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. Last Updated: 07/27/2016

Reports Says WTO Entry Will Hurt Regions

Local businesses in 22 regions are likely to take a beating if and when Russia joins the World Trade Organization, according to a report commissioned by the Economic Development and Trade Ministry.

Regions such as Moscow and St. Petersburg could be hardest hit because they rely heavily on imported goods, while other regions would be vulnerable due to their undeveloped or unprotected manufacturing enterprises, said the report, which is being considered by the ministry.

The 1,000-page report, prepared by economists from the Higher School of Economics, said the regions listed could hardly afford to compete with imported goods from WTO countries.

Maxim Medvedkov, chief negotiator for the country's WTO bid, said the report was commissioned to highlight the consequences of WTO membership, Kommersant reported Thursday.

Medvedkov could not be reached for further comment Thursday.

Tougher competition once Russia joined the WTO could hurt regional producers' business and lessen revenues into the federal budget, the report said. It noted, however, that there would be new opportunities for local producers to build export business.

Light industries, especially state- and city-owned firms, are expected to find it tough competing with imports, while domestic carmakers will suffer from a reduction in import duties, as would tractor production plants and distributors of car tires, coffee and tea, the report said.

Alexander Vodyanov, deputy director of the Institute of Macroeconomic Research, which reports to the Economic Development and Trade Ministry, said the report was a clarion call to the regions on WTO accession.

There would be a transitional period of about seven years to allow regions to put their economies in order, during which time import duties would be gradually reduced, Vodyanov said.