On August 22nd 2012, after an eighteen-year plus courtship, Russia joined the World Trade Organization (WTO). After so many years in the cold, some expected Moscow to warm to the commercial advantages that WTO membership affords. But Moscow’s relationship with its trading partners remains as chilly as before ascendancy to the Group. Were the expectations of post-WTO Russia, exaggerated? By George Lauriat, AJOTIt took over eighteen-years for Russia to join the WTO, so in December of 2012, when the European Parliament said that Russia was in “violation” of WTO rules, an opinion shared by the US and others; the judgment was perhaps a premature. Then again, Moscow has behaved over the last seven months like the WTO rules are more guidelines than edicts, similar to the way taxis worldwide treat traffic lights. Russians love a parables and the snake and the farmer might apply, leastwise from Moscow’s point of view. A farmer found a snake half frozen, buried in the snow. He brought the snake in and warmed it by the fire. The snake soon recovered and with a sudden snap, sank its fangs into the farmer’s hand. The surprised farmer asked “why?” The snake answered, “because, it’s my nature.” In this case, it is the nature of trade. Russia has always maintained high tariffs to protect domestic industries, which is at odds with the WTO mandates. With membership in the WTO, Russia must drop its average-import tariff from 10% to 7.8%. The tariff on agricultural items must drop from 13.2% to 10.8% and on industrial products from 9.5% to 7.3%. Besides simply lowering the tariffs, Russia is to remove barriers to imports that are byzantine in their complexity and arbitrary in their application. Russia’s vast natural resources have fueled economic growth. Last year, Russia’s GDP grew by a reported, 3.4% - first among the G-8 countries (US, UK, France, Germany, Japan and Italy). Only the US with a 2.2% growth in GDP was even close. In January, Russia recorded an $18.69 billion trade surplus, up from $17.13 billion in December of 2012. Relatively, strong oil & gas prices and strong demand for metals helped insulate Russia from the Euro crisis, which dragged down GDP’s in France, UK and Germany. Exporters see promise in the Russian market. There is pent up demand for consumer related products, as Russia’s middle class grows and spends the trade pattern widens. For example, Russia has become a main destination for US almonds – over $98 million worth in 2012. (See Top US Exports To Russia chart). There is a need for medical equipment, vehicles, machinery, PVC, aircraft & parts, and foodstuffs, particularly meats that has exporters salivating over the opportunities that Russia’s WTO membership presents. Medical equipment, for example has a 15% tariff that will eventually fall to 7% under the WTO. But the optimism is tempered by the Russian reality. With a 6.6% inflation rate, Russia might have a difficult time maintaining the current growth rate should global commodity prices soften. Economists forecast a growth rate for Russia of around 2.5% for 2013. This fact is not lost on economic planners in Moscow and contributes to inherent differences in trade policy between Russia and the WTO. When Pascal Lamy Director-General of the WTO visited Russia for the Gaidar Economic Forum meeting in late January, he reportedly was surprised that Russian officials were unclear about the nation’s obligations to follow the general rules of trade. Arkady Dvorkovich, Russia’s Deputy Prime Minister was quoted as saying, “All members of the WTO violate the rules of the organization. This is normal practice. I believe that Russia does not violate more than other countries do.” Lamy retorted, “ I am surprised that Russian officials still talk about WTO as some sort of future prospect… You re already in… it’s time to stop picking and choosing which rules to follow. You must comply with them all.” While Director-General Lamy has his opinion on Russian compliance to WTO strictures, it’s interesting to note that