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Russia’s WTO Accession: Interregional Barriers to Agricultural Trade in the Russian Federation

Master’s Project Commercial Diplomacy Monterey Institute of International Studies, California (2002)

A general concern involving Russia’s WTO accession negotiations is that the decentralization of the federal government launched back in the early 1990’s has led to the regional fragmentation of the Russian agricultural policy, as the regions assume more policy-making responsibility, including over product flows. Many regions restrict agricultural inflows and outflows. The Russian regional authorities apply a wide range of the administrative barriers to the Russian agricultural market including, inter alia, the administrative physical restrictions on agricultural goods imported and/or exported from the regions, additional standards and certification requirements, uneven enforcement of customs regulations, various licenses and quotas, pricing, local taxes and fees, preferential treatment for the local economic entities. The rise of regional policy making raises concerns that regional authorities might not honor agreements made by the federal government. The issue of the interregional barriers is one of the most important problems in creation and development of the economic federalism in present-day Russia. The formation of the unified economic space raises an issue of its configuration, organization principles, and effectiveness. The interregional barriers being caused by specific features of the Russian regions’ stance such as different economic and political development, and economic separatism, impede the formation of the effective Russian market. They also reflect serious controversy between the federal and regional macroeconomic policies. The interregional trade barriers, being a new phenomenon of the Russian economic reality, has not yet been properly studied and systematized. As many other occurrences of a transition economy, they are differently treated and assessed by different federal and regional institutions. Not only is there an absence of assessment methodology of the economic consequences of such barriers, there is no even a common terminology. The international experience and the possibilities of applying the measures used abroad in this area have not been studied sufficiently in Russia. Multiple endeavors of the Federal government to rid of the interregional barriers turned out to be not very efficient. This is explained by the complexity of the problem itself, and also by the fact that it has been approached only administratively, without properly addressing the causalities of the interregional barriers. The efficient resolution of the issue of the interregional trade barriers requires the understanding of their essence and causalities.

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