Russia finally joins World Trade Organization
Russia formally joins the ranks of the World Trade Organization today, after more than 18 years of negotiations, but few analysts expect its membership in the world's biggest free trade club to produce quick economic miracles.
Russia becomes the last of the world's major economies to join the world trade body. Until now, it was the only member of the G20 countries still outside the WTO. It has the world's ninth biggest economy, worth $1.8 trillion US annually.
WTO membership requires countries to comply with WTO agreements. In other words, it has to play by the same trade rules as the other 155 member countries.
In Russia's case, membership will require it to lower import tariffs that protect Russian producers in areas as diverse as agriculture and manufacturing.
Those trade barriers will be phased out over the next few years, putting increasing pressure on old-style sectors that have been chronically inefficient. Russia's automobile manufacturing industry and its ancient farm sector are expected to take big hits as carmakers and farmers face more international competition.
Boosting foreign investment
WTO membership should eventually make it easier for foreigners to invest in Russian enterprises like banks and telecoms. Russian authorities see those investments as key to revitalizing and modernizing the country's economy.
So far, Russia's transition from a centrally controlled state economy to a market economy has been tentative at best.
"The Russian state still has a strong hand in controlling prices and output in sensitive sectors like food and energy," reports CBC's Karen Percy from Moscow.
"And foreign investors remain wary because of the perception that there is a disregard for the rule of law in Russia and the huge problem of entrenched corruption," she says.
Russian red tape is also famous. WTO membership won't produce an instant change in those areas.
The World Bank says Russia's entry into the WTO should result in a 3.3 percentage point boost to its GDP in the first three years and rising after that, although the current weak state of the global economy could dampen that forecast.
Over time, Russia is clearly hoping its WTO membership will give it the same economic boost China enjoyed after it joined the WTO in 2001. But with an export economy that is dominated by commodities, Russia is not likely to witness the same explosive growth that China's low-cost manufacturing-based economy experienced.
Canada, which has been a strong supporter of Russia's WTO membership efforts, exported about $1.5 billion in merchandise to Russia in 2011 and imported almost $1.3 billion.