1. 1111 Trade Representative of the Russian Federation in Finland Dr. Valery A. Shlyamin Economic relations between Russia and Finland from the point of view of Russia`s WTO accession. Turku, 23.05.2012

2. 22 December 16 th, 2011 Geneva Ministerial Conference has approved the Working Group report concerning Russia's membership End of the longest ever negotiation period (18 years) Now the Russian Federation has 220 days to ratify the accession protocol

3. 3 GDP PPP (bln.$) in 2010 PlaceCountry GDP PPP (bln.$) 1. United States14526 2. China10119 3. Japan4323 4. India4058 5. Germany2944 6. Russia2231 7. United Kingdom2181 Source: International Monetary Fund

4. 44 Estimates of Russia’s WTO membership impact on the Finnish economy Conservative estimateOptimistic estimate Market capacity for Finnish goods and services +0,7%+1,1% Finnish GDP+0,1%+0,2% Finnish exports+0,5%+0,7% Employment in Finland+0,2%+0,3% Source: Bank of Finland, World Bank

5. 55 Russia’s WTO accession conditions IMPORT DUTIES Average- weighted import customs tariff (current level) WTO bindings, average-weighted level Entry levelFinal level All goods10.29%11.85%7.15% Agricultural goods15.63%15.18%11.28% Non-agricultural goods9.39%11.26%6.41% Source: Ministry of Economic Development of the Russian Federation

6. 66 Russia’s WTO accession conditions SERVICES 116 sectors with liabilities 39 sectors without liabilities The current legal base of maritime transport services guarantees the national treatment for foreign ships in Russia. Russian accession commitments in the transport services sector don't bring any significant changes in the short-term period.

7. 7 Russia’s WTO accession conditions Providing sea transport companies on the reasonable and non- discriminatory conditions with following services in sea ports: - Pilotage (for ships under the flag of the Russian Federation pilotage enjoyment can be optional); - Ice-breaker pilotage; - Towage; - Fuel, foodstuff and fresh water supply; - Garbage and sewage collection; - Harbor captain services; - Navigation support (lighthouse navigation services, radar stations services, other electronic support services etc.); - Services, delivered from the coast and essential for ship’s operation (incl. communicational services, water and electricity delivery etc.); - Emergency maintenance aids; - Berths and wharfs services.

8. 8 Russia’s WTO accession conditions 1.Russian legal entities will have the priority for participation as sea carriers within the bounds of production share agreements. 2. Russian legal entity can be the only form of commercial presence in the following sectors: Handling of goods; Storage warehouse, container stations and depots services; Customs brokers services; Forwarding companies services. 3. No commitments in the sector of inland water transport (right up to closing of sector from foreign business).

9. 9 Possible benefits and challenges of Russia’s WTO membership Benefits Freight traffic uncrease in the middle-term period; More efficient markets (due to higher competition); Possibilities for modernization of production facilities; Industrial cooperation development. Challenges Increase of competition environment for Russia due to market opening; Need for renovation of subsidizing mechanisms in shipbuilding sector.

10. 10 Declaration on partnership for modernization between the Russian Federation and the Republic of Finland (Saint-Petersburg, 14 th March 2011) business climate regional cooperation easing contacts (according to Russia- EU visa dialogue) energy efficiency and energy saving telecommunications timber industry (including wooden house-building) maritime sector others

11. 11 Possible benefits of Russia’s WTO membership Finnish partners (particularly shipbuilding sector) have good opportunities for participation WTO membership Possibilities for development of technology exchange and industrial cooperation One of the ways for Russian economy diversification and modernization We open our markets to create modern and competitive economy

12. 12 Industrial and scientific-industrial cooperation Shipbuilding Delivery of 50 main multifuel engines for 25 tankers to be built in Russia (Oka Shipyard and Krasnoye Sormovo – Wärtsilä) Delivery to Finland of propellers, spare blades and their maintenance (Ship-repairing Centre Zvyozdochka – ABB Marine, Steerprop) Creation of joint venture (Arctеch Helsinki Shipyard = AHS) by United Shipbuilding Corporation, Russia, and STX Finland Construction by AHS for Sovcomflot of 2 multifunctional icebreaking supply vessels (for the needs of Exxon Neftegas’s Sakhalin project) to be delivered in spring 2013; construction and delivery to AHS of hull sections for these vessels by Vyborg Shipbuilding Plant in 2011-2012. Construction by AHS for the Ministry of Transport of the Russian Federation of multipurpose emergency and rescue vessel to be used at the Baltic Sea. To be delivered in the end of 2013, construction of hull by Yantar Shipyard (Kaliningrad), started in April 2012; Construction of railroad and ship engines plant in Penza. Supposed start of manufacturing – in 2013 (Transmashholding and Wärtsilä). Projects, being worked over by United Shipbuilding Corporation and Wärtsilä: −Creation of joint venture for production of rudder propellers. −Creation of joint venture for integrated designing, deliveries and service of propulsive systems. −Creation of joint design office for civil vessels planning. Cooperation with STX Finland for planning and construction of multitype research vessel for Namibian fishery sector needs at Rauma shipyard. Perspective project: Construction of large freezer trawler for Russian customer at Arctеch Helsinki Shipyard

13. 13 Thank you for attention! Trade Representation of the Russian Federation in Finland www.rusfintrade.ru E-mail: vneshtorg.vesfin@rustrade.inet.fivneshtorg.vesfin@rustrade.inet.fi