The European Union has welcomed Russia's accession to the World Trade Organization (WTO), and described it as "a major step for Russia's further integration into the world economy."
EU Trade Commissioner Karel De Gucht said: "It will facilitate investment and trade, help to accelerate the modernization of the Russian economy and offer plenty of business opportunities for both Russian and European companies. I trust that Russia will meet the international trading rules and standards to which it has committed."
After 18 years of negotiations, Russia joined the WTO as its 156th member on Wednesday. The accession is particularly important for the EU, which is Russia's first trading partner and Russia the EU's third trading partner. For the first time both entities will be bound by multilateral rules and obligations for their mutual trade.
The WTO accession will have a positive impact on the conditions of trade and investment between Russia and the EU, the latter said in a statement. The geographical position of Russia and the importance of its market in terms of volume and growth make it a very important trading partner of the EU. As a consequence of the WTO accession, Russia will amongst others lower its import duties, limit its export duties, grant greater market access for EU services providers and facilitate rules and procedures in many areas affecting bilateral economic relations. Of particular importance will be regulations on customs procedures, the use of health and sanitary measures, technical standards and the protection of intellectual property, the statement added.
Russia will be subject to WTO rules in all these areas, including its monitoring and enforcement mechanisms. The EU, together with its international partners, is in contact with Russia to ensure that it respects these WTO commitments.
The EU expressed concern that "certain recently implemented or proposed legislation seems to be at odds with Russia's commitments and would stand in the way of other WTO members fully realizing the benefits expected from Russia's WTO accession." The EU is particularly concerned about the proposed new legislation providing for a car recycling fee which could discriminate against imported vehicles and hopes that this legislation will not be adopted.
EU exported goods worth EUR 108.4 billion to Russia and imported goods worth EUR 199.5 billion from Russia in 2011.
The main exports of the EU to Russia are cars (EUR 7 billion), medicines (EUR 6 billion), car parts (EUR 3.5 billion), telephones and parts (EUR 2.5 billion) and tractors (EUR 1 billion). The EU imports from Russia cover mainly raw materials. The main imports are oil (crude and refined: EUR 130 billion) and gas (EUR 24 billion). For these products, as well as for other important raw materials, Russia committed to limit its export duties.
The main changes related to Russia's WTO accession concern market access improvements for goods and services. Import duties for goods will decrease from a current average of ten percent to an average 7.8 percent. In some important sectors, such as automotive, import duty reductions are more significant. It is estimated that the overall tariff reduction will result in savings of EUR 2.5 billion annually in import duties for EU exporters. Furthermore reduced tariffs are estimated to stimulate EUR 3.9 billion of additional EU exports to Russia per year.
In the telecommunications sector, Russia will phase out its current equity caps (49 percent) for foreign investors within four years. Furthermore, the WTO accession of Russia covers a range of regulatory issues including sanitary and phyto-sanitary rules, customs and intellectual property rights.
The EU is the largest foreign investor in Russia, with investments worth around EUR 120 billion in 2010. Russian investments in the EU amounted to EUR 42 billion in 2010.
by RTT Staff Writer
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