Russia Considers Withdrawal from the WTO. This Will Accelerate Its Economic Collapse

Thursday, 26 May 2022

Russia is about to withdraw from the World Trade Organization (WTO).

Despite the propaganda - this organization has never been popular in Russia - the government is resisting this step, realizing its consequences.

A possible withdrawal from the WTO agreements could significantly accelerate the process of Russia's break with the world - now in trade. However, even refusing to withdraw from the organization will not stop it. Olena Omelchenko, a law firm partner of "Ilyashev & Partners," head of international trade, writes in the article Russia's Halfway: Moscow seeks to withdraw from the WTO but is afraid of this step.

Talks about the inevitability of withdrawal from the WTO began in Russia virtually immediately after the start of the war against Ukraine.

In March, MPs of the party "Fair Russia" submitted to the parliament a bill on withdrawal from the WTO, which was returned for revision due to a lack of government opinion. However, the government did not support it. The Foreign Ministry stated that leaving the organization is counterproductive for the country and will be a "gift for enemies."

Russia has again changed its mind during the three months of the war. Moreover, some WTO members have announced the suspension of their WTO concessions on Russia (EuroPravda previously reported about this).

On May 17, the Russian Ministry of Foreign Affairs prepared a list of international agreements that could potentially be denounced by parliament. Among them were WTO agreements.

However, immediately after that, Russia decided to reduce the voltage level.

Even the Russian government is making no secret: withdrawing from the WTO will push Russia back several decades, strengthen its isolation and significantly weaken its influence as a regional trading partner.

Besides, Russia will not only be unable to participate in the formation of global trade rules but will also seek to lose its status as a market economy country.

In addition, Russia will not be able to participate in the multilateral trade dispute settlement mechanism in which it is currently very active.

Withdrawal from the WTO could lead to market losses, even with Russia's loyal trading partners: China, India, Southeast Asia, Africa, and South America.

And the most important is that even the preservation of WTO membership cannot solve the problem of the Russian economy's isolation. It is possible only with the end of the war.

By and large, Russia's economy is already doomed to stagnation, and Russian exporters are doomed to find new terms of trade, regardless of the proposals of the Russian government on the strategy of further WTO membership.

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