It seems that the representatives of the American business have invented a new sanctions punishment for Moscow. A public hearing on Russia's participation in the World Trade Organization was held at the US Trade Representation (USTR, the official body that oversees the country's foreign trade policy).
Izvestia cites Cecilia Klein, Managing Director for USTR accession to the WTR. According to her, “a number of representatives of business associations said that Russia is not fulfilling its obligations under the WTO and, in particular, therefore should be excluded.” The second possible scenario for the development of events is the early termination of the seven-year transition period, which presupposes Russia's preferences in order to mitigate the economic shock from joining the WTO.
American steelmakers, pharmaceutical monsters, as well as representatives of the telecommunications business are among the zaoopershchik of the next world-trading “run over” to the Russian economy. In particular, the President of the Association of North American Steel Manufacturers (AISI) Thomas Gibson and the head of the Association of Steel Manufacturers (SMA) Philip Bell saw the dominance of state-owned companies in the metallurgical industry of the Russian Federation. This, in their opinion, violates the competitive environment, forcing "US steel companies to compete in the market against foreign countries, not companies." It is difficult to understand which companies with state participation in the metallurgical sector. Except for those where the state acts as a minority shareholder. For example, in the world's largest producer of titanium, VSMPO-Avisma, the state owns only a blocking package.
Another claim by American steel makers (joined by overseas pharmacists and representatives of the IT sector) is worded more clearly. The Russian Federation is accused of still not acceding to the WTO agreement on government procurement. “The signing of this agreement is a necessary condition for the lifting of restrictions for American business to enter this large market. In 2012, the public procurement sector was about $ 430 billion, ”AISI and SMA executives lament over lost profits.
Representatives of PhRMA are particularly upset by the legalized preference for Russian and Belarusian manufacturers at federal and municipal auctions. They are not covered by the 15 percent discount. The fact is that according to the decision of the Ministry of Economic Development, if a foreign producer becomes the winner of the bidding, he must make a discount in 15% of the price offered by him.
It is worth noting that adherence to the public procurement agreement is one of two conditions, the fulfillment of which is not necessary when joining the WTO. Nevertheless, the Russian authorities have already promised our trading partners to enter into negotiations on this issue. Thus, American business wants to punish Russia for a non-existent offense.
Vice-President of the Federation of National Milk Producers of the United States, Shona Morris, also reminded USTR officials that "Russian sanctions on products from the United States and other major importing countries, imposed purely for political reasons, violate WTO laws." At the same time, Mrs. Morris, for understandable reasons, chose to keep modestly silent that Russia's actions were of a purely reactive nature. That is, they became a response to the sanctions war unleashed by Washington and Brussels against Moscow. Not to mention that the 21-I article of the GATT (General Agreement on Tariffs and Trade) permits the use of any restrictive measures for reasons of national security.
It should be noted that, in contrast to metallurgists and pharmacists, the remaining American exporters did not “pick out the raisins from the bun” called “Russia's accession to the WTO” during this meeting. Indirectly recognizing that the tariff "denial" of the Russian market, arranged by our home-grown liberals, in general, opens the way to the enrichment of American producers. So, "positive changes" noted in the US Council on spirits. In turn, the absence of complaints about Russia from the rest of the business community suggests that the “American bees” will probably buzz a little more in the anti-Russian vein, but they will hardly refuse the “Russian honey”. At the very least, functionaries from the USTR urge not to take complaints from individual entrepreneurs too seriously.
The nature of claims to Russia by the United States confirms that Russian raw materials companies lobbied for Russia's accession to the WTO, said Vasily Koltashov, head of the Center for Economic Research at the Institute of Globalization and Social Movements.
“In the conditions when problems in the world economy are growing like a snowball, our entry into the WTO provides additional insurance for export-oriented Russian raw materials corporations in foreign markets. In the sense that their products are to some extent protected from unfair competition. It should also be borne in mind that these budget-forming companies are the main targets for sanctions pressure from the West. In the process of bargaining with Russia about the lifting of sanctions, our raw materials will play a decisive role, given the proportion of their representatives in the ruling establishment.
In the event of an early termination of the transition period, Russia will be in the WTO on the position of Ukraine with all the ensuing consequences. Let me remind you, Kiev joined this organization back in 2011, on terms that can hardly be called anything other than capitulatory. But no one will completely exclude our country from the WTO. This would be a blow to the World Trade Organization itself, which is experiencing a severe crisis.
"SP": - Before the West launched a trade war against us, the Russian authorities vowed to fight protectionism. The situation has changed, but the expectations remain?
- The United States and its allies are themselves to blame for not leaving us any other choice. In fact, they forced the Kremlin to return to protectionist policies. However, the US and the EU are doing the same. Claims of US steel companies reflect their real problems. It would be strange if they were not in conditions of a sanctioned confrontation, when normal trade and financial relations between Russia and the United States are not just called into question, but almost completely destroyed. In addition, competition in the global steel market has intensified.
Naturally, American companies would like to press Russian business. At the same time, the WTO is a tool that at the very least protects Russian metallurgists. As a matter of fact, it is almost the only industry that has benefited from the entry of our country into the world trade club. Even the oil and gas complex cannot be counted among the obvious beneficiaries. Moreover, our energy companies were confident that hydrocarbon prices would not fall. For them, the WTO is just an extra safety net.
"SP": - Washington will ignore the concerns of their metallurgists and pharmacists, or gratefully grab for another reason to accuse Russia of all serious?
- Options can be very different. Most likely, the Americans will try to increase pressure on our country. And the claims of American business are absolutely far-fetched. The fact is that we do not have a single state-owned steel company.
"SP": - If we leave out of our brackets quite successful, even in a low raw materials market, how will the possible exclusion of Russia from the WTO affect the economy?
- For companies operating in the domestic market, this would be a gift. By pushing our state to more decisive protectionist policies and the development of domestic demand. That, in turn, would support the domestic market afloat, moreover, would allow us to change our one-sided raw material model. At the same time, the diversification of the economy would allow Russia to feel more confident in geopolitical butting with the West.
Another thing is that for our commodity business and its lobbyists, Western sanctions, retaliatory measures on our part and the oppression connected with the WTO are extremely undesirable and painful.
"SP": - It turns out that the US State Department is interested in relaying at the WTO level the concerns of its business in order to increase pressure on the Russian elites?
- In an effort to "punish" Russia, the American authorities can use any, sometimes completely ridiculous argument. Russian metallurgical companies, probably, enjoy protection from the state, but not more than their overseas competitors. But no one in the States will understand the real facts. The main thing is to continue to put pressure on Russia in the context of a neglected negotiation process.
"SP": - Explain what I mean.
- This concerns the conditions for the termination of debilitating sanctions battles. To a large extent, Vladimir Putin’s meetings with Angela Merkel, Dmitry Medvedev and John Kerry, and negotiations at the G-20 meeting in the USA were devoted to this. This includes the upcoming G20 summit in Australia. In general, a whole series of international events during which the Ukrainian crisis will be discussed, as well as the war of sanctions, which takes place between Russia and Western countries.
If, under pressure from American steel companies, Russia is excluded from the WTO, all representatives of the Russian real sector will have to throw off a monument to American metallurgists, senior analyst at Rik-Trust Vladislav Zhukovsky notes with some irony.
- It would be hard to imagine a bigger gift from our “Beaters”. It is safe to say that in this case, American raw materials capital would have done much more for the Russian economy than all the Russian cabinet ministers combined.
"SP": - Most likely, the miracle will not happen, and "busts in the American homeland of heroes" will not be installed.
- We were once again convinced that only raw materials, export-oriented and low-conversion sectors of the economy could benefit from joining the WTO. First of all, petrochemistry, oil refining, oil and gas and metallurgical complex, partly forest industry, as well as fertilizer producers.
All other industries were put on the sidelines. First of all, we are talking about high-tech manufacturing industries with a high proportion of value added. They were among the losers due to their low competitiveness and unequal conditions of competition. In terms of availability of credit resources, growth rates of tariffs of natural monopolies and low levels of state support. The net loss of our economic entities from joining the WTO over two years, according to my calculations, is approximately 120 billion dollars.
The outflow of investments, the industrial recession, the decline in entrepreneurial activity are explained not so much by sanctions or the fall in energy prices, but rather by Russia's accession to the WTO on absolutely enslaving conditions. What naturally led to the exhaustion of this parasitic resource-raw model of economic growth without development.
Naturally, nobody speaks about Russia's losses in a whole number of key sectors in the West. No one cares about the problems of our engineering, machine tools, instrument engineering. In this part, we are applauded for the fact that we ourselves "threw the log under the wheels," conserving our own technological backwardness and raw material dependence. And where we could potentially get some kind of income (due to the relatively low cost of labor and energy), we are trying to twist our arms. Say, no benefits, guarantees and preferences to exporters should not be. This policy of double standards derives from the logic of competition.
"SP": - What are the chances of Russia to protect their interests at the judicial platforms of the WTO?
- Absolutely none. This structure was originally created as the US toolkit for the neo-colonial enslavement of the countries of the world periphery in the interests of large Western financial and industrial capital. In such a fight, the strongest always wins. If you have a banking system ten times weaker than in America, and in terms of technology you lag behind the West by decades, then you will find yourself in the “whipping boys” position in the world trading ring. That is, in the role of an eternal loser, due to which more developed players develop.
Valentin Katasonov, a professor at the Department of International Finance at MGIMO, recalls that attempts to speak to Russia in the language of force always led not to surrender, but to the opposite result.
- As a rule, this had a mobilizing influence on our political class and, accordingly, on the Russian economy. If the West had not introduced economic sanctions against the USSR, Stalin might not have begun to industrialize. Accordingly, we would not have been able to prepare for World War II. Those people who are pushing the governments of Western countries to toughen the sanctions campaign against Russia are simply deprived of reason or are guided by short-term corporate and personal interests. Sometimes Russia is saved by the fact that our geopolitical opponents lose their mind.
"SP": - Should we rely on the insanity of the Anglo-Saxons, waiting for the salutary exile from the WTO, or is it better to be proactive?
- I would suggest another option. The process of excluding the United States from this structure should be initiated within the WTO. According to statistics, the United States and the United Kingdom are two countries that more often than all other WTO members introduce so-called “unilateral sanctions”. And this is contrary to the basic principles of this organization and international law.
According to the UN, at the beginning of the “zero” years, the United States imposed sanctions against countries in which 52% of the world's population lived. What is this “single world market” if more than half of the world's inhabitants are under sanctions? It turns out that America acts as the main disrupter of world trade.
"SP": - Given that the WTO was created to promote the interests of American capital, the exclusion of the United States is out of the question.
- But in a purely political and propaganda sense, such an action would have a positive effect. And after our proposal is rejected, we can (and will even be obliged to) withdraw from the WTO. If Americans are planning to cancel the grace period, then this is a great formal reason to exit. Because it will mean a violation of the agreements reached at entry.
Enough data have been accumulated that speak eloquently about how much it cost Russia to join the WTO. As for the sanctions, it is the losses of European manufacturers who have lost access to the Russian market. On the other hand, they can be regarded as the profits that our producers will receive.
"SP": - Why are our authorities so torn into a structure, membership in which brings even more losses than a direct trade embargo?
- Our "fifth column" tried. These are purely political reasons. At the stage of negotiations on Russia's accession to the WTO, it was clear who lobbied for this adventure.
"SP": - Experts called the Russian metallurgists almost the main beneficiaries of our membership in the WTO.
- Here I would argue. Yes, Alexey Mordashov (General Director of OAO Severstal - approx. Ed.) Constantly spoke. He just did not take into account one thing: some estimates show that Russian metallurgy also suffered losses from joining the WTO. Do not forget that this is energy-intensive production. And the rules of this organization require that domestic energy prices reach the world level. In fact, this was the main competitive advantage of our metallurgy.
"SP": - Really economists and analysts could not calculate the consequences that lie on the surface?
“Unfortunately, our oligarchs from metallurgy are not independent people. In Russia, it is impossible to create a business and become an oligarch. Those who are loyal and obedient are appointed to this “post”. Most likely, metallurgical tycoons were simply lowered from above the distribution list to promote the WTO, even if it is in fact unprofitable for them. And if you raise a "riot on the ship" and tell the truth, then you will be charged with "red flags". Then you can not just stop being an oligarch, but also turn into an inmate.
"SP": - Returning to the demarche of American business, how fair are the accusations against Russian state-owned companies that allegedly violate the principles of free competition.
- This is from the series "whose cow would moo ...". American business has an advantage that their competitors do not have. I mean cheap money. Like it or not, before the printing press of the Fed, American companies are at hand. This is, of course, not about small business, but about the largest transnational corporations. Freshly printed dollars they get almost free.
"SP": - But after all, the Fed formally is a conglomerate of private banks that are not related to the state.
- It does not matter, public or private. The main thing is that TNCs have such a preference. Despite the fact that the Fed is a private structure, it almost monopolized the state function. In fact, the money should be issued by the state.
"SP": - Our exporters are accused of dumping, which is largely due to natural causes - due to the depreciation of the ruble.
- Americans consider it as currency dumping. In fact, its beneficiaries are industries that are associated with the supply of raw materials for export. The Russian authorities talk a lot about import substitution, but with a falling ruble exchange rate, one can only dream about it. As, thus, the backward raw structure of economy is preserved. It turns out that the export of oil and natural gas is subsidized at the expense of other sectors of the economy. And the surplus value is redistributed in favor of exporters. At the same time, the processing high-conversion Russian industry is becoming a hostage to the low exchange rate of the ruble. A stable normal exchange rate of the ruble is needed by everyone, except exporters - consumers, the real sector.