How Russia joining the WTO impacts the U.S.

Russian Chief Negotiator Maxim Medvedkov smiles with a t-shirt he received from the hand of WTO Director-General Pascal Lamy after formal negotiations on Russia's membership bid to join the World Trade Organisation (WTO), on November 10, 2011.

Stacey Vanek Smith: After nearly two decades of negotiations, Russia is now officially a member of the World Trade Organization. It's an economic boon for Russia; Its estimated foreign tariffs cost the country's exporters as much as $2 billion a year. It's also an economic boon for most of the WTO's members, but not the U.S. That's because of a 1974 amendment passed by Congress to punish the Soviet Union for preventing Jews from emigrating.

Peter van Dyk has more from Moscow.

Peter van Dyk: Joining the WTO means Russia will lower import tariffs and open up to more foreign competition. But the Jackson Vanik Amendment means new rules won't apply to U.S. companies.

Bill Watson: If we don't repeal Jackson-Vanik, it's as if for the United States, Russia never joined the WTO.

Bill Watson is a trade policy analyst at the Cato Institute in Washington. He says Congress can't think beyond the November elections. And it doesn't want to be seen to be giving Russia an easy ride on issues like human rights and corruption.

Watson: They ought to be looking at this whole issue as a jobs bill, something to do to create economic opportunity to open Russian markets to U.S. products.

Watson says the U.S. wins more than Russia from its entry into the WTO. But the Jackson Vanik act means other WTO members get a head start. That's why U.S. companies doing business here have long lobbied to get rid of the amendment. In fact, right now it's about their biggest job.

In Moscow, I'm Peter van Dyk for Marketplace.

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Joining the WTO is one thing, benefiting from it is another. Russian consumers and firms will benefit because a large variety of foreign goods, services and raw materials will be available to them. However, can they afford them? Can Russian firms be globally competitive? Where does the competitive advantage of Russian firms lie? A cheap labor force? skilled workers? Entrepreneurial skills? Ideas, innovation and invention? Key trade partners? An adequate institutional framework to exercise free enterprise? Opening up to trade does not hurt, but the benefits are closely related to the potential sources of competitiveness: education, technology, natural resources, entrepreneurship, etc. Another way in which free trade can benefit Russia is by creating an incentive for foreign direct investment (FDI) that can exploit business opportunities. FDI usually brings with it acquisition and adoption of new technologies, modernization, new jobs, and so on. One huge step has been taken. The final outcome will depend on whether Russians can play by the rules of the game and successfully endure fierce competition in global markets and create a friendly business climate for foreign investors. I am confident they will succeed. One last thing, adherence to the WTO can boost the Russian economy but only for a while. Eventually the gains from free trade will (hopefully) be fully exploited. For the benefits of joining the WTO to be permanent, Russians must pursue a strategy for further structural reforms and permanently increase total factor productivity and international competitiveness. Moreover, macroeconomic and financial stability, the rule of law, legal certainty, public security and adequate basic infrastructure (public services) are also important factors to be kept in mind. A long-run strategy must take into account all these considerations. But as I said earlier, free trade does not do any harm. It still promotes economic efficiency. Wish for the best, but don't set expectations too high.


How dredfully insulting.
on one side there are an assembly of extraordinarily professional trusted world government executives yet on the other what was offered after 20 years of effort by a single large applicant
and would be major supplier is....... yet another intelligence insult.

I would expect the first self initiated action by any member of the wto representing the whole in public sets the pace by which the entire wto behaves toward its new member states.

The first initiative usially comes from the heart where this particularly imprepriety which may however be acceptable in a more casual forum or a roast celebration deserves soviet oversight which may pursue control over the wto's direction toward asia which may impose or impugn upon soviet interesets.

I would believe any orginazation who's loosely controlled activity effects affairs of any state should receive some well deserved restriction. which entity supplies the wto with its capitol resources to function and by what structure does the wto entertain the ability to operate?
Please, consult or if needs be audit that entity regarding oversight against child entities'
business dispositions. By this one single display, I can easily gather a great deal of
information about what might be the hidden history of the wto, its agents and members states.

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