Russia May Close Domestic Market to Imports

In an apparent swing toward economic protectionism, the Russian government is considering a proposal to restrict the import of a wide range of goods, the Novy Region news agency reports.  Nikolai Vinnichenko, the Presidential Envoy to the Urals Federal District, said in a video-conference that the move was necessary “so that competitor countries, where the situation is more complicated, don’t practice dumping and don’t beat our producers.”

As one way of stimulating the domestic market, Vinnichenko said authorities were looking into raising import tariffs.  The raised duties would serve as a barrier against goods produced abroad.  The Envoy added that the move would only apply to industries in the Russian economy that are competitive and can produce enough for the domestic market.

“If we we didn’t know how to make machinery with digital programmable controls, we still don’t, and we probably won’t in the near future, then there is no point is closing that market,” Vinnichenko said.  “But, say our engineering production is competitive, then we need to support it.”

Vinnichenko added that regions should not close off their own regional markets in hopes of saving a local manufacturer, the ITAR-TASS news agency reports.  “We wouldn’t want regions to use their power to artificially limit competition,” he said.  “However, we’re seeing the signals that a series of municipal districts in the [Urals Federal] District are closing their markets from their neighbors in an attempt to stabilize their internal situations.  We will correct this predicament.”

In January, Russia’s government raised duties on foreign car imports in an effort to prop up domestic auto-makers, spurring protests in Russia’s Far East.  The share of Russian-made autos in the market has fallen in recent years to around 40 percent.  Prime Minister Vladimir Putin, who ordered the tax hikes, earlier expressed his will that Russians drive Russian cars.

“Around 80 percent of cars sold in Russia must be manufactured in our country,” Putin said in May 2008.