Kirill Zubkov
Moscow would not be allowed to access the World Trade Organisation (WTO), unless it reviews its decision on car-import duties
The Japanese Government officially called on Russia not to raise car-import duties. Tokyo believes that the protectionist measures of Vladimir Putin's Government do not match the principles of the WTO which Moscow wants to join. Analysts say the threat to deny Russia access to the WTO will not work. The Japanese automotive industry depends on exports to Russia's Far East just like Russia relies heavily on Japanese imports.
We believe that measures now being implemented by Russia are not conducive to building a free-trade system, the Japanese Foreign Ministry said in a statement. Tokyo believes that a decision not to implement such measures would be the best option for Putin's Government. The statement said the movement towards protectionism did not match the position of Russia which strove to join the WTO.
Akira Imamura, head of the information department at the Japanese Embassy in Moscow, told the paper that Tokyo had repeatedly asked the Russian Government not to raise car-import duties. In January 2008, we submitted the relevant document to the commission on foreign-trade protectionist measures, Imamura said.
Imamura stressed that the decision to raise car-import duties did not match the spirit of the WTO, and that it ran counter to specific commitments assumed by Russia during the November 2008 G-20 summit in Washington. At that time, Moscow and other summit participants pledged not to create additional trade barriers for a period of 12 months.
Imamura declined to comment on a possible Japanese response, if car-import duties are enforced and said this was still untimely. However, the Japanese side's repeated discussion of Russia's WTO accession implies that Tokyo might decide to block this process.
This threat cannot scare Moscow, Nikolai Petrov, a scholar in residence at the Carnegie Moscow Centre, told the paper. He said the Russian side had already warned that it could delay the WTO-accession process, unless it was expedited by the WTO itself. Nevertheless, Moscow will eventually have to reconsider its decision to charge restrictive import duties on Japanese motor vehicles.
Despite transportation benefits stipulated by the Russian Government, the national automotive industry will be unable to replace used Japanese cars in Russia's Far East, Petrov told the paper.
On the other hand, the Japanese automotive industry now facing the most serious crisis since its inception prioritises the export of used cars to Russia. Due to high used-car taxes, Japanese consumers find it more profitable to buy new vehicles. If introduced, the new car-import duties would wreck this system of used-car exports facilitating high domestic demand. Consequently, Japanese carmakers would be forced to downsize production still further. In November 2008, Nissan Motors said it would cut production by 34%. Toyota Motors and Honda downsized production by 27% and 10%, respectively.