Whenever the west sees Russia, they develop a cold foot. The allies attempted to throw Russia out of WTO, but they have faced a massive setback. According to some recent media reports, Russia has no plan to leave the World Trade Organization (WTO), despite attempts by some countries to “squeeze” it out, a Russian diplomat said in an interview with RIA Novosti.
Reportedly, Dmitry Birichevsky, the director of the Department of Economic Cooperation of the Russian Ministry of Foreign Affairs has stated that they carefully examined all their possibilities for participating in multilateral trade, weighing up the pros and cons of full membership in the WTO. Thus bringing, Russia to the conclusion, that there are solid reasons for Russia to remain in the organization as a full member, so as to maintain steady ties with developing countries that are eager to collaborate on equal terms and for mutual benefit.
Birichevsky also noted that the WTO is an indispensable global platform on which Russia forms its trade and economic relationships with states that have not taken hostile actions against Russia. Now, this is indeed a big news owing to the fact that, just seven months ago, Russia was the one that was calling for leaving WTO. If one remembers, in view of the economic sanctions imposed by NATO members and other European Union countries on Russia for invading Ukraine, Moscow had planned to quit the World Trade Organisation (WTO).
This decision was mulled in response to the WTO’s decision to remove its “most favoured nation (MFN)” status for invading Ukraine. Several countries have suspended Moscow’s trade preferences and imposed tariffs in excess of what WTO rules typically allow. Russia may would have, therefore, severed ties with prominent international bodies, including the WTO and the World Health Organisation (WHO), accusing the bodies to have “neglected all obligations towards our country” according to Pyotr Tolstoy, deputy speaker of Russia’s Assembly, or Duma. However, the Russian stance has now changed entirely.
The change of heart!
Russia now believes WTO is crucial for them. Why? Well, the western pressure could be the primal reason behind it. Well, ever since Russia declared its intention to leave the WTO, western nations have been in the air floating with happiness. The U.S. and its allies were the very first to propose the removal of most-favored-nation status given to Russia.
This most-favored-nation status is a guiding principle of trade rules. After the U.S. and other nations denied Russia this status, they were free to impose tariffs on Russian exports. As a result, the cost of Russian goods rose, making these products more expensive and gradually less desirable. Over time, the West believed Russia’s coffers would be harder to fill. But, they had no idea what is coming for them next.
The Russian economy continued to grow and flourish in spite of the sanctions, while the western economies suffered significantly. Energy and cost of living crises have crippled European economies, including powerhouses like Germany. The cheap natural Russian gas supply that was previously used to power factories, generate electricity, and heat homes was drastically reduced by Russia. Governments in Europe began to look desperately for new supplies as a result. Europe has managed to overcome its energy shortage.
However, there is still a genuine risk of an unanticipated recession. Despite ongoing efforts, the likelihood of a recession, bankruptcies, and economic fallout are still a omnipresent. On the other hand, Russia sought out novel approaches and made attempts to forge fresh connections and trade routes with Asia and the Middle East.
As a result, Western nations now came to the conclusion that only throwing Russia out of WTO is the solution to fix their woes. A number of countries pushed to kick Russia out of the organization. However, Russia has now made it ardent that they will stay within the trade umbrella.
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A right decision!
And why not, WTO is indeed crucial for Russia if it wishes to continue to expand its trade relations with other parts of the world. Despite all the allegations that WTO is just another western stooge, the fact that prevails is that the organization is important for ensuring a fair, equitable, and mutually beneficial trading system. WTO helps countries to develop their economies through increased trade and investment. WTO supports nations’ economic growth by promoting trade and investment. It also aids in the expansion of the world economy by giving nations a forum for dialogue and dispute resolution.
It supports the defense of intellectual property rights by countries. Additionally, the WTO promotes international communication and cooperation, both of which are crucial for the stability and prosperity of the world economy. It’s like a magic wand that could make economic dreams come true. The greatest example to prove this statement is China. In 2001, the Chinese economy had seen significant growth and development only because of its WTO membership.
WTO helped China increase its exports and attract foreign investment. This allowed Chinese businesses to benefit from economies of scale and access to new technologies and markets. Russia stands to lose a great deal if it were to leave the World Trade Organization (WTO). Russia would lose the ability to access the global market as easily as it currently does. This would likely result in fewer exports and imports, as well as higher tariffs on foreign goods.
It would also make it difficult for Russian companies to compete in global markets, as they would not have the same access to preferential treatment that they currently do. Additionally, leaving the WTO might lead to a decrease in foreign investment, as companies may be less likely to invest in a country that is not a member of the WTO. Overall, there will be a significant decrease in Russia’s economic prosperity, as its participation in the global economy would be severely limited.
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If Russia were to leave the WTO, all the economic gains it made following the Ukraine War would be for nothing. Russia has therefore made a really wise decision by remaining under the economic awning. The leaders in the West are saddened by this, though. They must now start over and come up with a fresh idea to stimulate the Russian economy. Or better, stay quiet for some time now.
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