Social Scientist. v 28, no. 326-327 (July-Aug 2000) p. 41.


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RUSSIA'S NATIONAL INTERESTS 41

WTO is the problem of subsidizing the economy. The distinguishing feature of Russia's position is that it already possesses the market mechanisms of management (although insufficiently developed), and has abandoned a number of restrictions on economic activities (including those applied in the developed WTO member countries). Nevertheless, sharp disproportions still exist in her economy. The elimination of such disproportions or softening their effects may require state support. Therefore it is desirable that Article 29 of the agreement on subsidies and compensation measures should be applied to Russia. This article envisages that countries which have to transfer from centralised planning to a market economy have the right "to implement programmes and take measures required for such transformation", including the utilization of subsidies, during seven years after the agreement comes into force.

Extremely acute for Russia is the problem of subsidies to crisis-stricken areas permitted by the WTO (especially for the first five years). The importance of subsidies is caused by our country's geographical position. Our country is among the world's climatically most severe ones, and is notable for here distant communications, therefore it is absolutely necessary to separate from compensatory measures the subsidies allotted to the northern regions in order to support normal living conditions, regular communications, stable work of enterprises of nation-wide importance there.

Essential for Russia would be the development of trade in services, the role of which for the global economy is growing fast. However, Russia's joining the WTO and GATS (General Agreement on Trade in Services) entails great difficulties. Firstly, the domestic services sector is not fully provided with necessary legal facilities that could regulate this sector and meet the GATS requirements. For instance there are so far no laws on agency in export and import transactions and on international technology transfer, out of date are regulations on transportation and there are no legal facilities even for the space exploration sector. Secondly, the Russian services sector is not competitive enough to actively participate in expanding international transactions, although in the future Russia could play a more active role there.

Therefore, in accordance with the WTO regulations, Russia will be compelled to prepare (for the list of concessions on services) a system of elaborate controls on the access of foreign service providers. With Russia now being more integrated in the global economy, it is impossible to attain a sustainable economic growth without a more active external economic policy.



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