In 1993, Russia applied for accession to the GATT. In compliance with the procedures, a Working Party on Russia’s accession to the GATT was created, transformed after the establishment of the World Trade Organization (WTO) in 1995 into the Working Party (WP) on Russian Federation’s accession to the WTO. Mandate of the WP consists in studying the trade regime in Russia and working out requirements for Russia's membership in the WTO.

Russia's WTO accession negotiations started in 1995. Initially, they were focused on a detailed study of the trade and political regime in Russia at multilateral level in terms of their conformity with the WTO rules and regulations.

Submitting initial tariff offers on goods and offers on government support for agriculture in 1998 Russia started talks at a bilateral level. In 1999 the first draft of Specific Commitments on Services with the List of Exemptions from the Most Favored Nation (MFN) regime was submitted to WTO members. Negotiations have been full-scale, which means covering all the aspects of Russia’s accession to the WTO, since 2000.

At the present stage there are 60 member countries (27 EU members count as one) in the Working Party on Russia's WTO accession (in December 2003 Stefan Johanesson, Iceland’s Ambassador to the WTO, was appointed a new chairman of the WP). In February 2007 Vietnam joined the Working Party, in May 2007 – Saudi Arabia, In May 2008 –Ukraine. Over 50 WTO members are involved in the negotiations on tariffs and more than 30 ones - on services market access. Following the results of such talks their completion is formalized by signing relevant bilateral protocols.

According to the established procedures negotiations on systemic issues are held at the WTO Secretariat in Geneva at a multilateral level (formal and informal meetings of the Working Party, talks on agriculture and on a series of pressing issues, informal consultations with the interested Working Party members. Negotiations at bilateral level on access to the goods and services markets are held in Geneva, Moscow or respective capitals of our partners.

Documents and proposals, approved by the Russian Government, form the basis for the negotiation process. In the framework of the accession process the Russian delegation in charge of accession to the WTO is holding negotiations on four major issues.

1. Negotiations on access to the goods market

The main subject of negotiations is setting forth of the maximum level of import customs duties, which Russia will have the right to apply to after WTO accession.

At present negotiation on access of foreign goods to the Russian market are completed with all members of the WP, which expressed their willingness to take part in such negotiations.

In the framework of the bilateral agreements already reached by the Russian delegation the initial binding level of customs duties is not lower for any single rate of duties than the level existing now, and during the first year after Russia’s accession to the WTO not a single rate of duty will be reduced in comparison with the present rate.

 The level of customs protection for agriculture is not reduced for any of the basic agricultural products, and during the transitional period Russia even has the right to increase the rates of duties for some of them. The right of the Russian Federation to apply tariff quotas to three types of meat (namely beef, pork and poultry meat) in amounts that satisfy the Russian side (today’s level plus 2-2,5 per cent of annual growth).

Import tariffs on industrial goods will also decrease by about three percentage points.  The initial binding level is 10,1%, the ultimate one – 7,6% and the present one  - 10% (in particular, maximum reduction of duties is fixed for manufacturing equipment). These indicators for goods (the weighted average rate of import duties) are respectively 14.8%, 11.5% and 12.9%

2. Negotiations on agricultural issues, alongside the tariff aspect, include discussions of the levels of domestic support for the agricultural sector (within the framework of the so-called “yellow basket”) and agricultural and food export subsidies. Such issues are usually discussed at multilateral consultations, in which members of the Quadro Group (the United States, the European Union, Japan and Canada), the Cairns Group of states (the leading liberally minded exporters of agricultural products) and other interested states take part. These negotiations are extremely complicated.

A multilateral meeting on agriculture was held on April 22, 2008.  At this meeting there was a discussion of previously distributed documents on “amber” and “green” baskets and also refined tables on the support volume for the years 2001-2003, 2004-2006.

On April 23 and on June 18, 2008 Russian Minister of Agriculture Aleksey Gordeev took part in negotiations on agriculture. The Minister presented arguments supporting Russia’s stance in the negotiations on agriculture. He emphasized the need to agree on earlier announced level of agricultural support in order to put into practice the State Program of Agriculture Development and Regulation of Agricultural, Raw Materials and Food Markets for the years 2008-2012 (9 billion dollars)Following the meeting it was decided to continue negotiations to reach acceptable commitments to Russia and WTO members' on State support for agriculture.

In general, technical work on agricultural issues is nearing completion. The WTO Secretariat is now preparing a draft chapter of the WP report, which contains Russian final commitments on agriculture. It is expected that the work on the draft chapter, as well as on the level of commitments on agricultural support could be completed within the next few months.

3. Negotiations on the services market access are aimed at coordinating positions on the access of foreign services and services suppliers to the Russian services market. At present protocols on access to the services market are signed with all WP members,.

Russia agreed to take commitments (i.e. to open to some extent a certain sector) on nearly 115 service sectors out of 155 sectors under WTO classification. In some cases, Russia’s stance provides for tougher conditions of work with foreign suppliers in the Russian market compared to the conditions provided by applicable laws (for example, services related to energy, some transport and medical services and others). Such a position will allow using, if necessary, additional instruments of protecting national suppliers from foreign competition in future.

4. Negotiations on systemic issues are aimed at setting forth the measures which Russia is to implement in the legislation and its application as a WTO member.

The talks are based on the draft report of the Working Party – the key document, which includes rights and obligations, Russia will assume as a result of all negotiations.

At present work on systemic issues is focused on discussing the draft report.

In June-July 2008 a multilateral discussion of the WP’s new draft report which had brought together the results of negotiations since 2004, consultations with interested delegations on Russian commitments in the field of agriculture, technical regulation, sanitary and phytosanitary measures and other systemic issues were held. Eight rounds of trilateral consultations were held with US and EU delegations. Following the consultations it was managed to bring together the parties' stances on customs administration, trade technical barriers, measures to protect the domestic market and other issues.

A regular version of the WP’s report on Russian Accession to the WTO was published on August 14, 2008. On November 24, 2008 a multilateral discussion of this document was held.

Issues of Russia’s WTO accession are kept under permanent observation by the federal executive and legislative bodies of the Russian Federation.

Commission of the Russian Federation Government on the WTO Issues was formed in August 1997. In July 2004 it was transformed into the Governmental Commission on Issues of the World Trade Organization and Interaction with the Organization for Economic Development and Cooperation, which is currently headed by the First Vice Prime Minister of the Russian Government Igor Shuvalov. This body is composed of the representatives from the key ministries and departments. Coordination of the WTO accession process and elaboration of the Russian negotiating position is a major function of the Commission.

Bringing the Russian legislation in line with the WTO rules is the key element of Russia’s efforts at home.

In 2000 the Expert Council for Foreign Trade Legislation and Foreign Investment (in 2004 it was renamed the Expert council for foreign economic activity regulation) was established at the State Duma Committee for Economic Policy and Entrepreneurship in order to find out what the state authorities, NGOs, scholars, businessmen and law experts think about Legal regulation of foreign investment and foreign trade in terms of WTO requirements and about coordination of the legislative work related to the WTO accession.

Decree of the government of the Russian Federation dated August 8, 2001 # 1054 approved a Plan for bringing legislation of the Russian Federation to conformity with rules and regulations of the World Trade Organization. The Plan provides for elaborating a series of draft laws, which would enable to solve the problem of legislation discrepancy with WTO provisions.

By the present time this plan of actions was in the whole fulfilled, with the passage, among others, of the new version of the Customs Code of the Russian Federation (May 28, 2003, No 61-FZ), the laws On the Foundations of State Regulation of External Trade Activities (May 28, 2003, No 61-FZ), On Special Anti-Dumping and Compensatory Measures During the Importation of Goods (December 8, 2003, No 165-FZ), On Currency Regulation and Currency Control (December 10, 2003, No 173-FZ), On Technical Regulation (December 27, 2002, No 184-FZ), a set of laws on intellectual property rights protection, “On the Introduction of Amendments to the Customs Code of the Russian Federation Dealing with Customs Fees” (of the 11th of November, 2004, N 139-FZ), “On the Introduction of Amendments and Additions to the Russian Federation Law on Customs Tariffs” (of the 8th of November, 2005, N 144-FZ), package of laws on intellectual property rights protection and others. Examination of departmental acts and regional legislation with the purpose of determining their conformity with the WTO requirements is under way.

To complete this work the following bills should be approved: “On amending the Law “On licensing of certain types of activities”, “On amending the Law “On technical regulation”, a draft decree of Russian President and resolutions of Russian Government which establish a procedure for cryptographic tools import in the Russian Federation, a bill “On amending the Law “On Drugs“ and Part IV of the Civil Code. Several amendments aimed at strengthening intellectual property rights protection should be taken to the Customs Code.

Consultations between the Russian delegation and representatives of the Commonwealth of Independent States (CIS) member countries are conducted on regular basis. Decisions aimed at improvement in the EurAsEC countries interaction at the WTO accession talks were taken in 2002–2006 during the EurAsEC meetings at the heads of state level. The EurAsEC Intergovernmental Council discussed these questions at the heads of government level.

A large-scale information effort is undertaken in order to discuss the Russian position at the negotiations about the WTO accession with the representatives of Russian business circles. Since 2000 the representatives of the RF Ministry for Economic Development and Trade have conducted about 600 meetings on this subject with various organizations of exporters, importers and producers of goods. Apart from that, there have been regular consultations with the Russian Union of Industrialists and Entrepreneurs (RUIE) and the RF Chamber of Commerce and Industry (CCI), as well as with the representatives of research and social bodies.

More than 380 meetings (such as round-table discussions, conferences and workshops) dealing with the WTO issues, export support and access of Russian goods to foreign markets were conducted in all federal regions and 64 RF subjects in 2001-2007. These meetings were organized by the Ministry for Economic Development in collaboration with the State Duma committees, RUIE, CCI, regional administrations and business communities. From 2004 to  2008 the Ministry had carried out training sessions for civil servants in 44 regions on practical aspects of the forthcoming membership in the WTO.

Russian scientists and experts carried out a large number of composite works which contain analysis on the consequences of Russian WTO Accession. Some of them were prepared by independent experts contracted by Russian Ministry of Economic Development. There are some works that could be marked out: «National economic consequences of Russia's accession to the WTO» prepared by the National Investment Council together with Russian Academy of Sciences (2002), «Development of socio-economic impact forecasts of Russian Accession to the WTO» prepared by the State University - Higher School of Economics (2003), «Analysis and assessment of the possible economic impact of Russian accession to the WTO for the most sensitive industries and sectors of Russian economy, taking into account the regional dimension» prepared by the State University - Higher School of Economics on the basis of concluded bilateral negotiations in 2007.

General conclusions of independent experts show that accession to the WTO won’t provoke systemic problems in any sector of Russian economy. Some enterprises, that are no longer competitive, may face problems in the short run. However, this factor will influence insignificantly the growth rate of the economy and its individual industries. This influence is often not higher than the value of statistical error. Other factors, such as exchange rates fluctuations, global economic environment and investment activity will affect Russian economy to a much greater extent. However, all experts agree that in the long run Russia's membership in the WTO will have a positive impact on Russian economic growth, promoting trade and investment, encouraging competition on the domestic market, creating a clear international legal framework in the field of foreign trade regulation.

December 2008