Eurasian Integration Yearbook 2012

2011: Data and ReviewsRussia accedes to the WTONovember 10, 2011The WTO Working Party has approved Russia’s accession to the WTO. Aformal decision on Russia’s WTO membership will be adopted at the WTOMinisterial Conference on December 15-17. According to Maxim Medvedkov,head of the Russian Delegation at the WTO accession negotiations, Russia willhave six months to ratify the WTO membership agreement, which comes intoforce one month after the ratification date, so Russia will become a full WTOmember in summer 2012.According to information on the WTO website, the average import duty inRussia will decline from 10% to 7.8% by 2020: from 13.2% to 10.8% foragricultural products, from 9.5% to 7.3% for industrial goods, from 19.8% to14.9% for dairy products, and from 15.1% to 10% for cereal crops. Duties oncars will be reduced from 15.5% to 12%, on electric vehicles – from 8.4% to6.2%, and on wooden and paper products – from 13.4% to 8%.Duties will be reduced gradually. First of all Russia will have to bring down itsanti-recessionary duties (e.g., on chemicals and metals), and as soon as Russiabecomes a WTO member, duties on new motor cars will be reduced from 30%currently to 25%, and further to 15% within the next seven years.Officials believe Russia is joining the WTO on advantageous terms. Lowerduties on foodstuffs are unlikely to seriously affect the domestic market, whilehigher duties on motor vehicles will be in place until the year 2018. Moreover,Russia has undertaken to reduce federal subsidies to the agricultural sector from$9 billion in 2012 to $4.4 billion in 2018.Contrary to expectations, there will be no reform of the gas market.Under WTO terms and conditions, the government is allowed to regulatedomestic gas prices as long as they bring profits to the national gas utility,Gazprom. Moreover, the gas giant will remain a monopoly in terms of gasexports.With regard to the banking sector, Russia’s WTO membership terms state thatforeign banks are allowed to operate via their subsidiaries but may not openbranch offices and foreign capital in the Russian banking sector may not exceed50%. Foreign insurers will be allowed to open branch offices nine years afterRussia’s accession to the WTO.Russia has promised to lift all restrictions on foreign capital investmentin its telecommunications sector by 2015. This industry is listed asstrategic and companies taking a controlling stakes in telecommunicationscompanies in Russia must have their investments approved by thegovernment.254 EDB Eurasian Integration Yearbook 2012