Russia joins the WTO: there goes the neighbourhood

My affection for international organisations of any kind, never overwhelming under the best of circumstances, has just found new limits. Yesterday Russia was admitted into the World Trade Organisation.

Also admitted on the same day was that great trading nation of Vanuatu, about which I know, in broad strokes, nothing, other than that it’s somewhere in the Pacific. My knowledge of Russia is somewhat more extensive, and it seems to be more accurate than that of the WTO.

To the credit of this august organisation, it has rebuffed Russia’s attempts to join for the better part of 20 years, ever since the words ‘glasnost’ and ‘perestroika’ first entered Western lexicons. What, one wonders, has made the WTO change its mind? Or, to put it in a different way, how has Russia changed in the last 20 years?

One of the key desiderata to which the WTO is committed is transparency, meaning, presumably, that a member’s trading practices are aboveboard, there for all to see. Well, if the consensus is that Russia satisfies this requirement better now than she did 20 years ago, the consensus is simply wrong.

Transparency International, whose very name is consonant with WTO values, has a corruption index of 182 countries. Russia is currently in the 143th place, sandwiched between Nigeria and Timor, those well-known champions of economic probity.

Way above Russia on this list are such committed practitioners of fair, transparent trade as Rwanda (49), Namibia (57) and Cuba (61), which is a good reason for a sly chuckle. But then one looks at a few other lists, and the chuckle becomes a moan.

For Russia is the world’s ninth largest economy, and no country even remotely in the same neighbourhood is as far down on the Corruption Index. If that gives you food for thought, feast on this: of the nine countries known to possess nuclear weapons, only North Korea is below Russia at Number 182. Even Pakistan (134) is above Russia, to say nothing of the UK (16), the USA (24), France (25), Israel (36), China (75) and India (95).

Russia, in other words, isn’t someone you want as a neighbour or a guest in your house. She won’t just nick the odd silver spoon – she can get a removal truck in, empty the house and then blow it up. What then are the advantages of having her in the WTO?

This organisation is supposed to grease the wheels of international trade, making both exports and imports easier and less costly. In terms of exports, one can see how China, another utterly unpleasant place, can be helped by the WTO, whose member she has been since 2001. China’s economy, after all, is all about exporting goods made cheap by the country’s vast pool of slave or near-slave labour.

But Russia already has a €100-billion trading surplus, mostly thanks to her exports of commodities, such as hydrocarbons. Of her €200 billion worth of exports to Europe, €115 billion comes from oil and gas. The prices for those are set by world markets, and Russia’s membership in any organisation isn’t going to change matters one bit. Russia also exports weapons, competing with America in this area, and vodka.

What else is she going to export in any serious volume? Her cars, the automotive answer to Chernobyl? Her stylish clothes, based on GULAG fashions? Her medicines, best described as bottled euthanasia? The answer is, nothing – if you disregard, as most people do, the brisk business she’s doing in human tissue, aborted embryos and body parts, all used in various products, including cosmetics.

Another seldom mentioned Russia’s export is ill-gotten cash, laundered gleaming white through off-shore banks, electronically transferred, flown around the world in private jets, shipped aboard 500-foot yachts, carried in suitcases bursting at the seams. To answer your likely question, it’s ill-gotten because Russia doesn’t just have a mafia economy. It’s a mafia state, where government and criminal structures are so impeccably fused that they are one and the same.

Thinking that Russia’s WTO membership will turn her into what Daniel Sandford, the BBC’s Moscow correspondent, calls a ‘much more accessible – and predictable –  market for foreign companies’ is sorely misguided. The only predictable thing about doing business in Russia is that it can be done only according to the rules of organised crime, as set by the nation’s godfather Putin and his stooges.

Since the ironclad system of kickbacks, backhanders, protection money and bribes won’t change, I even doubt that foreign imports will become much cheaper for long-suffering Russian consumers. It’s like our petrol tax, which constitutes 64 percent of the price of unleaded. That given, and we know that the tax can only ever go up, reductions in the wholesale price of oil won’t result in much cheaper fuel at the pumps. The Russians will probably lower the official customs duties now, but it’s the unofficial contributions to the Putin mafia’s favourite charity that’ll take up the slack.

Back in 1983 President Reagan described Russia as an ‘evil empire’. She’s arguably less of an empire now, but she’s definitely no less evil. Welcoming her with open arms into trading organisations and partnerships will only serve the purpose of legitimising the world’s biggest criminal gang. 

So, to answer the question I asked earlier, Russia hasn’t changed much, nor is she likely change in the future. What has changed – for the worse, it has to be said – is the West’s understanding of the evil nature of Russia’s regime. And the West’s willingness to put up even a token resistance.

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