Developing countries to boost farm trade as Russia joins WTO – study: Beef, pork, sugar exports to grow; more stable grain markets

1 May 2012

FOR IMMEDIATE RELEASE

Contact: Jonathan Hepburn, Agriculture Programme Manager
Tel. 0041 22 917 87 56; jhepburn@ictsd.ch

(Geneva, 30 April 2012). Developing country farm exports are set to grow substantially in months ahead as Russia joins the World Trade Organization, a new study finds – with increased consumer demand and lower import duties driving the trend.

Expanded access to Russia's beef, pork and sugar markets could boost exports from Brazil, Paraguay and Uruguay, say Sergey Kiselev and Roman Romashkin in a research paper for the International Centre for Trade and Sustainable Development (ICTSD).

Major importers of Russia's wheat exports such as Egypt and Turkey could also gain as Russia agrees to control export restrictions and prohibitions, the study finds – along with barley importers such as Iran, Libya and Saudi Arabia.

“Russia's growing agricultural and food markets are attractive both for domestic producers and to suppliers from abroad”, Kiselev said. “For several commodity groups, Russia's market openings will substantially improve trade”.

Argentina, Chile and South Africa could benefit from substantially lower import duties on their wine exports, say the authors, and Turkey and Chile could gain as Russia halves its import tariffs on grapes.

Although developing countries are the main suppliers of bananas, citrus fruit, coffee and tea, Russia's current low tariffs mean that exporters of these products will not see major gains.

However, Colombia and Kenya could gain as Russia slashes import duties on cut flowers from 15 to 5 percent, and countries such as China and South Africa could gain as Russia's maximum permitted tariffs on apples, pears and other fresh fruit drop to half, or even less, of their current levels.

Russia's WTO commitments will still allow the government to help domestic industry to adapt, by providing farm subsidies and tax concessions or investing in infrastructure, the study finds. Production-linked support could be redistributed to producers in sensitive sectors, such as pork, poultry or sugar, while farm subsidies that are not deemed to distort trade could also be increased – such as those for the environment or particular regions.

Russia's customs union partners, Belarus and Kazakhstan, are also likely to lower tariffs on developing country exports once Russia has joined the global trade body, argue Kiselev and Romashkin. Exporters could also gain further access to markets in the three customs union countries as Belarus and Kazakhstan negotiate to join the WTO.

“Russia's membership in the WTO will provide significant trade benefits for developing countries”, said Kiselev.

“In case of a breach of Russia's obligations, the WTO dispute settlement system can be used to seek redress – an avenue that was not open before Russia acceded to the WTO”, added Kiselev.

The study is online here.

Notes to editors:

1. The International Centre for Trade and Sustainable Development (ICTSD) is a nonpartisan think tank, based in Geneva, which - by empowering stakeholders in trade policy through information, networking, dialogue, well targeted research, and capacity building - seeks to influence the international trade system such that it advances the goal of sustainable development. www.ictsd.org

2. The World Trade Organization (WTO) is an organisation based in Geneva, Switzerland, which is responsible for liberalising and regulating international trade in goods, services and other areas. It has 153 Members.

3. The Eighth Ministerial Conference of the WTO formally approved the Accession Package of the Russian Federation on 16 December 2011. The country now has to complete its domestic ratification of the accession protocol within 220 days of this decision, i.e. by 23 July 2012. The Russian Federation will become a Member of the WTO thirty days after notifying the Secretariat of the domestic ratification of its Accession Package.