August 22, 2012 1 Comment
Unfortunately the impact on shipping will be small. In 2001 China joined the WTO and by 2011 was the second largest economy in the world. The impact on shipping was phenomenal. China joined the WTO with a cheap and plentiful labour force and manufacturers were quick to close factories in Europe and US and move them to China, creating a need for vast export based shipping network. Russia joins the WTO with a completely different economic profile. Russia relies heavily on energy exports for foreign income, and these are not subject to WTO limitations anyway, so tariffs will remain the same. Besides, even if energy export tariffs were lowered or removed, the boost to exports by ship would be small, as most energy exports go via pipeline. Russia’s manufacturing base is not geared to exports (when was the last time you bought something “Made in Russia”), and labour costs are higher than other BRICS. The key growth under WTO membership will be imports. Under its membership agreement with the WTO, Russia will gradually lower tariffs on imported goods, such as cars. By 2019 the tariff on an imported car should be half of today. Lower prices of foreign goods will suck in imports, but the bulk will come overland by rail and truck. Finland has built a vast truck park at the border to come with the expected increase in traffic. Although Russia has large ports like St. Petersburg, it is has nothing like the potential Shanghai had in 2001. Overall, the impact on shipping is likely to be an increase in containers flowing into Russia. The main shipping beneficiaries are likely to the hub ports in Europe, such as Rotterdam and Hamburg, and the inland shipping waterway companies.
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