Reading the English newspaper

  1. l. Read the article and do the exercises.

Russia amp; the WTO: Crunch Time

Christopher Granville, “The Reuters”

The goal of Russian WTO accession in 2003, previously endorsed by Putin, is looking more ambitious than ever.

The autumn negotiating and legislative sessions in Geneva and the Duma will be decisive. With elections in mind, Putin may balk at this fast-track timetable. Protectionist oligarch Oleg Deripaska has caught this change of mood with his call for a much slower track. Russia’s fundamental transition prospects and progress will not be undermined simply by the fact of joining the WTO in 2005 rather than in 2003. However, any such delay would entail dangers and disappointments that create a leadership challenge for Putin.

The main incentive for targeting accession at the WTO’s next ministerial meeting in Mexico City in autumn 2003 is to ensure that Russia will become a full participant in the current ‘Doha Round’ of multilateral trade talks. But this timescale always looked highly ambitious, and all the more so after the latest and fruitless Geneva negotiating round in June. For all their sensitivity, the negotiations on Russian import tariff levels and access to its service markets are the least of the problems, since agreements can be quickly struck if there is sufficient political will on both sides. Delays here will tend to be due to negotiating tactics. So there is nothing inherently alarming about the fact that the Russian negotiators showed no signs of movement at the June working party session in Geneva either on reducing protectionist tariffs in key sectors such as autos, aerospace and pharmaceuticals, or on lifting restrictions on foreign entry into the domestic financial services market. But the necessary Russian concessions on some or all of these matters would still mean overcoming some powerful vested interests at home.

Much more difficult even than this will be non-tariff barriers, and the general trade-related regulatory and legislative framework. Here, the key issues are Russia’s low regulated energy tariffs seen as blanket industrial subsidies, and agricultural subsidies. On the regulatory front, Russia’s trade policy regime still needs clarification on many points even before starting to negotiate commitments on its stability and/or amendment. But it is on the legislative front that the time factor is most acute. The autumn session of the Duma is due to address a whole range of fundamental legislation necessary for WTO accession. Key measures include the Customs Code, the liberalisation of currency controls and, in the area of non-tariff barriers, the law on technical regulation. But these bills will have to compete for parliamentary time in the thick of the annual budget round.

It will be clear from all this that Russia has a mountain to climb if it is to meet the target of WTO accession next year. It could be done. The key to a deal will lie in agreeing ‘grace periods’ after accession in which import tariffs and service market entry restrictions will be reduced, and domestic energy tariffs raised to acceptable levels. But Russia’s entry prospects in 2003 will hinge on the remaining Geneva negotiating rounds, when drafting of the ‘working party report’ (the basis of the Protocol of Accession) is due to begin, spelling out Russia’s commitments. Slow progress this autumn either in Geneva or in the Duma will most likely mean the postponement of Russian WTO membership until the 2005 ministerial meeting.

These stark realities seem to be making an impact. Putin spoke in July of three years as possibly a more realistic timetable, and this was echoed by the WTO Secretary General, Mike Moore, who had previously been talking up Russia’s rapid entry prospects. Although the government, tor its part, is ploughing on (it dedicated a special session to the issue on July 25), there is a sense that the political will necessary to make a decisive push on the WTO front this autumn may no longer be there.

Given the obvious worries about the effect of WTO membership on employment, Putin’s natural caution — reinforced by election considerations — may well prevail. Until now, the main business interest groups have paid lip service to the WTO accession goal as stated by Putin. But given the many and varied protectionist interests, this was bound to change at the first sign of doubt in the Kremlin. So it was not surprising that aluminium and autos tycoon Deripaska broke ranks on August 5 with a call for the postponement of WTO entry until the second half of the decade — though it was surprising to see him breaking Putin’s taboo on oligarch involvement in politics by adding an outspoken personal attack on German Gref.

Russia will inevitably join the WTO. But the chances of accession in Mexico City next year now look no better than 50:50. If accession only occurs in Putin’s second term, then the slower timetable will not have a fundamental impact on Russia’s transition. However, given the importance of WTO-related measures for overall domestic structural reform, any such delay would be at least marginally negative for investor perceptions of country risk. The damage would be minimised if the legislative programme was seen to be progressing steadily. Conversely, the damage will be worse if that programme stalls, if the protectionist lobby appears to be ruling the roost - casting doubt on accession even in 2005 — and, worst of all, if the perception gains ground that oligarchs like Deripaska ultimately dictate policy under Putin as they did under Yeltsin. Putin’s leadership will be tested in making the legitimate case for a steadier approach to WTO accession while countering perceptions of stalled reform and renewed “state capture” by oligarchs.

  1. 2. Match up the words and definitions:
  1. to endorse;              a)              to              be in charge of;
  2. to balk;              b)              to              declare that one regards (sth)              as              important while not

treating it as important in fact;

  1. to entail;              c)              to              express approval or support;
  2. to talk up;              d)              to              fail to stay in line;
  3. to hinge;              e)              a              period of time within which (sth)              is completed              or is

expected to be completed;

  1. to rule the roost; f) to be unwilling to do or to agree to (sth) difficult or

unpleasant; to stop or intentionally get in the way;

  1. to break the ranks; g) to make necessary;
  2. to pay lip services to; h) to stop because there is not enough power or speed to

keep going;

  1. to cast doubt on; i) hard, bare, or severe in appearance without any

pleasant or decorative addition;

  1. to stall;              j)              to              make someone to question the truth or value of (smth);
  2. to plough on;              k)              to              depend on; have as a necessary condition;
  3. stark realities;              1)              to              praise; to speak directly and frankly;
  4. timescale.              m)              to              force a way, sometimes violently.
  1. 3.
    Answer the following questions.
  2. Why may the autumn Geneva sessions be decisive for Russia?
  1. Is everyone in Duma in favour of WTO accession? Why?
  2. What hampers this accession?
  3. What are the most difficult concessions for Russia and why?
  4. What do you know about this organization?
  1. 4. Make an outline of the text and render it.
  1. 5. Choose an appropriate synonym from the box to the italicized words in the following sentences.

arguing              sagging              lodged              shocking              delicate

curbed              flourishing              into debt              spotlights              moaner

extension              worry              veiled              mope              plunge

  1. The economy is flagging, unemployment is rising and business is being stifled by taxes and red tape.
  1. The federal budget must be passed, but the government and opposition are wrangling over spending cuts and a proposed tax increase.
  2. He highlights two reforms that were meant to have been wrapped up by the end of last year but which remained stuck.
  3. His recent efforts have been stunning.
  4. The biggest and the most ticklish issue is the enlargement of the EU.
  5. The gmmblers have no alternative to put forward to the president’s approach: that if Russia wants economic prosperity and respect, the only choice is to join the outside world, not sulk in the corner.
  6. Economists are not the only ones who fret about inflation.
  7. The trouble is that economic forecasts are shrouded in an even thicker fog than usual.
  8. The slowing economy is pushing many state budgets into the red as tax revenues plummet.

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Источник: Е. Н. Малюга. Английский язык для экономистов: Учебник для вузов / Е. Н. Малюга, Н.              В. Ваванова, Г. Н. Куприянова, И. В. Пушнова. — СПб.: Питер,2005. — 304 с.: ил.. 2005

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