Telecommunications Reform within Russia's Accession to the World Trade Organization

40 Pages Posted: 26 Jan 2005

See all articles by Jesper Jensen

Jesper Jensen

TECA Training ApS

Thomas F. Rutherford

Centre for Energy Policy and Economics

David G. Tarr

International School of Economics at Tbilisi State University

Date Written: February 2005

Abstract

In World Trade Organization (WTO) accession negotiations, telecommunications is always a sector that receives close scrutiny by the WTO Working Party, and the extent of market access and nondiscriminatory treatment of multinational telecommunications companies in Russia has been a significant issue in Russia's accession negotiations. Jensen, Rutherford, and Tarr use a computable general equilibrium model of the Russian economy to assess the role of telecommunications in the discussions regarding Russian accession to the WTO. The results show that reduction of barriers to foreign direct investment in telecommunications will bring substantial gains to the Russian economy, including an increase in the productivity of Russian labor and capital. Despite the fact that multinationals use Russian labor less intensively than Russian firms, demand for Russian labor employed in telecommunications should increase, following reductions in barriers to foreign direct investment that are included in the context of WTO accession. This is because the overall demand for telecommunication services should increase due to the growth effects of the liberalization of barriers against foreign direct investment generally and the reduction in tariffs. Russian capital owners in telecommunications will likely be sought as joint venture partners and can restructure and obtain gains as partners with foreign firms. Wholly owned Russian firms are likely to experience losses.

This paper - a product of the Trade Team, Development Research Group - is part of a larger effort in the group to assess the consequences of liberalization of barriers against foreign direct investment in services.

Suggested Citation

Jensen, Jesper and Rutherford, Thomas F. and Tarr, David G., Telecommunications Reform within Russia's Accession to the World Trade Organization (February 2005). Available at SSRN: https://ssrn.com/abstract=654567

Jesper Jensen (Contact Author)

TECA Training ApS ( email )

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HOME PAGE: http://www.tecatraining.dk

Thomas F. Rutherford

Centre for Energy Policy and Economics ( email )

ETH-Zentrum
Zurich, CH-8092
United States
+41 (0)44/632 6359 (Phone)
+41 (0)44/632 1622 (Fax)

HOME PAGE: http://www.cepe.ethz.ch/

David G. Tarr

International School of Economics at Tbilisi State University ( email )

16 Zandukeli Street
Tbilisi, 0108
Georgia

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