Russia economy had been downturn for two decades because of disordered reform and  increased corruption.  In 2007, Russia faced a budget deficit from 2% to 10% that led to the financial crisis. Thus the Russia economy grew slowly from 7% a year. In addition, Russia gas export revenue was under threat from the world gas surplus, which caused by the achievement of new technology. Immediately, Russian demand of oil, gas, and metals were rising rapidly. It caused more revenue gushing into a treasury. After that, Russian foreign exchange had been declining sharply in 2008. Investors had pulled out $211 billion of the country and it was also not easy to get a fix at this time on what Russia growth rate. Indeed, Foreign Direct Investment (FDI) was one of the biggest problems that the Russian government was concerned.  Russia’s foreign direct investment was drying up as the global credit squeeze reduced investors. It led the Russian’s real economy was shrinking very fast under the weight of all these. Many service industries and manufacturers shrank by almost 8%.  For these reasons the Russian government needs to change their economy. 

Will WTO entry help Russia economy?

 Russia became the 155^th member of World Trade Organization (WTO) on December 16, 2011. It means Russia has already brought many of its laws on international trade in line with WTO procedure such as anti-dumping law and countervailing duties, which were replaced by the WTO. WTO rules will move the Russia economy toward and raise the living standard that will lead to reduce poverty. As Russia became a WTO member, import tariff has been reduced on goods entering Russia from 10% to 7%. It will lead to lower prices for consumers because of uncompetitive Russian factories and farms. Furthermore, WTO non-discrimination rules will increase the level of Russian’s foreign direct investment that leads to increase jobs. Also, transport costs and foreign made goods will be stable.

In my view, although Russian became a member in WTO, Russian industries may suffer from WTO entry in the short term. The government should find out the way to protect the important industries such as agriculture, automobile industries, and agriculture equipment manufacturer. As a WTO member, Russia must negotiate about the lowering tariffs on goods and continuing to make a commitment towards greater liberalization in services and energy. Also, Russia has to open its attractive sector (a private financial) and fighting corruption because it will allow the foreign investors to invest in Russia. 

the ASEAN Free Trade Area (AFTA)

ASEAN established on 08 August, 1967 in Bangkok, Thailand. There are 10 members such as Brunei Darussalam, Cambodia, Indonesia, Lao, Philippines, Myanmar, Malaysia, Singapore, Thailand, and Vietnam.  Cambodia joined ASEAN on 30 April, 1999.

As today’s economy, does ASEAN Free Trade Area (AFTA council) boost Cambodia trade and foreign investment?

The purpose of the ASEAN Free Trade Area (AFTA) is to lower of intra-regional tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. ASEAN Members Countries determined to eliminate of non-tariff barriers include the process of verification and cross-notification, updating the working definition of non-tariff measures (NTMs) in ASEAN, and setting-up of a file on all NTMs maintained by member countries.

 According to the China- ASEAN Free Trade Area (FTA) has significantly promoted bilateral economic, trade and investment cooperation, China is the 4^th largest trading partner in ASEAN. Indeed, 90% of all goods trade between ASEAN and China countries has been sharply reduced to zero duties. It is a vital role in approaching forward the integration of regional economy of South East Asia.

For example, Cambodia-China trade increased $498 million in the first quarter of this year, approximately 216 percent rose from $157 million in the same period last year. Cambodia’s export to China has increased $42 million, up 342%. Cambodia exported to China such as agricultural products, rubbers, fish, timbers, and some garments and textiles. Cambodia imported from China reached $456 million, increased 208%. China exported to Cambodia such as garment raw materials, machinery, foodstuff, electronics, light products, medicines, and cosmetics.

Moreover, China’s direct investment reached $2.57 billion to ASEAN countries in 2010. Also, direct investment from ASEAN countries to China increased worth $6.32 billion, around 35.2% rose up. 

In my view, the ASEAN Free Trade Area (AFTA) will boost Cambodia trade and foreign investment.  Although the global economic crisis and increasing energy price, Cambodia economics will improve because of ASEAN-China Free Trade Area Agreement. It will tie between China and ASEAN countries, which leads to increase jobs, foreign investments, infrastructure, technology, tourism, inflation stabilities, and economics.

Do OECD global forums on agriculture help developing nations in trade?

Agriculture plays a vital role in domestic and international policies of many countries. In fact, developing countries have lower education, poor health care, and lack of technologies, but they have highly diverse in natural resources, populations, cultures and economic policies, which they can compete with developed nations on cheap labors. Also, their exporting focus on primary products such as agricultural goods, raw materials, fuels, and textile. These products are important to the world’s poor because they represent more than half of low income nations’ export.

 Although many of these governments have intervened in many different ways in domestic and international markets to support agriculture, the agriculture sector contributed to national incomes and employment in advanced countries. Moreover, these governments contributed to a reduction in economic efficiency, damage to the environment, distortion in production, and trade barriers. It can lead to financial cost that are borne by consumers and taxpayers. It’s a reason why OECD global forums on agriculture invited all the developed and developing economies to share experiences and explore how policies can more effectively achieve stated government objectives. Also, the purpose of the OECD is supporting and protecting mechanisms and regulations.

In my view, it is not sure that OECD global forums on agriculture can help the developing countries in trade, because subsidies of government in OECD countries (advanced nations) provide to the agricultural producers still remain high, approximately $227 billion (EUR 172 billion) in 2010. 

On the other hand, emerging economies such as China, Russia, and Brazil have much lower levels of support to agriculture. Not only these three countries, but also east Asian countries such as Indonesia, Malaysia, Philippines, Thailand, and South Korea. It’s difficult for them to trade because many people will spend their money on manufactured goods rather than spending on primary goods. For example, falling 70 percent price of agriculture commodities is sold by developing nations.   Therefore, it is not fair for developing nations to compete in trade which they should have comparative advantage.