Does Russia No Longer Qualify as a Member of the Global Trade Group WTO?

By Kester Kenn Klomegah*

MOSCOW | PARIS (IDN) — Russia joined the World Trade Organization (WTO) in April 2011 after almost 18 years of persistent efforts and multiple negotiations, to fulfil stringent membership requirements, apparently because the Soviet Union had ceased to exist and replaced by the Russian Federation. Average accession period is five to seven years.

Now, WTO and even the Group of 20 are prepared to kick Russia out of these prestigious global organizations due to its “special military operations” aimed at—as President Vladimir Putin says—”demilitarization and denazification” in Ukraine.

The G7 countries and allies have already stripped Moscow of its privileged trade treatment at the WTO, known as “most favoured nation” status, clearing the way for them to hit Russian imports with higher tariffs or ban them entirely.

In the early years of Vladimir Putin’s presidency, communist-oriented Russian business saw the WTO as a threat in the system of global trade instead as an instrument to stimulate the economy further for foreign investors. Russia’s leaders did not really understand the benefits of its membership but have a clear vision of the limitations that the WTO imposes in terms of public procurement and transparency.

Global media reports this month (March) said the United States, the European Union and largely western allies have blocked Belarus’ bid to join the World Trade Organization, explaining further that its complicity in Russia’s invasion of Ukraine makes it unfit for membership in the global trade group.

Long before the Russia-Ukraine crisis, the western group halted work on Belarus’ WTO accession process after President Alexander Lukashenko crushed protests following his 2020 re-election that opponents say was fraudulent. And, then came alliance between Belarus and Russia against neighbouring Ukraine.

We condemn Belarus for its complicity in Russia’s aggression, which is incompatible with the values and principles of the WTO and of a just rules-based order. For these reasons, we have concluded that Belarus is unfit for WTO membership. We will not further consider its application for accession,” the WTO said.

Several trade experts interviewed by IDN-InDepthNews, explicitly maintained that the current global situation is marked by contradictions between Russia’s national interests and its partners’ interests, as well as strains in Moscow’s ties with some neighbouring countries. Perhaps, in the emerging global economic crisis, it is better for Russia to stay outside the WTO.

Russia is meanwhile implementing new legislation related to trade and amending the present one. Considering that Russia needs to enter into new bilateral negotiations on market access for goods and services, the ongoing process is quite technical, and Russia will from now on be viewed as country in its own driving seat, no longer as part of the global community, the experts explained to IDN.

Moscow remains unperturbed and defiant. Reactions from the Kremlin, the executive and legislative chambers described efforts to isolate Russia as anti-Russian steps as part of the “sanction-spree” that would not have planned adverse effects.

In fact, US President Joe Biden’s call for expelling Russia from the G20, or Moscow walking out of the Group at its own initiative, Presidential Press Secretary Dmitry Peskov said the Group’s possible decision to halt cooperation with Russia would not cause any irreparable damage to the county and its economy.

“As far as concern about the G20 format, it is important, but on the other hand, in the current conditions, as most of the participants in this format are in a state of economic war with us at their own initiative, no deadly harmful will happen,” Peskov said.

He added: “In any case, Russia bears in mind the opinions of the other participants in this format and will stand ready to take part, if this is possible. If this is not possible, then, as we say, nothing deadly harmful will happen. As all the WTO (World Trade Organization) rules and international law are being breached, it’s necessary to build new avenues of relations in all areas.”

Officials at the Ministry of Foreign Affairs have reacted similarly. Russia’s departure from the WTO would be counterproductive, Dmitry Birichevsky, director of the Russian Foreign Ministry’s Department for Economic Cooperation, said. “I am certain that departure from the WTO is counterproductive. It won’t bring our economy any dividends. Fully-fledged membership in the WTO allows our country to participate in the development and refinement of global trading rules, promote national priorities in the trade-economic sphere,” Birichevsky said on the Rossiya 24 television channel.

If Russia refuses to participate in the WTO, customs duties in the Eurasian Economic Union will go down and will automatically correspond to Kazakhstan’s obligations in the WTO, which are lower than Russia’s, Birichevsky said. “In the end, Russia will be obligated to further observe the rules of this organization as a member of the Eurasian union, but it won’t be able to make use of its advantage,” he said.

From Paris, Secretary of State for Foreign Affairs at the French Foreign Ministry, Clement Beaune reiterated on the BFM TV channel the that European Union together members is seeking to deprive Russia of the most favoured nation treatment within the framework of the WTO.

“Together with the United States, the United Kingdom and other G7 partners, the EU countries are seeking to deprive Russia of the privileged status in trade that it has in the WTO,” he said.

Referencing Russia’s February 24 decision to carry out “a special operation” in Ukraine, and the absolute necessity for slapping sanctions against Russia, physical and legal entities, Clement Beaune noted that it concerns the abolition of privileges for Russia, which provide a simplified customs regime in a number of areas of international trade.

WTO has 153 members, and negotiations on the admission of a new member are held within a working group that unites countries that have unsettled trade problems with the candidate. It was established on January 1, 1995, as the successor to the General Agreement on Tariffs and Trade (GATT) that had been operating since 1947. It is the only international body now supervising world trade.

* Kester Kenn Klomegah is a frequent and passionate contributor to IDN. During his professional career as a researcher specialising in Russia-Africa policy, which spans nearly two decades, he has been detained and questioned several times by federal security services for reporting facts. Most of his well-resourced articles are reprinted in several reputable foreign media. [IDN-InDepthNews – 27 March 2022]

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