Russia is being prepared for entering World Trade Organization (WTO). The political decision has been taken and clearly announced by President Vladimir Putin. The Government carries on an active work, trying to achieve the support of Russia‘s candidacy by the most influential WTO members. But inside this country the opinions on the expediency of this step still differ. Sharp debate on this point is being carried on by parliamentaries, analysts, representatives of business circles, and, sure, the press. Eurasian Metals, having no opportunity to present the whole spectrum of opinions, brings to the reader‘s notice a view of the problem by metallurgical business. At the journal‘s request, Svetlana Stepanova, Chairman of the Board and Valery Sergeev, Counsellor, Union of Metals Products Exporters of Russia, comments on the problem.
The iron & steel and non-ferrous metals industries are integrated into the world economy to a larger extent than other sectors of the Russian economy. Its export supplies, having a prominent place in the markets of Europe, Asia and America, account for 60 to 70 % on the average in the products sales of the works/plants. That is why the forthcoming joining WTO is perceived by the Russian exporters as a natural extension of the integration, thus they count on the strengthening of their positions in the world trade. Along with it, in order to become an equal partner in the world trade system, the Russian side still needs a solution of some organizational and economic problems.
The work on the forthcoming joining WTO by Russia was at the first stage reduced to, for the most part, the establishment of a required tariff rate protection level, i.e., adjustment of import tariff rates and adoption of measures on bringing the valid legislation in line with the terms and conditions of the basic agreements which form a normative basis of WTO.
Lately, this activity has become much more vital. The concrete conditions of joining started to be discussed. The working group‘s report will have to enlist additional commitments to be undertaken by the joining party and potential privileges among which the most important one is a delay in suiting the Russian legislation, rules and regulations to the requirements of WTO.
The world code of trade legislation was established deliberately step-by-step while Russia has to introduce it during a few years. The national legislation will have to be brought in conformity with the requirements of WTO. This relates to the laws on state regulation of foreign trade activities, on measures on protection of Russian economic interests in foreign trading in goods, on licensing export/import, on intellectual property, on banks and bank activities, on exchange regulations and control, etc. A preparation of legislation in the filed of standardization equal to that adopted by WTO members is pending.
Russia will have to revise customs tariff rates so that after a certain period of time they will be nearing the level developed in WTO, to change an economic subsiding practice and so on. Presently in Russia the weighted average tariff rates on industrial goods are approximately 10 % while in industrialized countries they are 1.7-4.8 %. For a certain compromise with trade partners to be reached, the Russian side examines proposals for possible tariff concessions on products of iron & steel and nonferrous metals industries, chemical & oil-chemical, forest, wood-processing and pulp & paper, medical, light and machinebuilding sectors.
The concept of WTO, in brief, implies an ultimate provision of freedom of cross-border movement of commodities, services, immaterial goods. In Russia an opinion that joining WTO will not bring any changes to enterprises oriented to domestic market and low-dependent on foreign trade is rather common. In fact, any production operations make use of raw materials, equipment, accessories, services, whose cost can be substantially changed under the effect of WTO.
For steel and non-ferrous metals works/plants, the results of joining WTO are on the whole evaluated as positive. However, the problem must be wider viewed, with due regard to intersectoral interaction in the industry at large. Thus, if metal-consumers – automotive sector, agricultural machinebuilding, machine-tool industry, shipbuilding – are not able to compete foreign makers and have to lower production, steel and nonferrous metals producers will suffer substantial losses. To ensure their presence in the external markets, exporters must carry out large-scale modernization based on resource-saving technologies and research & designgineering works.
Iron & steel and nonferrous metals industries are the largest consumers of power and energy resources and transport services. An unregulated drastic increase in tariff rates in this field may cause an unprofitable position of a whole number of enterprises, especially power-intensive ones, like ferroalloys and aluminum plants. Growth of costs will inevitably lower price competitiveness of all exported products.
The conditions of granting financial and insurance services may substantially change. At last, one must point to the problem of changing standards, specifications, test and certification procedures. Despite large work carried out in the steel and nonferrous metals industries, and the fact that 45 % of the products have been attested under international standards, it is not enough: the rate of harmonization of standards and certification must be 70 to 80 %.
Discrimination measures introduced by many countries with respect to Russian metal products exports, are in fact a direct violation of existing WTO standards. That is why, as believed by many exporters, an entrance to the international trade organization will help them to succeed in gaining equal conditions in trade operations. As a WTO member, Russia will be able to use a special mechanism in settling trade disputes.
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Over 50 antidumping measures are being applied against Russian metals products exporters worldwide, including India, Egypt, Turkey, Taiwan, Indonesia, Mexico, etc. Export quotas applied to Russian metals products are employed in the USA and EU. These measures contradict Article VI (Antidumping and Compensation Duties, Definition of Dumping, Criterion of Marketability of National Economy) and Article XI (General Prohibition of Quantitative Restrictions) of GATT
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At the same time, the court proceeds existing in WTO do not guarantee a cancellation of antidumping procedures and other restricting measures with respect to Russian exports. Analysts believe that a considerable part of restrictions on supplies of steel and other metals products, in particular, high value ones, will still be preserved. In Russia this practice is viewed as an inevitable show of competitive life.
By and large, the balance of advantages and losses for the Russian steel and nonferrous metals industries due to Russia‘s joining WTO will depend on how effectively enterprises and companies can interact with their foreign partners and how successfully they can introduce the required changes in their production within a specified transient time period. 
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