Is the Russian Economy a Market Economy?

   The purpose of the article is to assess whether Russia is a market economy according to the set of criteria.

   In the event that Russia loses the status of a country with a market economy, a statistical hypothesis was tested about a significant difference in the average values of national rates of US anti-dumping duties for market and non-market economies. The status of Russia is analyzed based on EBRD data for 2021–2022, the 2021 report of the WTO Secretariat on the trade policy of the Russian Federation. The claims expressed by the EU and the United States regarding government procurements and localization requirements at meetings of the WTO Committees on Trade in Goods and on Trade-Related Investment measures in 2020–2021 are considered. Anti-dumping duties were estimated based on the US notification of anti-dumping investigations for 10.01.2021–30.06.2021. Methods of mathematical statistics were used, as well as the IBM SPSS statistics system. According to the EBRD, Russia as a “sustainable market economy” is rated at an average of 5.9 points out of 10 possible. A lag in terms of integration was noted. The pricing policy does not cause complaints from the WTO members, however, the policy of government procurements, localization and import substitution of the Russian government does not meet the expectations of the WTO member countries. It was revealed that the exclusion of foreign manufacturers in the widely interpreted “government procurements” is the weakest element among those assessed. The specific obligations of the protocol on Russia’s accession to the WTO (paragraph 99 of the Report of the working group) “to make purchases, if they are not intended for state needs, guided by commercial considerations, without interfering with competition from enterprises of other WTO member countries for participation in such procurements” are violated. The impending loss of market status with the US could increase anti-dumping duties on Russian exports by 287 percentage points. The revealed upward trend in national rates of anti-dumping duties for countries with non-market economies allows us to conclude that the level of discrimination against countries with non-market economies is increasing. The hypothesis that the difference between the average values of the national rates of US anti-dumping duties for market and non-market economies is significant is confirmed.

1. Czechoslovakia: Transition to a Market Economy. The World Bank Country Studies. Washington. 1991.

2. Nedumpara J., Subramanian A. China’s Long March to Market Economy Status: An Analysis of China’s WTO Protocol of Accession and Member Practices // Nedumpara J., Zhou W. Non-market Economies in the Global Trading System the Special Case of China. Springer Nature Singapore Pte Ltd. 2018. 324 p.

3. Non-market Economies in the Global Trading System — The Special Case of China // Nedumpara J., Zhou W. Non-market Economies in the Global Trading System The Special Case of China. Springer Nature Singapore PteLtd. 2018. 324 p.

4. Polouektov A. “The non-market economy” issue in international trade in the context of WTO accessions. UNCTAD/DITC/TNCD/MISC.20. 9 October 2002 [Electronic source]. URL: https://unctad.org/system/files/official-document/ditctncdmisc20_en.pdf (accessed: 25. 01. 2022).

5. Puccio L. Granting Market Economy Status to China. An analysis of WTO law and of selected WTO members’ policy. Indepth analysis. European Parliamentary Research Service. November 2015 [Electronic resource]. URL: https://www.europarl.europa.eu/thinktank/en/document/EPRS_IDA(2015)571325 (accessed: 25. 01. 2022).

6. Russian Federation: Selected Issues. IMF Country Report. N 18/276. IMF, 2018.

7. Thorstensen V., Ramos D., Muller C., Bertolaccini F. WTO — market and non-market economies: the hybrid case of China. July 2013 [Electronic source]. URL: https://bibliotecadigital.fgv.br/dspace/bitstream/handle/10438/15865/LATAM%20-%20WTO%20and%20NMEs.pdf (accessed: 25. 01. 2022).

8. Transition Report 2020–21. European Bank for Reconstruction and Development [Electronic resource]. URL: https://www.ebrd.com/news/publications/transition-report/transition-report-202021.html (accessed: 25. 01. 2022).

9. U. S. — China. Trade Eliminating Nonmarket Economy Methodology Would Lower Antidumping Duties for Some Chinese Companies. GAO — United States Government Accountability Office. Report to Congressional Committees. January 2006 [Electronic source]. URL: https://www.gao.gov/products/gao-06-231 (accessed: 27. 01. 2022).

10. WTO analytical index GATT 1994 – Article I [Electronic source]. URL: https://www.wto.org/english/res_e/publications_e/ai17_e/gatt1994_art1_jur.pdf (accessed: 25. 01. 2022).