Russia Gains EU’s Support for WTO Ascension
Russia moved one step closer to joining the World Trade Organization Tuesday after receiving approval from the powerful European Union, according to reports.
Russia now has the approval of both the EU, the world’s largest economy, and the U.S., which is the world’s second largest when the former is included.
“Russia becoming a W.T.O. member in 2011 is a realistic perspective,” Jose Manuel Barroso, president of the European Commission, said. “W.T.O. accession will strengthen trade and investment rules in Russia and will therefore be beneficial to its businesses and its citizens.”
After securing the support of the U.S. in October, Russia turned its eyes toward Europe, where a number of trade issues were still left to be settled. With those issues resolved, it is believed that Russia could become a member of the international trade organization by as soon as next year.
Russia has been trying to join the organization for roughly 17 years now, since moving toward market based reforms in the wake of the collapse of communism.
However, not all is finalized. Before Russia’s entry into the WTO is completed, America may have to approve Permanent Normal Trade Relations with Russia, much like it did with China in 2001.
As of now, Russia is the largest national economy outside of the WTO. It has not been able to gain entry due to its failure to make the requisite reforms to its economy.
While Russia is not nearly the economic threat to the U.S. that China was during its ascension into the 153-member international trading body, there are obvious concerns.
For one, Russia is not known for enforcing intellectual property rights. In fact, for 13 straight years, the nation has been on the Office of the U.S. Trade Representative’s priority watch list for intellectual property theft.
One similarity between China and Russia’s ascension into the WTO is the insignificance placed on all issues other than knocking down “trade barriers.” Overlooking those issues could come back to haunt the U.S. in the end.
Since entering the WTO in 2001, trade with China has resulted in the loss of 2.3 million jobs through 2007, according to the Economic Policy Institute. In 2006 alone, the trade gap with China resulted in the loss of 366,000 American jobs. Those fortunate enough to retain their jobs witnessed their annual earnings decrease by roughly $1,400. American workers are put in direct competition with one another as more and more employers look to offshore production to nations with lower wage rates.