On January 1, 1995, the World Trade Organization began its work. After 25 years, the international group includes 164 states that control 98% of world trade.
According to the rules of the organization, member countries must provide each other with equal trading conditions, resolve disputes through consultations and negotiations, and also openly publish laws and regulations governing foreign trade.
The idea of regulating international trade arose even during World War II. Post-war discussions on global economic governance took place in the summer of 1944 in the US city of Bretton Woods at the United Nations Monetary and Financial Conference.
“Following the results of the Bretton Woods conference, it was planned to create three institutions to ensure the security of the global economy. The decision on two was made right away - that is how the International Monetary Fund and the World Bank came about. Negotiations on the creation of a third institute continued from 1946 to 1948. It was about the International Trade Organization (MTO), ”said Alexei Portansky, professor at the Higher School of Economics and Economics at the Higher School of Economics at RT.
Following the talks, the countries created the charter of the MTO and signed the General Agreement on Tariffs and Trade (GATT). The work of the GATT by eliminating tariff barriers and reducing customs duties facilitated trade for the parties to the agreement. However, the United States did not approve the charter of the MTO and the creation of the International Trade Organization was frozen for almost half a century.
“The GATT discussion lasted 47 years, and only after the end of the Uruguay round of negotiations in 1994 was the creation of the World Trade Organization approved,” said Portansky.
Initially, the reduction of tariffs, duties and other barriers applied only to trade in goods. Over time, WTO rules also began to affect the scope of services and intellectual property rights.
“When countries negotiated trade in goods, it turned out that it was necessary to consider the delivery and insurance of products or the provision of trade loans. As a result, it was necessary to conclude separate agreements in the service sector. And when quite a lot of goods appeared on the world market with the content of a high share of intellectual work, it became necessary to take into account such an aspect as intellectual property rights, ”added Portansky.
System crash
One of the main advantages of the WTO, experts call the ability of countries to assert their rights through a dispute resolution mechanism. According to Alexei Portansky, since 1995, about 600 proceedings have been initiated within the organization.
However, over time, the process of resolving trade disputes began to stretch for years. As a result, many states began to declare the need to reform the WTO.
“In the 60s and 70s, 50-70 states were parties to the GATT agreement. At that time, developed countries set the tone, and decisions on disputes were made quickly by consensus. Today, the situation has changed radically. There are 164 countries in the WTO, and most of them are developing. Under these conditions, it turned out that consensus is almost no longer working, ”added Portansky.
In recent years, many countries have begun to abuse WTO rules and have begun to impose trade restrictions against their partners en masse. As a result, the need to reform the WTO has further intensified. Irina Platonova, head of the department of international economic relations and foreign economic relations at MGIMO, spoke about this in a conversation with RT.
“Countries have increasingly begun to apply protective measures in accordance with Article 21 of the GATT. It allows states to impose trade restrictions for reasons of national security. But the criteria for introducing these measures are not fully defined and require further discussion. Otherwise, discrimination intensifies, which the WTO is essentially opposed to, ”Platonova said.
According to experts, in addition, the work of the organization was complicated by the actions of the United States. In addition to starting a trade war with China and imposing duties against a number of other countries, Washington began to block the appointment of judges to the WTO appeals body. As a result, the resolution of disputes in the organization was impossible.
“In my opinion, the US position is unacceptable and only worsens the overall situation. The result of the actions of the United States was the termination of the appeal body of the WTO, which is crucial for the entire process of dispute resolution within the organization. Yes, the WTO has its own problems today - the search for solutions to disputes takes years. This is unacceptable, and we must change procedures to speed up the process. But blocking the appeals body does not help to resolve the situation, ”said Maxim Oreshkin, head of the Ministry of Economic Development, in an interview with RT.
In November 2019, Russian Prime Minister Dmitry Medvedev at the East Asian Summit announced that US policy began to “undermine the foundations” of the WTO. However, the Russian authorities do not expect a complete cessation of the organization. According to the head of the Cabinet, today there is no alternative to the WTO.
“There is no alternative to multilateral cooperation, trading systems, the WTO,” said Medvedev.
“Yes, there are many shortcomings and omissions. But no matter what we say, in real modern life, commodity flows are subject to general laws and the international trading system should also be regulated on the basis of general rules, ”the Prime Minister emphasized.
Russia and the WTO
Russia has been negotiating accession to the WTO for 18 years - from 1993 to 2011 (in 1993-1994 it was about joining the GATT). In 2007, the then head of the organization, Pascal Lamy, stated that the WTO could not become a multilateral international association without the participation of Russia. Against this background, many states were seriously interested in accepting the Russian Federation into a trade group.
In December 2011, an official protocol was signed on Russia's admission to the WTO, and on August 22, 2012, the country became the 156th member of the organization.
“Thanks to the entry into the WTO, Russia gained access to many markets on pre-negotiated conditions. In addition, it has helped us better protect rights globally. Within the framework of the WTO, we win one dispute after another, and Russia currently plays one of the important roles in determining how the global trading system will function in the coming years, ”Maxim Oreshkin told RT.
According to experts, the result of Russia's membership in the WTO over the past seven years has been an increase in the supply of agricultural products abroad. As follows from the data of the FCS, this situation began to gradually affect the change in the country's export structure.
So, from 2012 to 2018, the share of food products and agricultural raw materials in Russia's supplies abroad increased from 3.2 to 5.5%, wood and pulp and paper products - from 1.9 to 3.1%, metals and products from of them - from 8.5 to 9.9%, and machinery, equipment and vehicles - from 4.2 to 5.1%. It is noteworthy that the share of supplies of mineral products over the same period of time, on the contrary, decreased from 71.3 to 64.8%.
At the same time, the high orientation of Russia to the export of raw materials does not allow the country to fully experience all the advantages of WTO membership. According to Portansky, the state still needs to diversify its supplies and primarily export “modern finished goods and services”, that is, products with high added value.
However, the authorities have already begun to take the necessary measures. We are talking about the implementation of the national project "International Cooperation and Export." According to the presidential decree, by 2024, exports of non-primary non-energy goods should reach $ 250 billion. At the same time, deliveries of engineering products should grow to $ 50 billion a year, services - up to $ 100 billion, agricultural products - up to $ 45 billion.