By Simon Miller
Russia's 19 year wait to join the World Trade Organisation (WTO) ended today when it became the 156th member.
Following years of negotiations Russia has committed to fully apply WTO provisions with an average final bound tariff of 7.8% for goods and specific commitments on 11 service sectors including banking.
The Russian Federation will review market access requirements for the establishment of direct branches of foreign banks and securities firms in the context of future negotiations on the accession of the Russian Federation to the OECD or within the framework of the next round of WTO multilateral trade negotiations.
As a result, foreign banks will be allowed to establish subsidiaries and there will be no cap on foreign equity in individual banking institutions.
However, the overall foreign capital participation in the banking system of the Russian Federation would be limited to 50% (not including foreign capital invested in potentially privatised banks).
"It is gratifying to see that after 18 years of sometimes uneasy negotiations the process of WTO accession is completed today. The agreement as negotiated brings us into the system of multilateral trading rules, creating new opportunities for our traders and investors and enabling us to protect their commercial interests even more effectively than before," said Maxim Medvedkov, chief negotiator for the Russian Federation.
The South Pacific island nation of Vanuatu will also join the WTO on 24 August and WTO director-general Pascal Lamy welcomed the two members after a "long journey for both countries".
He added: "Both accessions show that joining the WTO remains high on the countries’ agendas since trade can bring a predictable and stable basis for economic growth. This is especially important as the world goes through troubled times and continues to suffer from one of the worst global economic crisis in memory."
In a statement, London lobby organisation TheCityUK commented: "As in the case of many other WTO accessions, Russian accession is a sequenced process requiring a series of phased market-opening steps. TheCityUK and its members look forward to the market-opening that will ensue."