Emerging Markets Institute Hosts Lead Negotiator in Russia’s Accession to the WTO
Shishayev Shares Insights and Business Implications for Global Competition
Understanding key drivers of economic transformation in an interdependent, global economy has never been more important for business school students. Brought together by an appreciation for these forces and business opportunities born from an ever-changing global economy, students filled Ramin Parlor in the Samuel Curtis Johnson Graduate School of Management to attend a seminar by Aleksey Shishayev, senior counselor and head of the economic section of The Embassy of the Russian Federation in the United States.
Hosted by Johnson’s Emerging Markets Institute, Shishayev discussed the implications of Russia’s accession to the World Trade Organization (WTO), which was announced formally on Nov. 3, 2011, and should be complete by summer. Shishayev noted the historic achievement that Russia’s accession represents, especially during challenging economic times. His seminar not only provided an overview of the Russian economic landscape, but he also presented an amalgamation of history, politics, and innovations that impact business – and Russia’s accession to the WTO.
Although Russia set a world record for the longest negotiation for WTO accession, Shishayev expressed excitement and optimism for Russia to join the ranks of 153 other WTO member countries and be fully acknowledged as a world trade partner.
“It took us 18 years of negotiations to join the WTO,” he said. “It feels great to be joining. We hope it will bring real economic value.”
As a lead negotiator for Russia’s accession, Shishayev offered insights that only someone who had been at the negotiating table could share.
“I thought his examples allowed us to feel the depth and efforts that went into 18 years of negotiations,” said Elena Iankova, senior lecturer of management. “Because he’s a diplomat, he also incorporated the political side of the negotiations, not just trade and business analytics you’d find in a regular briefing.”
Russia, like many other countries, depends on the world economy and has become increasingly interconnected. Putting a checkered past behind, Russia and the U.S. recently have sought to deepen their economic ties. Shishayev shared several success stories of U.S.-based companies that have established facilities in Russia. Among the organizations highlighted, Shishayev noted that Procter & Gamble launched operations in Russia in 1991 and has grown P&G Russia to become one of the fastest developing subsidiaries of the global consumer packaged goods company.
Russia’s accession to the WTO will create new markets for American exporters in one of the world’s fastest growing markets, Shishayev said, possibly doubling U.S. exports to Russia to some $19 billion annually, However, trade barriers remain between the two former superpowers, specifically the 1974 Jackson-Vanik amendment. Originally established to ban trade with non-market economies that restrict freedom of emigration and other human rights, Jackson-Vanik impedes normal trading relations between the U.S. and Russia,
“It could take another 18 years – or just 18 months – for progress to be made and Congress [to] repeal Jackson-Vanik,” said Shishayev. “I hope it doesn’t take that long. The White House is supportive because they understand the economic implications.”
Encouraging Johnson’s future business leaders to consider potential opportunities in Russia, Shishayev noted some of the country’s recent noteworthy developments. Among them: declining unemployment, increasing modernization, and a growing common market with its neighboring countries through which goods and services would move without barriers.
“We want people and businesses to invest in Russia,” Shishayev said. “But having a local partner, like with any international deal, is important to help with negotiations.”
Questions about Russian interest rates, opportunities for setting up foreign banks, and Russia’s views of China were just some of the many questions posed by students throughout the seminar.
“Coming from the agricultural sector, I’m interested in learning about potential opportunities in emerging markets,” said John Tauzel, MBA '12. “Many U.S. farmers have diversified their farms by setting up in other global locations to mitigate risk. Maybe with Russia’s accession to the WTO, there will be opportunities to do something similar in Russia.”