Shipping companies reap the benefits of Russia’s new WTO membership

Russia has finally ratified its membership of the global world trade organization WTO which takes effect in August. Several Danish shipping companies will likely benefit from this decision.

The entire shipping industry, not least companies such as Maersk, DFDS, and Unifeeder, are now in a good position to reap the benefits of the Russian Duma’s decision to finally ratify the country’s WTO membership, which takes effect this month.

This is the estimation made by Jacob K. Clasen, Head of Division with The Danish Shipowners’ Association, which generally welcomes the fact that an important trading partner to Denmark and the rest of the world will now eradicate the burdensome trade barriers and high tariff rates.

“The trade with Russia will become easier now that the country is lowering its tariff rates. Denmark and Danish shipping companies are in a good position to benefit from the increasing trade that is to be expected from this ratification. On a political level, we have established good relations in the Danish-Russian governing council, and the shipping industry is already well established with representatives such as Maersk, DFDS, and Unifeeder,” says Jacob K. Clasen to ShippingWatch.

High-level political meetings

Clasen compares the development with the positive effect which China’s admission to the WTO in 2001 had on the country’s trade with the rest of the world.

“The admission to WTO had a noticeable effect. It is not possible to say whether the effect will be the same in relation to Russia, but the trade with China really took off following the country’s admission to WTO. However, we will not see a change overnight. What we may see, however, are changes in trade during the coming years,” states Clasen.

In addition to the high tariff rates, it is also the burdensome customs procedures which have inconvenienced Danish companies and others. Therefore, Jacob K. Clasen hopes that Russia, as a part of the new membership, will also improve the customs procedures and work to make importation and exportation easier.

The Danish-Russian governing council rejoins once a year for a high-level political meeting.

Transparent regulation

The Danish government also nourishes great expectations for the Russian decision. Minister of Trade and Investment Pia Olsen Dyhr comments:

“I am happy that the Duma has now ratified Russia’s membership of WTO, which will take effect in August. The membership will lead to a better business climate in Russia. The trade barriers will be lowered. The tariff rate will be reduced and Russia will be obliged to follow transparent rules. Conflicts will be solved by employing WTO’s well-established procedures. To Russia, the WTO membership is an important step on the way to modernizing Russia’s economy and society. Calculations carried out by The World Bank show that the membership will increase growth in Russia. We should take advantage of the opportunities which the Russian WTO membership provides in terms of encouraging Danish-Russian trade and investments. They will contribute to get the growth going and to creating new jobs in Denmark.”

The political maritime cooperation with Russia is carried out by among others the transportation working group of the Danish-Russian governing council, of which Director General of The Danish Maritime Authority Andreas Nordseth is the chairman along with his fellow, the director for Department of State Policy on Maritime and River Transport, Konstantin Palnikov.

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