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34Research article UDC 339
doi: 10.47576/2782-4586_2022_2_20
ACCESSION TO THE WTO AS A WAY OF GAINING ACCESS TO A HIGHLY EFFECTIVE METHODOLOGY FOR JUDGING INTERNATIONAL ECONOMIC CONFLICTS
Martemyanov Igor A.
Omsk State University named after F. M. Dostoevsky, Omsk, Russia
Abstract. The purpose of the chapter is to determine the perspectives of accession to the World Trade Organization as a method of modem Russia's receiving access to highly effective methodology of regulation of international economic conflicts. The author use regression analysis for determining and comparing the influence of the volume of export and import on the growth rate of GDP in constant prices in Russia before the accession to the WTO (2005-2011) and during the period of membership in the WTO (2012-2018). Statistics of Russia's participation in international economic disputes within the WTO are analyzed. The information and empirical basis of the research includes the materials of the IMF and the WTO. It is determined that the advantage of the accession to the WTO - receipt of access to the highly-effective methodology of regulation of international economic disputes -is not obtained by modem Russia. Instead, elimination of customs barriers opened access to the Russian markets for foreign business structures, while Russian business structures have low global competitiveness - which led to reduction of foreign trade balance and complicated the process of provision of national economic security of Russia. The reasons of this problem are complexity of conflicts within the WTO - due to lack of experience, Russia initiates minimum conflicts, and its more experienced trade partners use the arbitrary platform of the WTO for protecting their interests, damaging Russia's interests. Another reason is the act that the WTO's principles are aimed at protection of exporters' interests, while importers' interests are not protected. It is substantiated that this problem could be solved by the offered preventive practice, which precedes the alternative methods of conflict resolution and which consists in conclusion of international trade agreements by the WTO members that allow specifying and protecting the interests of exporters and importers. This will increase the effectiveness of the methodology of regulation of international economic conflicts within the WTO.
Keywords: World Trade Organization; modem Russia; international trade; highly effective methodology of regulation of international economic conflicts; alternative approaches of conflict resolution.
For citation: Martemyanov I. A. Accession to the wto as a way of gaining access to a highly effective methodology for judging international economic conflicts. Journal of Monetary Economics and Management, 2022, no. 2, pp. 20-27. doi: 10.47576/2782-4586 2022 2 20.
ВСТУПЛЕНИЕ В ВТО КАК СПОСОБ ПОЛУЧИТЬ ДОСТУП К ВЫСОКОЭФФЕКТИВНОЙ МЕТОДОЛОГИИ РАССМОТРЕНИЯ МЕЖДУНАРОДНЫХ ЭКОНОМИЧЕСКИХ КОНФЛИКТОВ
Мартемьянов Игорь Анатольевич
Омский государственный университет им. Ф. М. Достоевского, Омск, Россия
Аннотация. В статье анализируются перспективы вступления во Всемирную торговую организацию как способ получения современной Россией доступа к высокоэффективной методологии урегулирования международных экономических конфликтов. Автор использует регрессионный анализ для определения и сравнения влияния объемов экспорта и импорта на темпы роста ВВП в сопоставимых ценах в России до вступления в ВТО (2005-2011 гг.) и в период членства (2012-2018 гг.). Анализируется статистика участия России в международных экономических спорах в рамках ВТО. Информационно-эмпирическую базу исследования составили материалы МВФ и ВТО. Определено, что преимущество от вступления в ВТО - получение доступа к высокоэффективной методологии урегулирования международных экономических споров - современная Россия не получает. Вме -сто этого устранение таможенных барьеров открыло доступ на российские рынки для иностранных бизнес-структур, в то время как российские бизнес-структуры имеют низкую глобальную конкурентоспособность, что привело к сокращению внешнеторгового баланса и усложнило процесс обеспечения национальной экономической безопасности России. Причинами этой проблемы является сложность конфликтов внутри ВТО - из-за отсутствия опыта Россия инициирует минимальные конфликты, а ее более опытные торговые партнеры используют произвольную платформу ВТО для защиты своих интересов, нанося ущерб интересам России. Другой причиной является то, что принципы ВТО направлены на защиту интересов экспортеров, а интересы импортеров не защищены. Решить данную проблему может предложенная превентивная практика, предшествующая альтернативным методам разрешения конфликтов и заключающаяся в заключении членами ВТО международных торговых соглашений, позволяющих уточнить и защитить интересы экспортеров и импортеров. Это повысит эффективность методологии регулирования международных экономических конфликтов в рамках ВТО.
Ключевые слова: Всемирная торговая организация; современная Россия; международная торговля; высокоэффективная методология урегулирования международных экономических конфликтов; альтернативные подходы к разрешению конфликтов.
I n the conditions of formation of market relations and under the influence of globalization since the 21st century, Russia has been implementing the strategy of international production specialization. Though this specialization is wide and covers a vast variety of spheres of national economy (including the processing industry and the agro-industrial complex), apart from the main oil and gas sphere, it differs from the previous strategy of diversification, which contributes to full self-provision of economy with (at least) key products and services.
Involvement in the process of international labor division increased the dependence of the Russian economy (in the aspect of national economic security) from foreign economic activities. Similarly, to internal conflicts in B2B and
B2C markets, conflicts of economic subjects also appear during conduct of international trade -however, they have specific features. Firstly, international economic conflicts are resolved at the global level for the provision of independence and objectivity of justice, which complicates the process of initiation and resolution of conflicts.
Secondly, consequences of conflict resolution are manifested not only in activities of the economic subjects that participate in them (complainant and defendant) but also in functioning of national economies of their countries. This emphasizes high responsibility of participants of conflicts and interest in search for their most optimal solutions for preserving the balance of the global economic system. Thirdly, during resolution of international economic disputes, the structure of interested
parties is very complex, which leads to complexity of consequences of this process, which are manifested in participants of the conflicts and other countries (their trade partners).
The above peculiarities lead to high importance of the issue of development of a highly effective methodology of regulation of international economic disputes. In the modem economic theory and practice, solution of this problem is viewed in the context of creation of specialized international organizations in international trade, and the WTO is the most popular of them.
The working hypothesis of the chapter is the idea that Russia's accession to the WTO should provide clear advantages for regulation of international economic disputes, which, in its turn, should ensure development of the Russian entrepreneurship and acceleration of economic growth. The purpose of the Chapter is to determine the perspectives of usage of accession to the
WTO as a method of modem Russia's receiving access to a highly effective methodology of regulation of international economic conflicts.
The issues of development of international trade and the emerging contradictions, which lead to international economic conflicts, are studied in detail (Ding et al., 2019; Inshakova, Goncharov, & Marchukov, 2019; Inshakova et al. (2016); Meinen & Raff, 2018; Olakojo, 2018; Popkova & Sukhodolov, 2017; Yakubu et al., 2018). The principles of organization of international trade within the WTO, as well as potential and current advantages from the participation in this organizations, which are obtained by the modem economic systems, are analyzed (Collins, 2018; Du, 2018; Grey, 2018; Li & Tu, 2018; Yildirim, 2018).
The necessity for Russia's joining the WTO and experience of Russia's participation in this international organization are studied (Connolly,
Growth rate of GDP
Balance of Foreign
in Constant Prices, Volume of Import, Volume of Export, Trade Balance, USD
Year % USD Billion USD Billion Billion
— Vt *i *2 —
2005 6.376 125.434 243.798 118.364
2006 8.154 164.281 303.551 139.270
2007 8.535 223.486 354.403 130.917
2008 5.248 291.861 471.606 179.745
2009 -7.821 191.803 303.388 111 585
2010 4.504 248.634 400.630 151.996
2011 4.048 323.831 522.011 198.180
— y2 *3 *4 —
2012 3.518 335.446 529.256 193.810
2013 1.279 341.269 521.836 180.567
2014 0.718 307.877 496.807 188.930
2015 -2.838 193.019 341.419 148.400
2016 -0.248 191.588 281.851 90.263
2017 1.400 237.788 353.116 115.328
2018 1.444 244.620 363.243 118.624
Source: Compiled by the authors based on International Monetary- Fund (2018).
TABLE 1 - Dynamics of Growth Rate of GDP in Constant Prices, Volume of Import and Export, and Foreign Trade Balance in Russia before Accession to the WTO (2005-2011) and During Membership in the WTO (2012-2018)
2015; Jordan, 2017; Popkova, 2017; Popkova & Sukhodolov, 2017a,b; Shaydullina, 2018). The performed content analysis of the scientific literature showed that access to a highly effective methodology of regulation of international economic conflicts is studied as one of the key advantages and goals of Russia's joining the
WTO.
However, this advantage is either hypothetical (given in forecasts of consequences of Russia's accession to the WTO, which were compiled several years ago) or based on expert evaluations. Absence of empirical studies of the given problem leads to its insufficient scientific elaboration. In
order to fill this gap, the authors use the method of regression analysis and determine and compare the influence of the volume of export and import on growth rate of GDP in constant prices in Russia before accession to the WTO (2005-2011) and in the period of membership
in the WTO (2012-2018). The information and empirical research basis include the materials of the IMF (Table 7.1).
Results of the performed (on the basis of the data of Table 7.1) regression analysis are given in Tables 2, 3.
TABLE 2 - Characteristics of Regression Dependence of Growth Rate of GDP in Constant Prices on the Volume of Import and Export in Russia Before Accession to the WTO (2005-2011)
Regression Statistics
Multiple R R-square
Normed R-square Standard error Observations
0.5918 0.3502 0.0253 5.4802 7
Dispersion Analysis
df SS MS F Significance F
Regression 2 64.7329 32.3664 1.0777 0.4223
Leftover 4 120.1286 30.0321
Total 6 184.8615
Coefficients Standard Error t-Statistics R-Value Lower 95% Upper 95%
Y-Crossing -8.4189 11.3556 -0.7414 0.4996 -39.9470 23.1093
x> -0.3109 0.2141 -1.4521 0.2201 -0.9054 0.2836
X2 0.2216 0.1509 1.4681 0.2160 -0.1974 0.6406
Source: calculated by the authors.
TABLE 3 - Characteristics of Regression Dependence of Growth Rate of GDP in Constant Prices on the Volume of Import and Export in Russia During Membership in the WTO (2012-2018)
Regression Statistics
Multiple R 0.8773
R-square 0.7697
Normed R-square 0.6546 Standard error 1.1436 Observations 7
Dispersion Analysis
df SS MS F Significance F
Regression 2 17.4852 8.7426 6.6848 0.0530
Leftover 4 5.2313 1.3078
Total 6 22.7165
Standard
Coefficients Error t-Statistics R-Value Lower 95% Upper 95%
Y-crossing -4.8277 1.9891 -2.4270 0.0722 -10.3504 0.6950
X3 0.0898 0.0331 2.7134 0.0534 -0.0021 0.1817
X4 -0.0441 0.0209 -2.1032 0.1033 -0.1022 0.0141
Source: Calculated by the authors.
As shown in Tables 2, 3, both determined regression dependencies are not statistically significant at the level of significance a=0.05, as significance F exceeds 0.05 (they constitute 0.4223 and 0.0530), all r-values also exceed 0.05 and multiple R do not reach 0.90 (constituting 0.5918 and 0.8773). Therefore, foreign economic
activities had vivid positive influence on the Russian economy (in the aspect of acceleration of the rate of economic growth) neither before nor after the accession to the WTO. For determining the influence of the WTO on economic security of modem Russia, trend analysis of foreign trade balance is conducted (Figure 1).
Figure 1
As shown in Figure 1, before the accession to the WTO Russia had positive trend of foreign trade balance, which was replaced by the negative trend after the accession to the WTO. Therefore, participation in this international organization led to aggravation of the problem of provision of Russia's national economic security.
Brief information regarding Russia's participation in the conflicts within the WTO is presented in Tables 7.4-7.5.
As shown in Table 7.4 and 7.5, according to the data as of November 29, 2018, Russia initiated 7 disputes within the WTO (as a complainant) and is involved in
No. Short Title Respondent Request for Consultations Received: Panel Report Circulated:
DS474 EU—Cost Adjustment Methodologies (Russia) European Union 23 December 2013 —
DS476 EU—Energy Package European Union 30 April 2014 10 August 2018
DS493 Ukraine—Ammonium Nitrate (Russia) Ukraine 7 May 2015 20 July 2018
DS494 EU—Cost Adjustment Methodologies 11 (Russia) European Union 7 May 2015 —
DS521 — European Union 27 January 2017 —
DS525 — Ukraine 19 May 2017 —
DS554 — United States 29 June 2018 —
Source: compiled by the authors based on World Trade Organization (2018). TABLE 4 - Short Information Regarding Russia's Participation in Conflicts Within the WTO as a Complainant
9 disputes as a defendant. That is, from the quantitative point of view, the advantage of participation in the WTO in the aspect of conflict resolution is doubtful, as arbitrage of this international organization could be primarily used in the interests of international trade partners in Russia (damaging the Russian interests). For illustration purposes, the map of Russia's
participation in international economic disputes within the WTO is presented (Figure 7.2).
As shown in Figure 7.2, the list of participants of international trade disputes with Russia is limited quantitatively (with the EU, Ukraine, Japan, and the USA) and geographically (the disputes are mainly with neighbors).
TABLE 5 - Short Information Regarding Russia's Participation in Conflicts Within the WTO as a Defendant
No. Short title Complainant Consultations Received: Panel Report Circulated:
DS462 Russia—Motor Vehicles European Union 9 July 2013 —
DS463 — Japan 24 July 2013 —
DS475 Russia—Pigs (EU) European Union 19 August 2016 23 February 2017
DS479 Russia— Commercial Vehicles European Union 21 May 2014 27 January 2017, Appellate Body Report circulated: 22 March 2018
DS485 Russia—Tariff Treatment European Union 31 October 2014 12 August 2016
DS499 Russia—Railway Equipment Ukraine 21 October 2015 30 July 2018
DS512 Russia—Traffic in Transit Ukraine 14 September 2016 —
DS532 — Ukraine 13 October 2017 —
DS566 — United States 27 August 2018 —
Source: compiled by the authors based on World Trade Organization (2018).
As a result of qualitative analysis, the following potential advantages of membership in the WTO in the aspect of access to a highly effective methodology of regulation of international economic conflicts are determined:
- Independence of arbitrage and making of objective decisions: this advantage is provided in practice, though it largely depends on experience of participation in disputes of complainant and defendant;
- Guarantee of execution of decisions: authority of arbitrage of the WTO and interest in further participation in this international organization contributes to the execution of decisions by conflict parties;
- Clear timeframes of consideration of disputes: there are strict regulations of arbitrage which are observed within the WTO; and
- Possibility of participation in conflicts as a third party: this allows gaining experience without
FIGURE 2 - Map of Russia's participation in international economic disputes within the WTO.
a claim for compensation. As of November 29, 2018, Russia is a third party in 52 disputes within the WTO.
At the same time, there are drawbacks of regulation of conflicts within the WTO: firstly, specific character of normative provision of initiation and the process of disputes of the WTO leads to high complexity of preparation and filing of documents. Secondly, expenditures for participation in disputes within the WTO are not compensated for any party. Thirdly, disputes within the WTO are narrowed down to observation of the principles of the WTO, which include free trading (refusal from applying the measures of protectionism). As a result, only the exporters' interests are protected; exporters receive the possibility of barrier-free entrance to the markets of the WTP members. The importers' interests are not protected, as the normative and legal provision of the WTO does not oblige importers to conduct international trade (even with the presence of the corresponding agreements), but only grants this right to them.
That's why a preventive practice that precedes the alternative methods of dispute resolution within the WTO should be international trade agreements, which set the rights and obligations of exporters and importers. This will allow defending the interests of importers in arbitrage of the WTO and creating an additional advantage from participation in the WTO - provision of the national economic security.
Thus, in the course of the research it was determined that the advantage of accession to the WTO - access to a highly-effective methodology of regulation of international economic disputes - is not obtained by modem Russia. Instead, elimination of customs barriers opened access to the Russian markets for foreign business structures, while the Russian business structures have low global competitiveness -which led to reduction of foreign trade balance and complicated the process of provision of Russia's national economic security.
The reason of this problem consists in complexity of disputes within the WTO - due to lack of experience, Russia initiates minimum of conflicts, and its more experienced trade partners use the arbitrage platform of the WTO for protection of their interests (damaging the Russian interests). The second reason consists in the fact that the WTO's principles protect exporters' interests, while importers' interests are not protected.
This problem could be solved by the offered preventive practice that precedes the alternative methods of conflict resolution, which consists in conclusion of international trade agreements by the WTO members, which allow setting clear rights and obligations and protecting the rights of exporters and importers. This will increase the effectiveness of the methodology of regulation of international economic conflicts within the WTO.
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Information about the author
MARTEMYANOV IGOR A. - Omsk State University named after F.M. Dostoevsky, Omsk, Russia
Информация об авторе
МАРТЕМЬЯНОВ ИГОРЬ АНАТОЛЬЕВИЧ - Омский государственный университет им. Ф. М. Достоевского, Омск, Россия
