RUSSIAN ACCESSION TO THE WTO

1. RUSSIAN ACCESSION TO THE WTO

2. GOALS: • Improvement of existing conditions for access of Russian products to foreign markets and provision of non-discriminatory treatment for Russian exporters; • Access to the international DSM; • Creation of a more favorable climate for foreign investments as a result of legal system change in accordance with the WTO standards; • Expansion of opportunities for Russian investors in the WTO member-countries, particularly, in the banking area; • Creation of conditions for growth of domestic production’ quality and competitiveness; • Participation in negotiations of the international trade agreements taking into account national interests; • Improvement of the image of Russia as a competent international trade participant

3. ACCESSION PROCEDURE • 2 STAGES: INFORMATIVE AND NEGOTIATIONS • APPLICATION TO THE GATT – 1992 • NEGOTIATIONS: 1995 • WORKING PARTY GATT - WTO • MOST ACTIVE PROCESS – SINCE 1998: FIRST COMMITMENTS ON TARIFFS • 1999 - first draft of Specific Commitments on Services with the List of Exemptions from the Most Favored Nation (MFN) was submitted to WTO members. • 2000- Negotiations have been full-scale: covering all the aspects of Russia’s accession to the WTO.

4. WORKING PARTY: 67 member countries (EU counts as one) in the Working Party on Russia's WTO accession involved in the negotiations, over 50 of them are involved in the negotiations on goods market access and more than 30 ones - on services market access. • Mandate: studying the trade regime in Russia and working out requirements for Russia's participation in the WTO.

5. MAIN TOPICS FOR THE NEGOTIATIONS 1. ACCESS TO THE GOODS MARKET 2. NEGOTIATIONS ON THE AGRICULTURAL ISSUES 3. NEGOTIATIONS ON THE SERVICES MARKET ACCESS 4. NEGOTIATIONS ON SYSTEMIC ISSUES

6. ACCESS TO THE GOODS MARKET • The main subject: setting the maximum level of import customs duties, which Russia will have the right to apply to after WTO accession. • At present are completed with practically all members of the WP: the EU, China, Korea, New Zealand, Venezuela, Mexico, Norway, Argentina, Brazil, Japan, India, Canada and others. • 10 WTO members will support Russia’s accession to the WTO without conducting bilateral talks (Armenia, Hong Kong, Kuwait, Morocco, Republic of South Africa and etc). • The initial binding level of customs duties is not lower for any single rate of duties than the level existing now. • |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, during the transitional period - the right to increase the rates of duties for some of them. • Tariff quotas to three types of meat (beef, pork and poultry meat) in amounts that satisfy the Russian side (today’s level plus 2-2,5 per cent of annual growth) and with sufficient levels of tariff protection has been fixed until 2009 inclusive.

7. NEGOTIATIONS ON THE AGRICULTURAL ISSUES • The level of domestic support for the agricultural sector (within the “yellow basket”) and agricultural and food export subsidies. • 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. • The latest round of consultations - on March 1, 2007. • RF: arguments in favor of fixing the Russian obligations concerning the amounts of agricultural support on the basis of the 1993-1995 data, • WP:lack of readiness to accept 1993-1995 as the base period.

8. NEGOTIATIONS ON THE SERVICES MARKET ACCESS • Protocols on access to the services market with practically all WP members, with whom bilateral negotiations were conducted: the European Union, the USA, China, Korea, Taiwan, Thailand, Turkey, Chile, Singapore, Venezuela, New Zealand, Mexico, Norway, Ecuador,  Bulgaria, Egypt, Canada, Japan, India, Paraguay, Uruguay, Switzerland, Brazil, Australia, Panama, Dominican Republic, Honduras. • Particularly tough on such sensitive sectors as the financial, “energy” and telecommunications markets • Some countries are interested in improving the conditions of access to the Russian market for individual suppliers of services (India, Canada, Switzerland).

9. NEGOTIATIONS ON SYSTEMIC ISSUES Draft report of the WP – the key document, which includes rights and obligations, Russia will assume as a result of all negotiations The WTO countries’requirements- three groups : 1) Russian legislation and law-enforcement practice not being in compliance with the WTO regulations: certain provisions of the current legislation on the customs, excessive demands to imported goods concerning the certification and conformity confirmation, procedures in the area of sanitary, veterinary and phytosanitary control etc. This is a standard requirement. 2) Russia's application of some regulatory aspects, which are basically allowed in the WTO, may be stipulated by certain requirements or commitments set forth in the Working Party Report. These requirements are "subject to negotiations". 3) Requirements which are clearly beyond the scope of WTO commitments (the so-called "WTO+" requirements) such as joining the agreements on government procurement or civil aircrafts, abolition of export duties and etc. Besides, in the framework of the discussion of systemic issues some WP members are trying to resolve problems of purely bilateral trade and economic relations outside the reference of the WTO.

10. The basic elements of the Working Party’s inquiries on systemic issues • Liberalization of measures of non-tariff regulation: licensing rules, especially in such areas as imports of alcoholic and pharmaceutical products into Russia, the regime of exports of diamonds and metals of the platinum-containing group, the imports of communications means and ciphering equipment. • Bringing the regimes of technical barriers in trade and sanitary and phyto-sanitary measures in Russia in line with the WTO rules, (primarily in part of mandatory certification and registration). • The joining of non-mandatory WTO agreements (including trade, civil aviation equipment and government purchases). • Ways of brining the legislation and practice of applying laws in the field of protection of intellectual property in compliance with WTO rules. • The abolition of “national component” term in investment agreements. • The implementation of purchase-sale deals by state trade enterprises on a commercial basis as well as equal participation of foreign companies in such deals.

11. “Double-pricing” on energy products • the position of the Russian side was fixed in the wording for the WP’s report and in bilateral agreements with the European Union

12. Plan for bringing legislation of the Russian Federation to conformity with rules and regulations of the World Trade Organization. • Provides for elaborating a series of draft laws, which would enable to solve the problem of legislation discrepancy with WTO provisions. • In the whole fulfilled •  Regional interest: more than 190 meetings (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 63 RF subjects in 2001-2007.