EU expects Russia’s WTO accession to significantly improve bilateral trade
The EU has welcomed Russia’s accession to the World Trade Organisation (WTO) after 18 years of negotiations, particularly since the two countries have a strong trading partnership.
Russia is important to the Union by merit of its size and geographical location, and the volume and growth potential of its market. The EU is Russia’s first trading partner, and Russia is the EU’s third. The EU is also the largest foreign investor in Russia, with investments in 2010 amounting to nearly €120bn.
EU’s trade commissioner Karel De Gucht said: “Today’s WTO accession is a major step for Russia’s further integration into the world economy. It will facilitate investment and trade, help to accelerate the modernisation of the Russian economy and offer plenty of business opportunities for both Russian and European companies.”
The EU expects that WTO accession will have a positive impact on the conditions of trade and investment between Russia and Europe, thanks to lower import duties, limits to export duties and easier market access for EU services providers.
EU’s exports to Russia last year amounted to €108.4bn, and imports from Russia came to €199.5bn, bringing the total volume of trade in goods to €308bn. The EU’s main exports to Russia include cars, medicines, car parts, telephones and tractors; in exchange, the main imports are oil and gas.
The EU notes regulations on customs procedures, the use of health and sanitary measures, technical standards and the protection of intellectual property as particularly important areas of development.
WTO accession will have the greatest impact on market access improvements for goods and services. The import duties for goods will decrease from a current average of 10% to an average 7.8%.
It is estimated that the overall tariff reduction will result in annual savings of €2.5bn in import duties for European exporters, leading to €3.9bn of additional European exports to Russia per year.
But Europe also cautions that some recently implemented or proposed legislation may be at odds with Russia’s commitments, which would stand in the way of other WTO members fully realising the expected benefits. A particular concern regards a proposed new legislation for a car recycling fee, which could discriminate against imported vehicles.