Russian WTO membership requires changes in ag trade
Russia being allowed into the World Trade Organization has passed its last step before a final vote by ministers at the Ministerial Conference in mid-December, and that vote is expected to be a rubber stamp approval from those familiar with the WTO structure.
The WTO announced this week that the organization’s “Working Party,” (membership committee) completed work on the “package spelling out Russia’s terms of entry to the organization.” Included in those terms are allowable tariffs on agricultural products, which in general are lower than current trade between Russia and WTO countries. Reportedly there are few “transitional periods” once Russia is accepted as a full member.
“The American Farm Bureau Federation believes that Russia’s successful accession into the World Trade Organization will lead to increased trade between our two nations,” said Bob Stallman, president of the AFBF. “Russia’s entry into the WTO was 18 years in the making and the result of often difficult, on-again and off-again talks among Moscow and its trading partners.
“Farm Bureau looks forward to our continued work with the Russian government in expanding U.S. agricultural exports to this valuable and important trading partner, and we appreciate the responsibility Russia has accepted as a WTO member. Russia’s joining of the WTO is critical for improving the terms of trade and dispute resolution between the United States and Russia.
Provided below is much of what the WTO Working Group announced relating to agricultural products trade that will go in place if the Russian Federation is accepted into the WTO.
On average, the final legally binding tariff ceiling for the Russian Federation will be 7.8 percent compared with a 2011 average of 10 percent for all products:
- The average tariff ceiling for agriculture products will be 10.8 percent, lower than the current average of 13.2 percent.
- The ceiling average for manufactured goods will be 7.3 percent versus the 9.5 percent average today on manufactured imports.
Average duties after full implementation of tariff reductions will be:
- 14.9 percent for dairy products (current applied tariff 19.8%)
- 10.0 percent for cereals (current applied tariff 15.1%)
- 7.1 percent for oilseeds, fats and oils (current applied tariff 9.0%)
- 5.2 percent for chemicals (current applied tariff 6.5%)
- Tariffs will be bound at zero for cotton
The final bound rate will be implemented on the date of accession for more than one third of national tariff lines with another quarter of the tariff cuts to be put in place three years later. The longest implementation period of any goods is eight years for poultry.
Tariff rate quotas (TRQs) will be applied to beef, pork, poultry and some whey products. Imports entering the market within the quota will face lower tariffs while higher duties will be applied to products imported outside the quota. The in-quota and out of quota rates are listed below with the out of quota rates in parentheses:
- For beef 15 percent (and 55%)
- For pork zero (and 65%). The TRQ for pork will be replaced by a flat top rate of 25 percent as of January 1, 2020.
- 25 percent (and 80%) for some selected poultry products.
- 10% (and 15%) for some whey products
- Some of these quotas are also subject to member-specific allocations
The total trade distorting agricultural support/subsidies for Russian agriculture could not exceed $9 billion (U.S. dollars) in 2012 and would be gradually reduced to $4.4 billion by 2018, the Working Party document also explains.