Russia finally joins WTO
After 18 years of negotiations, Russia joined the World Trade Organization (WTO) on Aug. 22, but there was barely a whisper about it throughout Corn Belt agriculture, which has a lot to gain or lose. Maybe it was one of those stale issues that time forgets, but that certainly was not the case 25-30 years ago, when it was at the top of many farmer’s minds and addressed in every organizational policy meeting. So what does it all mean today?
As a fledgling farm broadcaster in the early 1980’s I ventured to Russia to find out what MFN, PNTR, Jackson-Vanik, and all of the explosive terminology really meant.
In meetings with Russians, all the way from managers of state farms to mid-level bureaucrats, they were adept at tapping their finger on your chest and blaming you for the poor agricultural economy in Russia. Of course their harvesting machinery with the latest wooden bearings, and irrigation equipment that could not be turned on in the drought that year because the five-year plan would not permit it, had nothing to do with their problems, at least in their eyes.
Their problems stemmed from the U.S. refusing to grant Most Favored Nation (MFN) trade relations to Russia. They wanted PNTR (permanent normal trade relations) and for the U.S. to abolish the Jackson-Vanik Act which restricted trade with Communist nations.
All of that rhetoric is now in the history books and memory crevices with the membership that has been granted to Russia to join the World Trade Organization, and become one of the “big boys,” since it was the world’s largest economy which had not been a part of the 153 nations that were WTO members.
While the political issue had always been at the forefront of Russia not being able to join the General Agreement on Tariffs and Trade (the WTO predecessor), the evolution of Russia into world trade still took a long time after Gorbachev’s glasnost and Yeltsin’s successful battle with the former Communist powers.
While the 18 years of negotiations is somewhat moot at this point, the impact of Russian agricultural trade with the U.S. is now in the future for both U.S. and Russian farmers. Those issues are outlined by William Cooper of the Congressional Research Service in his report to Congress just a month before the formal papers were signed and vodka toasts were made.
The Russian membership in the global trading community had been blocked by the U.S. because of the political issues, as well as heavy subsidies of production agriculture and exports that would not allow U.S. farm products to compete in the Russian marketplace. And the requirement for the U.S. to accept Russian food products would have put them into U.S. grocery stores at pennies on the dollar.