General Motors and the Government of St. Petersburg have
signed a memorandum to promote the principles of cooperation of field research
to promote the successful development of the Russian automotive industry. Such
cooperation is a sign of progression and partnership between Russia and foreign
corporations. Currently, inefficient production and substandard products holds
the Russian automotive industry in shackles. The government has long protected
this industry by imposing astronomical tariffs of 30% on imported vehicles.
Such protectionist policy has allowed the automotive sector to become
complacent in its production. Currently a resident of Russia can purchase a X
for a fraction of the price it would cost to purchase an imported vehicle, such
as a Ford or Chevrolet. However, this is all about to change as Russia has
joined the WTO which mandates a scheduled of concession which includes a
gradual reduction in the tariffs of automobiles. Consequently, the Russian
automotive sector must make itself competitive if they intend to remain relevant.
Cooperation with automotive giants, such as GM will allow this to happen
because they can utilize they can implement foreign production method into
their own factories.
The Russian auto market has previously been overlooked,
but now forecasts project that the Russian markets offer huge potential for
foreign investors. As I have discussed in previous posts, with the falling
price of oil Russia is desperate for a new source of revenue, one of those
being foreign direct investment. Foreign manufactures, such as GM and Ford see
huge potential in the nation’s automotive markets as projections suggest that
demand will grow at a 6-8% rate over the next fifteen years. While this is
exciting news for automakers outside of Russia, domestic automaker and their
employees are justifiably trembling at the reduction of tariff rates. Much of
Russia’s hesitation in joining the WTO stemmed from specifically that reason. Russia
was only ready to join the organization when a deal to allow for the gradual
reduction of automotive tariff’s was put in place. Russia’s trepidation stems
from fears of lost jobs and a loss of sovereignty. Issues that is present in
many counties. However, Russia and its citizens must face the realties that WTO
accession will present and either become competitive in the auto industry or
specialize in other sectors.
The Russian government has attempted to circumvent its
WTO obligations by past discriminatory legislation. On July 13th the
Russian Duma passed a law imposing a utilization fee cars which has an effect
of discriminating against imported vehicles. The utilization fee is purported
to address environment concerns regarding the disposal of vehicles but it
provides exceptions to domestic manufactures. Under the WTO GATT article, III a
country must provide national treatment to all imports. In effect, this is an
equal protection clause, requiring all imports to be taxed equally to domestic
“like products”. Taxes of this nature are a violation of the principle of the
WTO and will not help the Russian auto-manufacturing sector in the long run.
What the industry must do is just what St. Petersburg covenant with GM seeks to
accomplish. That is cooperation and advancement of the industry so that it may
compete of imports without any sort of protectionist laws.
IET
Manufacturing Engenerr August/September, The Russian invasion by Mark Venables
20
марта 2012 Материалы о вступлении России в ВТО
В России
снижены импортные пошлины на автомобили
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