MOSCOW, RUSSIA (BNO NEWS) -- Russian President Vladimir Putin on Saturday signed a bill ratifying the country's accession to the World Trade Organization (WTO), clearing the last hurdle to finish an 18-year-long process to join the global trade body.
The Kremlin press office said Putin signed the federal law on Saturday to ratify its Accession Package. The Russian Federation will become a member of the trade body after a waiting period of 30 days. This could be as early as August 20, depending on when the Russian government officially notifies the Secretariat of the WTO.
Russia was the biggest economy in the world still outside the WTO, and its accession is considered significant from both a multilateral and bilateral perspective. Russia first applied to join the WTO in June 1993, just two years after the collapse of the Soviet Union, and the accession next month will end 18 years of negotiations.
Russia and the European Union (EU) had long been in disagreement because Russia's export duties on lumber increased the cost of inputs for European manufacturers such as the Nordic timber and paper industries. Russia wanted to introduce prohibitive rates to stimulate the wood processing industry but Finland, one of the main consumers of Russian timber, strongly opposed the initiative.
The path to Russia's accession to the trade body was largely cleared when it reached agreements with the United States and the EU, including a deal which will reduce customs tariffs from a current average level of 9.5 percent to 7.4 percent in 2013, 6.9 percent in 2014 and 6.0 percent in 2015.
However, after the EU gave its backing to Russia's entry bid in December 2010, the government of Georgia insisted it would not allow Russia to join the WTO unless it cedes control of customs in the breakaway Georgian regions of South Ossetia and Abkhazia. The dispute was resolved last year when the Swiss brokered a deal between the two parties.
The Eighth WTO Ministerial Conference, which took place in Geneva in December 2011, endorsed the accession of Russia.
The lower house of Russia's parliament, the State Duma, and the upper house, the Federation Council, also approved the accession this month. With Putin's signature now on the bill, Russia will become the 156th member of the WTO next month. It is expected to benefit both the EU and Russia.
Canadian International Trade Minister Ed Fast was first to congratulate Russia on Saturday for ratifying its accession to the WTO, calling it a milestone in the country's history and an important development for the trade body. "As one of the world's largest economies, Russia must be part of our efforts to liberalize global trade and fight protectionism at the WTO," he said.
He added: "Canada will benefit from the market access provisions in both goods and services that Russia will commit to as part of its WTO obligations. Russia's accession to the WTO will provide a more transparent and predictable environment in which Canadians can do business."
The World Bank expects Russia's accession to the WTO will bring a boost worth 3.3 percent of Russian gross domestic product (GDP) in the first three years after joining. Over the next ten years, the World Bank expects this gain will increase to about 11 percent of the country's GDP.
The EU is also expected to benefit as Russia is its third largest trading partner after the United States and China.
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