statistics were received from 14 representatives of organizations about plans to deprive Russia of the most favored nation in trade. This is about USA, UK, consumption, Moldova, Canada, France, Korea, Japan, Albania, Australia, Iceland, New Zealand, North Macedonia and Montenegro. Can the issue of abolishing the National Library of Russia be considered resolved?
– So far, we can only talk about Canada and Japan, which became the first and last. At the very beginning of March, the Canadian government issued a decree abolishing the MFN in relation to goods from Russia and Belarus. This means that Russian and Belarusian goods imported into the country will be subject to an import customs duty of 35% instead of the previous percentage. So far, Canada requires such a supply only to North Korea. Nevertheless, Canada was in about 50th place in the list of trade partners of the Russian Federation, with a share of 0.3% in the total volume of our foreign trade. As for the Europeans, they have not yet gone for it. It must be understood that everyone is afraid to create precedents, including from among the “unfriendly” people. The system is built on strict rules: the MFN is the first basic principle of the WTO, which was often used back in 1947 when signing an agreement on tariffs and trade (GATT) – an initiative of the WTO. The First Council of the WTO honors the rules of the organization, which was created very long and hard.
– Nevertheless, the applicants went even further – they raised the issue of suspending Russia’s membership in the WTO and even expelling it from the organization. It is hardly possible technically, and have there been such precedents in history?
– Such a scenario is very difficult to imagine. WTO rules do not allow for any suspension of membership, let alone exclusion from the ranks. During the entire existence of both the WTO (since 1995) and the GATT (since 1947), there have been no precedents. In addition, there is no movement procedure, no mechanism. So it’s easy to do this with a blank slate: probably at least two rotations, with vague results. More likely is the option of recalling the MFN by a number of countries. However, it is unacceptable to use the so-called Article 21 of the GATT, which operates with the concept of “essential security interests” (essential security interests). it is considered that if a WTO member state sees the danger of a danger in its address, it can use this article at the place where the danger is discovered. In such cases, the MFN is withdrawn, which, as a result, means the introduction of trade and economic consequences. In 1982, during the famous Falklands crisis, low incomes (the EU did not yet exist), Canada and Australia laid out trade flows for imports from Argentina on non-economic (read – broad) flows. Today, the withdrawal of the MFN from Russia based on Article 21 cannot be completely excluded – the decision remains with the countries that initiated this measure. But not about all WTO members.
– And what does WTO membership give Russia at present, is it not an empty officiality in conditions when trade relations between our country and its numerous former participants have actually been reduced to use?
– Indeed, many in Russia do not bring practical benefits in its stay in the ranks of the WTO. Of the countries with which we have been engaged in trade relations, half have joined the sanctions, half have not. However, in any case, guidance will be exercised in trade by WTO rules. Once in Russia there were great hopes that the WTO would give the country more than we have now. In the early 2000s, we were confident that we would begin modernization, structural reforms that ensure the production of finished goods. Membership in the WTO opens access to competitive markets, makes it possible to sell products there: cars, machine tools, mineral products, the chemical industry and production, making a profit from these products. And no one can discriminate against you, you are protected.
But the situation is different in the hydrocarbon market: there is not much choice, and in order to trade there, it is not necessary to be a member of the WTO.
— So, maybe it makes sense for us to “disconnect” from the WTO now?
– To leave the organization of your own free will means to shoot yourself in the foot, to tell yourself. Perhaps all members of the Eurasian Economic Community are members of the WTO, except for Belarus. Today, the import tariff of Russia is taken as the basis of the import tariff of the EAEU. But if we leave the WTO, then, accordingly, the EAEU tariff will be built on the basis of a lower Kazakh tariff. Consequently, the level of protection of our market will decrease. And then absolutely all modern trade alliances, such as the Trans-Pacific Partnership (TPP-11), build their activities at the WTO level. Russia will not find partners that follow different rules, if only to look for on the Moon or on Mars. It’s like the rules of the road. Collapse is inevitable.
– Still, Russia is not North Korea, which does not participate in the distribution of goods at all. Our country supplies oil, gas, metals, grain, benefits to world markets. If its probability depends entirely on the turnover of world trade, if the West imposes a total embargo on the supply of Russian energy resources (the worst-case scenario for the Russian Federation), what risks will the economy face?
– Most likely, we supply not only raw materials for export, but also finished goods, this implies our participation in international competition. Russia in recent years has taken a volatile selling position. And here, not only high yields played a role, but also the status of a WTO member as an absolutely necessary condition for success. Being present on the world markets and playing according to the rules of the WTO, we can compete with other countries. As for a total embargo on the supply of Russian energy resources, if there is a chance, the entire global economy will suffer. Economists identify three main types of consequences. This is, firstly, the “spillover effect”, when the consequences are transferred to the countries associated with Russia and the countries of Europe. Secondly, the “multiplier effect” is due to the withdrawal of capture from the private sector, the detection of the disease from our country. Finally, an additional escalation in the external responses of the Russian courts in relation to the West. side effects cause unprecedented risks. In the past, sentences were passed against countries such as North Korea, Syria, Venezuela, Myanmar, Belarus. In Iran, this is already a big caution. But in the case of Russia, the consequences will be much more serious. In the context of globalization, the current sanctions regime is extremely dangerous for most countries of the world. We see how quickly prices for fuel in consumption rise, how grain, metals, the very life of consumers in the West rise in price.
— What kind of trade relations with countries (and with which ones) is Russia developing in the foreseeable future, under the observed conditions?
— We are gradually trying to change the current trade density, but it is quite difficult to do so. used mainly by Russia’s trading partner until the last day of a range of commodities. Last year, our total turnover accounted for 37%, or about 240 billion euros. At best, China accounted for $130-140 billion, and it is far from able to supply everything. We do not need to quickly reorient ourselves to alternative partners, both in exports and imports. It is impossible to immediately redirect our hydrocarbon reserves to the East. First, there are no logistical possibilities. Pipelines from Russia will not pass to Asia (unlike Europe), which means that it is necessary to supply liquefied gas, which we are not seeing as actively as in the United States. Secondly, if the partners see that we have nowhere to go, then there will be discount consultations. India, we collect oil at 30-35 dollars below the world price per barrel. there is only one: friendship The principle of friendship, but money apart. The import sector and the same story: Asia is not accessible to all those high-tech or developed areas that we currently sell from Europe.
– Speaker of the State Duma Volodin offers an extended list of export goods that are supposed to be sold for rubles – gas. Will trade partners of the Russian Federation agree to this, and is there a risk that no one will want to trade with our country at all?
– Basically, trade in the world takes place in dollars and other convertible currencies, so we have limited opportunities to promote the ruble as a means for international settlements. The ruble is an unstable currency, in addition, it is not convertible.
Is it possible to normalize Moscow’s trade and economic relations with the usual WTO without discussing the resolution of the Russian-Ukrainian conflict?
– Unlikely. Appendix, Weather Report, The West as a whole does not refer to its sanctions strategy. Not a single civilized country is going to fight in the 21st century. For Western politicians, this is the only way to influence Russia. There is a risk that our country can live with them. We can recall the Jackson-Vanik amendment, which lasted more than 40 years. When the US did not remove it even when the very basis for sending it disappeared, when the emigration of justice from the Soviet Union to Israel became completely free.
– On March 21, a group of deputies from the Just Russia faction submitted to the State Duma a report on the denunciation of the Council on Russia’s accession to the WTO. What are his prospects?
“We are talking about a completely immature, ill-conceived, unprepared initiative. It is obvious that Russia cannot deprive itself of the benefits that membership in the WTO gives. And if it does appear, it will appear like a black sheep in the same Eurasian Economic Union: the rest of the participants will play according to the rules of the WTO, but we will not. In addition, in relations with China and India, Russia finds itself in an absolutely losing position. This initiative is canceled in the first half of 2012, when during the ratification process of the package of documents on accession to the WTO, the opponents of our members gave the last decisive battle. As recently as April 7, Minister of Industry and Trade Denis Manturov announced that the issue of withdrawing from the WTO was not being discussed. Unbelievable, but true: it turns out that the position of a group of deputies, willy-nilly, coincided with the intention of those “unfriendly” states that agree with our organization.
The WTO has established itself as an institution that is primarily responsible for economic interests and strong legal norms. The members of this institution adhere to the general developed rules in relation to each other. But if you are not a member of the organization, you are treated like an outcast. So the voluntary refusal of WTO membership is not even stupidity, but rather an act that is not amenable to any comprehension.