Russia and the WTO: Realpolitik by the Rules of Free Trade

Abstract

This essay responds to Professor William E. Butler’s lecture titled 'Russia and the WTO System: Law, Regionalism, Politics' delivered at the University of Memphis, on September 27, 2013.Gaining WTO membership required Russia to make various trade concessions. Eventually, Russian consumers will benefit from WTO membership, and Russia may benefit from access to WTO dispute settlement mechanisms. However, Russia confronts problems that “free trade” will not solve: poor governance, corruption, a shrinking labor force, poor public health, and average human capital. WTO membership is a positive but relatively insignificant development for Russia, as Russia's exports are mainly energy products that it trades through bilateral arrangements. Perhaps more promising from Russia’s view is the Eurasian Customs Union, a customs union, which is Russia's latest attempt to improve upon failed post-Soviet integration projects and, at the same time, to “pivot” towards rising economies of Asia. The widespread perception is that the Eurasian Customs Union is a Russian geopolitical instrument that has divided Ukrainian sentiment between the European Union and Russia's bloc. That division led to protests, the Yanukovich government's downfall, and Russia's intervention in Crimea and east Ukraine. China, already a major economic player in Eurasia, is challenging Russia's economic and political influence in the region.