U.S. Ag Exports Will Benefit from Russia's WTO Membership

A lot of potential in Russian market for animal genetics, food processing and ag machinery.

Published on: Mar 22, 2012

The World Trade Organization approved Russia's full entrance late last year. Russia is expected to complete full ascension into the WTO later this year. With Russia's full participation, Trade Analyst Eric Trachtenberg says duties for all products went from 10% to 7.8%, and for ag exports they were cut from 13% to 10%. Trachtenberg says many U.S. export products will benefit.

"For pork by the year 2020 there will be a tariff only regime with import duties bound at 25%," Trachtenberg said. "Apple tariffs will go down, pear tariffs will go down, tree nuts, cheese, soybeans, breakfast cereals, wine. These are meaningful benefits for people looking to seek overseas markets for U.S. products."

Many agricultural products will benefit from Russia joining WTO.
Many agricultural products will benefit from Russia joining WTO.

Trachtenberg says the WTO will impose disciplines on Russia's sanitary measures, which should increase U.S. pork and poultry export opportunities in Russia along with opening new tariff-rate quotas.

"There will be a global TRQ for fresh, chilled and frozen pork," Trachtenberg said. "There will be a special high quality beef tariff, which will no longer be subject to quota. There will be a TRQ of 250,000 tons for chicken."

Russia has become a major market for animal genetics, Trachtenberg says, noting U.S. live animal exports were $58 million last year. Russia also is the fourth-largest market for U.S. ag machinery, and Trachtenberg says there's still opportunity left in terms of food processing investment. He says there's much to look forward to in the future of Russia's market.

"It is still a large country and there's economic growth, especially in the larger cities," Trachtenberg said. "There's rising disposable income, increasing real wages, and still falling unemployment and there is a dynamic and growing retail sector. There is strong product demand, some of it will come from direct sell to customers, some of it will come from increasing inputs to food processing."

Trachtenberg says Russia also will be a major beef, poultry, genetics, fish, tree nut and food importer.