Russia’s Economic Development Ministry plans to grant preferences to domestic producers under state procurement programs to compensate for their losses from lower import duties after Russia joins the WTO, the Kommersant business paper reported on Monday, citing the ministry’s draft resolution.
The list of products that will get special treatment include pork, sugar, agricultural machinery and paper. After Russia joins the WTO this summer, it will have to lower the import duties on these products, opening the door wide open for cheaper imports.
The ministry intends to compensate these losses with its newly proposed changes to the state procurement system.
Russia’s state orders currently account for 13 percent of the country’s gross domestic product. Belarus and Kazakhstan may also enjoy the same preferences as Russia’s partners in the Customs Union between the three ex-Soviet states.
Russian hog farmers have turned to the Russian government with requests to protect the sector against foreign rivals, claiming Russia’s accession to the WTO and the subsequent lowering of import duties will cause mass bankruptcies amongst Russian agricultural producers.
In mid-February, the Russian Union of Industrialists and Entrepreneurs asked the Russian government to allocate some 400 billion rubles ($13 billion) to protect the domestic agricultural sector.
