To date, there is no alternative to the World Trade Organization (WTO) and the multilateral trading system. This was announced on Monday, November 4, by Russian Prime Minister Dmitry Medvedev at a meeting of the East Asian Summit (EAC) in Bangkok.
“There is no alternative to multilateral cooperation, trading systems, the WTO. Yes, there are many shortcomings and omissions, ”Medvedev said. “But no matter what we say, in real modern life, commodity flows obey general laws, follow general rules, and the international trading system should also be regulated on the basis of general rules.”
According to the Prime Minister, at the moment, a number of countries have taken a tough stance towards the WTO. First of all, the head of the Cabinet pointed to the actions of the United States in a trade war with China.
“I mean, first of all, the United States, which has been recently quite strenuously shaking the foundations of this organization, do not recognize the actions of the WTO jurisdictional body, and want to change the rules,” Medvedev added.
Recall that in 2018, the United States unleashed a trade war with China. The States accused China of illegally acquiring American technology and increased duties on Chinese goods imported into the country. Beijing has introduced a response. After a series of negotiations in May 2019, Washington went on to aggravate the conflict: in addition to introducing new duties, American technology companies began to stop cooperation with Huawei. In August, the countries again failed to find a compromise on the terms of the trade deal and in September introduced new mutual restrictions.
Following the talks in October, China and the United States were still able to partially agree on the terms of the trade deal. Meanwhile, experts continue to warn of the risks to the global economy from the intensification of trade wars.
As previously stated by the managing director of the International Monetary Fund (IMF) Kristalina Georgieva, tariff wars have virtually stopped the growth of world trade. As a result, by 2020, the global economy may be missing $ 700 billion.
Medvedev stressed that Russia is interested in multilateral cooperation. In this context, the head of the Cabinet pointed out the need to strengthen trade relations with Asian countries. So, Moscow advocates the formation of a Greater Eurasian Partnership with the participation of the EAEU, the Association of Southeast Asian Nations (ASEAN) and the Shanghai Cooperation Organization (SCO). According to the Prime Minister, ASEAN countries have already supported the initiative.
“We strive to create the most favorable business environment for business in the territory of the Eurasian Economic Union, with clear understandable rules for business, and interest in trade with the union is growing,” the Prime Minister added.
ASEAN was formed in 1967, it includes ten states: Brunei, Vietnam, Thailand, Singapore, Myanmar, Indonesia, Laos, Cambodia, Malaysia and the Philippines. The total GDP of the association is estimated at almost $ 3 trillion.
Note that Moscow has been in dialogue with ASEAN for 23 years. In 2018, Russia's trade with the block countries increased by 6.8% and amounted to $ 19.6 billion. According to the Federal Customs Service, the association states account for about 3% of Russian trade. At the same time, Vietnam (with a share of 0.9%) and Singapore (0.5%) remain the key trading partners of Moscow in ASEAN.
Today, the bulk of Russian supplies to ASEAN countries falls on energy raw materials (mainly oil and oil products), vehicles, chemical products, and agricultural products. Moreover, in recent years, the export of technology has been growing. The head of the HSE School of Oriental Studies, Alexei Maslov, spoke about this earlier in an interview with RT.
“We have now begun to supply technology and service packages for these technologies to ASEAN countries. We already have contracts for the repair of aircraft, for the supply of equipment for the construction and maintenance of railways, as well as parts for steelworks and metalware, ”Maslov emphasized.
It is noteworthy that at the moment Russia has signed agreements on a free trade zone (FTA) with two ASEAN states. So, in 2015, within the framework of the Eurasian Economic Union (EAEU), Russia signed an agreement on an FTA with Vietnam. As a result, from 2016 to 2018, the Russian-Vietnamese trade turnover increased by almost 60% to $ 6.08 billion. This is evidenced by the data of the Federal Customs Service. As the deputy head of the Vietnamese Foreign Ministry, To An Dung, previously, by 2020, the mutual trade volume between the two countries could reach $ 10 billion.
On October 1, 2019, Russia signed a similar agreement with Singapore. According to Dmitry Medvedev, work is currently underway in this area with other ASEAN members.
“The Eurasian Commission signed documents on cooperation with Cambodia, Thailand, just two weeks ago - with Indonesia. The implementation of these agreements will be an additional incentive and will open up new opportunities for joint work of the business communities of our countries, ”said the head of the Cabinet.
It should be noted that in addition to building up trade ties, Russia is also strengthening investment cooperation with ASEAN. At the end of 2018, the total volume of Moscow's investments in the organization’s countries grew by $ 1.4 billion - up to $ 3.9 billion. At the same time, the countries of Southeast Asia also increased their investments in Russia by $ 1.4 billion - up to $ 4.3 billion.