Russia successfully concluded negotiations with World Trade Organization (WTO) members on the terms of its accession to the WTO. After 18 years of somewhat difficult negotiations, an agreed-upon pact was adopted today by the WTO’s working party. The agreement will now go to trade ministers for formal approval at the WTO’s December 15-17 ministerial conference. Russia would then take its seat at the WTO 30 days after notifying the organization that it has ratified the membership package.
A number of issues involving agriculture were finally resolved at talks in Geneva this week. Regarding government subsidies for agriculture, Russia and WTO members have agreed that Russia will initially be allowed to increase its payments of trade distorting “amber box” support to $9 billion per year in 2012 and 2013, according to a BNA report yesterday. The limit will be reduced to $8.1 billion in 2014, $7.2 billion in 2015, $6.3 billion in 2016, and $5.4 billion in 2017 before the final limit of $4.4 billion per year takes effect. Examples of amber box support include measures to support prices and subsidies directly related to production quantities. Russian officials told WTO members early this year that the government spent $5 billion in trade-distorting subsidies in 2009 and that this figure would increase in 2010 and 2011 as it engages in an overhaul of Russia’s agricultural sector. Russia has also agreed as part of its WTO accession to eliminate export subsidies from the date of accession.
Russia’s proposed limits on meat import were one of the last remaining irritants in the Russian accession talks, according to the BNA report. The United States, European Union, Australia, Canada, and Latin American nations debated with Russia as well as among themselves over how much Russia would allow to be imported under proposed tariff rate quotas (TRQ), whether individual countries would be granted specific quotas, and how long the TRQs would remain in place. Russia drew the ire of farm exporting nations in November 2010 when it announced it was cutting its proposed TRQ amounts for pork and poultry in half over frustrations with continued delays in the accession talks. Those amounts have been increased under the final agreement set out in the draft schedule, although for some products the amounts are not as high as those originally proposed.
For poultry, Russia has agreed to fix a TRQ of 250,000 metric tons for frozen, bone-in chicken parts and 100,000 tons of frozen, boneless chicken, with the in-quota import tariff fixed at 25 percent. For frozen, boneless chicken, the majority of the quota (80,000) has been reserved for imports from the EU. Also, a 14,000-ton TRQ has been fixed for turkey meat, with the in-quota tariff fixed at 25 percent. In the event any of the poultry TRQs are eliminated, Russia will apply a flat rate of 37.5 percent on the imports, regardless of the amount.
For pork, Russia has agreed to an annual TRQ of 400,000 tons of fresh, chilled, or frozen pork imports and 30,000 tons for pork trimmings. Imports within the quota will be subject to a zero duty rate. Russia also agreed to eliminate the pork TRQs by January 1, 2020, after which imports will be subject to a flat duty of 25 percent, regardless of the amount imported.
For beef, Russia has agreed to an annual TRQ of 530,000 tons of frozen beef from WTO members and 40,000 tons of fresh and chilled beef, with both subject to an in-quota import tariff of 15 percent. Within the quota on frozen beef, 60,000 tons will be reserved for imports from the United States, 60,000 tons will be reserved for imports from the European Union, and 3,000 tons will be reserved for imports from Costa Rica. Within the quota for fresh and chilled beef, 29,000 tons will be reserved for imports from the EU. In the event either TRQ is eliminated, Russia will apply a flat rate of 27.5 percent on the imports, regardless of the amount. Reportedly, unresolved issue concerns market access for high quality beef.
