Alexander Knobel, Head of International Trade Department of the Gaidar Institute, told “Kommersant” about the consequences of Russia’s withdrawal from the World Trade Organization (WTO).
Russia may withdraw from the World Trade Organization. The Foreign Ministry has proposed to the Duma that the agreements with the WTO and the WHO be terminated. The Russian authorities believe that sweeping sanctions due to military action in Ukraine are destroying the WTO system of rules. Russia was previously stripped of its "most favored nation" status by the USA and Japan followed by similar statements from 14 other countries received by the WTO. This means that domestic imports to these states will be subject to higher tariffs. However, withdrawing from the organization could complicate trade with friendly countries as well, says Alexander Knobel.
"Most likely, the decision regarding membership or withdrawal from the WTO will be made by the President. In my opinion, it is beneficial for Russia to stay in the organization, because the most-favored-nation treatment and WTO norms in general have been and are being followed with India, China, South-East Asia, Africa, South America. However, in trade and economic relations with the EU countries, the USA, Canada, Australia, New Zealand, Norway and Switzerland, they are not followed, regardless of whether Russia is a WTO member or not. In case of Russia’s withdrawal, they as well as friendly states, will not be restricted in any way to impose trade sanctions on Russia, duties or other measures, and it will not be a violation of any obligations on their part. Since there is no alternative organization uniting almost all countries of the world into some system of trade agreements, there is no point in such actions either", Alexander Knobel believes.
The draft law on Russia's withdrawal from the WTO was submitted to the State Duma in mid-March. Deputies believed it was needed to protect the economy and respond to sanctions. However, the Foreign Ministry then disagreed with the proposal and called it a "gift to enemies", which would not pay dividends to the Russian economy.