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Russia’s accession to the WTO:
market access commitments
by Rūta Žarnauskaitė
DG Trade
2 February 2012, Riga
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Overview
• Main changes introduced by the WTO accession:
– Direct market access commitments
– Regulatory aspects
• Customs Union - practical effects
• Implementation and Enforcement
• The terms of Russia’s WTO accession are publicly available at:
http://www.wto.org/english/thewto_e/acc_e/a1_russie_e.htm
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Market Access Commitments /0
• Goods:
– Import duties
– Export duties
– TRQ regimes
– Subsidies
• Services
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Market Access Commitments /1
• Import duties: – Average FBR – 7.8%: Industry 7.3% - Agriculture 10.8%
– Reduced from the average applied rate of 10% in 2011
– The lowest amongst BRIC countries
– Implementation periods for nearly half of tariff lines
– Sectors which will benefit most: • ITA: Ave FBR 0%; reduction by 5.5%
• Ceramics: Ave FBR 12.2%; reduction by 5.4%
• Vehicles and parts: Ave FBR 8.3%; reduction by 4.2% – (BUT 7-year IP)
• Paper: Ave FBR 7.6%; reduction by 3.7%
• Also Textiles (7.7%), Pharmaceuticals (4.3%), Glass (11.1%) will benefit from approx. 2% reduction
• Ave FBR for Medical, Agricultural and Construction equipment, Footwear and Chemicals will be bound at 4-5%
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Market Access Commitments /2
• Effects of Import duty decrease: – Customs duties foregone – worth 2.5 bi EUR/a
– Addition trade stimulated – worth 3.9 bi EUR/a
• Some sectoral examples: – Vehicles: save 622 mi EUR/a + new trade 1.8 bi
EUR/a (BUT – transitional TRIMS)
– Agriculture: save 247 mi EUR/a + new trade 281 mi EUR/a (BUT see SPS & customs regime)
• Milk Products: 45 mi EUR/a + 56 mi EUR/a
– ITA products: save 143 mi EUR/a + new trade 141 mi EUR/a
– Paper and wood working: save 102 mi EUR/a + new trade 75 mi EUR/a
– Pharmaceuticals: save 49 mi EUR/a + 37 mi EUR/a
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Market Access Commitments /3
• Export duties:
– “Untraditional” commitment to bind rates for 700-odd
products – part of Goods’ Schedule
– Mainly concerns raw materials:
• Gas/oil products, plastic, hides and skins, precious
stones and metals, base metals, fish etc.
– Commitments stronger than those of KSA, Ukraine but
not going as far as with China
– Will stop the tendency to use XD as industrial and fiscal
measure of 2007-2009
– “Unbound” products subject to bilateral Agreement on
raw materials
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Market Access Commitments /4
• TRQ regimes: – Russian exports of coniferous wood
• EU specific quota reserved
• Licensing management elaborated in bilateral Agreement and Protocol
– Meat products in-quota vs out-of-quota rates
• Beef: 15% vs 55% (EU specific quota reserved)
• Pork: 0% vs 65 (BUT flat MFN rate 25% from 2020)
• Some Poultry products: 25% vs 80% (EU specific quota for Boneless Poultry Meat)
– Some whey products: 10% vs 15%
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Market Access Commitments /5
• Agriculture Subsidies:
– Domestic Support:
• Capped at 9 bi USD in 2012
• Gradually reduced to 4.4 bi USD by 2018
– Export subsidies bound at zero
– Currently applied VAT exemptions will have to
be eliminated
• Industrial Subsidies:
– No exemption granted
– All subsidies will have to be WTO-compatible
from the date of accession
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Market Access Commitments /6
• Services commitments: – Very important opening in certain key sectors:
• Financial (insurance, banking, securities..)
• Telecommunication
• Transport
• Postal – Courier
• Distribution
• Tourism
• Professional services (legal, auditing, architectural, engineering, medical..)
• Construction
• Energy related (only consulting on services incidental to mining and distribution)
• Computer services - etc.
• Mode 4 – movement of intra-corporate transferees and business visitors
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Regulatory Aspects /0
• Trading rights
• Customs Facilitation
• Pricing Policy
• Intellectual Property Protection
• Government Procurement
• State-trading Enterprises
• Sanitary and Phyto-sanitary regulation*
• Technical Barriers to Trade *
• Trade Related Investment measures *
• Transparency
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Regulatory Aspects /1
• Trading rights
– Registration rights defined
– Licensing disciplines:
• Import Licensing Agreement – full application
from the date of accession
• Abolition of unjustified use of non-automatic
licensing (alcoholic beverages,
pharmaceuticals, goods with encryption
technologies)
• Defined use of automatic licensing (permits)
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Regulatory Aspects /2
• Customs Facilitation: – Customs Valuation Agreement applies from the date of
accession
– Abolition of use of reference or minimum prices at customs valuation
– Efficient procedures at the customs
– Proportionality and non-discrimination while applying procedures
– Abolition of unjustified imposition of product-specific customs check-points
– Not permitted to impose country-specific customs check-points (import or export) unless rules permit
– Transparency and justification for customs fees (commensurate to services rendered)
– Energy goods subject to common transit rules
– Effective right of appeal against administrative decisions
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Regulatory Aspects /3
• Pricing Policy (WTO+):
– General commitment
• not to use pricing policy to afford protection to domestic
goods industry or undermine services concessions
– Railway transportation:
• National treatment for import and export from 1 July 2013
• Full application of Art V GATT for transit
• Transparency on transit fees
– Gas pricing:
• Application of “cost + investment + profit” formula for gas
supplied to domestic industrial consumers
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Regulatory Aspects /4
• Intellectual Property Protection:
– Full application of TRIPS from the day of
accession = respect of key rights for :
• copyrights holders, software, motion pictures, sound
recording, patents, trademarks, trade secrets, test data..
– National treatment with regard to fees for
patents and TM registration
– Enforcement commitments
• Ex-officio actions
• Actions against piracy, including via internet
• Fair and equitable administrative procedures, border
measures and criminal procedures
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Regulatory Aspects /5
• Government Procurement:
– Intention to join the GPA
– accession talks should start within 4 years
after accession
• State-trading enterprises:
– Act in line with WTO rules when engaged
in commercial activities
– Notification commitment
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Regulatory Aspects /6
• Transparency: – To ensure transparent and predictable trade and
investment climate
– Introduced definition of normative legal acts (not letters,
telegrams, teletype messages etc.)
– Obligations:
• To publish draft legislation for public consultation well in
advance of adoption
• To promptly publish acts once adopted
• No entry into force of legislation prior to publication
• To establish enquiry points for public queries
• Ensure notification of measures (privatisation programme,
customs fees, state set prices, TRIMS, Subsidies, Rules of
Origin, Licensing requirements, TDI etc.)
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Customs Union - practical effects
• Intra-CU Agreement on Multilateral trading system – All Russia’s obligations become part of the CU legal
framework
– Extrapolation of WTO disciplines to KAZ and BEL in common policies
• Common policies in tariffs, Customs, SPS, TBT, Licensing, TDI, FEZs etc.: – Common regulation adopted by the central bodies to
replace national regulations • issue of conflicting norms
• transitional arrangements
– BUT – often national competences to implement common regulations
• Common external border control
• Redefined export-import-transit
• Recourse to Evrasec Court
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Implementation
• Prior to accession:
– Regular bilateral meetings (dialogues, co-
operation, high level contacts, Summits
etc.)
• After accession:
– Notifications and work in WTO regular
bodies
– Regular Trade Policy Reviews
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Enforcement
• Key to collect full information and timely: – Important role to business
• Contacts with Member States authorities
• Contacts with EU Delegation in Moscow
• MA committees work
• Direct contacts with Commission
• Trade Barrier Regulation
• Soft instruments: – Bilateral pressure (consultations, high level
contacts, etc.)
• Legal instruments: – Bilateral dispute settlement where applicable
– WTO dispute settlement
