WTO 'On the Scrapheap,' But Trans-Pacific Partnership is No Replacement

© AFP 2023 / Mandel NganPeople hold signs against the Trans Pacific Partnership (TPP) on Day 3 of the Democratic National Convention at the Wells Fargo Center, July 27, 2016 in Philadelphia, Pennsylvania
People hold signs against the Trans Pacific Partnership (TPP) on Day 3 of the Democratic National Convention at the Wells Fargo Center, July 27, 2016 in Philadelphia, Pennsylvania - Sputnik International
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Joining the WTO has led to disappointment for Russian manufacturers and politicians alike, Russian business newspaper Vzglyad reported.

A person gets out of the World Trade Organization (WTO) headquarter in Geneva (File) - Sputnik International
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Russian exporters were enthusiastic about joining the World Trade Organization (WTO) four years ago, but have become disillusioned with the trade institution, Russian business newspaper Vzglyad reported on Thursday.

Vladimir Guryanov, director of the Coordinating Council of Russia's Union of Industrialists and Entrepreneurs, told the newspaper that "the past three years have dispelled a lot of illusions" among manufacturers.

Joining the WTO in August 2012 was a "welcome to the real world" for Russian manufacturers, who started to face greater competition at home from imported goods after Russia cut customs duties in line with WTO regulations. 

"The principles of international trade haven't changed since the 19th century," and are established by the most developed economies, Guryanov said.

"Even the two sectors which were the most active in lobbying to join the WTO – metallurgy and chemicals – continue to periodically suffer from anti-dumping sanctions, and the others have felt little effect."

Last month Russia announced its intention to appeal to a WTO panel against the EU's imposition of anti-dumping tariffs against Russian steel producers who export to the bloc. 

"From our point of view, it (the imposition of the tariff) has been carried out in violation of WTO rules, which we have said repeatedly in meetings with the EU at the political and the expert level."

"However, the EU Commission introduced the anti-dumping duty at the end of 2016, ignoring our arguments and closing the market to Russian metallurgy companies, which does not comply with WTO rules," head of trade negotiations at the Russian Ministry of Economic Development Maxim Medvedkov told RIA Novosti.

"WTO members have the right to anti-dumping measures in accordance with certain procedures. Brussels is obviously abusing this right, so it is likely that in this case, we will have to go to court."

Last month WTO arbitrators backed the EU in two disputes with Russia. The first was about Russian customs duties on the import of refrigerators, palm oil and paper products, while the second declared Russia's import ban on live pigs, fresh pork and other pig products from the EU inconsistent with a number of WTO articles.

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After the US and EU imposed economic sanctions against Russia in 2014 following Crimea's reunification with Russia, Russia had hoped in vain that the WTO would rule the sanctions incompatible with its free trade rules. 

"The WTO is not some kind of headquarters. Everything (in the WTO) is decided according to the will of its members," Aleksey Portanskiy of Russia's Higher School of Economics explained.

"When they ask, why doesn't the WTO respond, it is better to ask, why don't its member states react to the sanctions through the mechanisms of the WTO," he told the Komsomolskaya Pravda newspaper.

While disappointed by the WTO's stance on sanctions, Russia still believes it provides a necessary platform for trade dialogue, in the absence of other mechanisms.

"The WTO is not ideal, but it is the only universal platform that defines the rules of the game throughout the global economy," Russian Prime Minister Dmitry Medvedev said last month, warning that the organization is "being encroached upon" by secret trade agreements like the TPP and TTIP.

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The WTO's most recent round of trade talks began in Doha in 2001. However, the talks have stalled, and in December last year WTO members declined to reaffirm the mandate of the Doha Round of negotiations.

Vasiliy Koltashov, director of Russia's Institute of Globalization and Social Movements (IGCO), told Vzglyad that proposed trade deals such as the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) are the writing on the wall for the WTO.

"Objectively, the WTO has exhausted itself, it has worn itself out. It's going to the scrapheap," he said.

However, the analyst is unconvinced about the viability of the proposed Trans-Pacific Partnership, and says that the trade agreements could suffer from the same problems of economic inequality which dog other political unions like the EU.

"The Trans-Pacific Partnership could also turn out to be an unsustainable, short-lived union, just because the US economy can't grow and pull along with it the economies with which it is politically linked," Koltashov said.

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