Wto entry to benefit russian economy

by Sudeep Reddy at 11/11/2011 (“Wall Street Journal”)

The World Trade Organization cleared the way to bring Russia into the fold, a move that would tie the nation into a global system of open markets and binding trade rules.

The latest step, approved by a key WTO negotiating panel, follows an 18-year effort to bring Russian trade practices in line with international policies governing 153 other nations. It is designed to open Russian markets to foreign competitors by cutting tariffs and breaking down trade barriers.

It also boosts the power of an organization increasingly called upon to mediate trade disputes around the world, including mounting tensions between the U.S. and China.

Russia will become the last member of the Group of 20 industrial and developing economies to join the WTO, the most significant entry since China joined a decade ago.

"It clearly marks a turning point," said Pascal Lamy, director-general of the Geneva-based organization, in an interview. "One way to reinforce the rules is to extend the perimeter of rules on this planet."

Russia, which has been trying to join the group since 1993, agreed to concessions on tariffs and other trade policies to win the approval. Officials are expected to rubber-stamp the deal next month at a WTO ministerial meeting.

"Russia's membership in the WTO will lower tariffs, improve international access to Russia's services markets, hold the Russian government accountable to a system of rules governing trade behavior, and provide the means to enforce those rules," he said, calling it a "significant day for U.S.-Russia relations."

"The biggest event from Russia joining will be to modestly increase the rule of law in Russia, which is pretty weak," said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington. "It's really up to the Russians whether they want to go in a more commercial, more market-oriented direction, or whether it continues to be this Wild East economy."

Article 2

How to be a truly global company

by C.K. Prahalad and Hrishi Bhattacharyya at 23/08/2011 (“Srategy+business”)

Many multinational business models are no longer relevant. Skillful companies can integrate three strategies — customization, competencies, and arbitrage — into a better form of organization.

Most companies are still organized as they were when the market was largely concentrated in the triad of the old industrialized world: the U.S., Europe, and Japan. These structures lead companies to continue building their global strategies around the trade-offs and limits of the past — trade-offs and limits that are no longer accurate or relevant.

One of the most prevalent and pernicious of these perceived trade-offs is the one between centrally driven operating models and local responsiveness. In most companies, an implicit assumption is at play: If you want to gain the full benefits of economies of scale — and to integrate common values, quality standards, and brand identity in your company around the world — then you must centralize your intellectual power and innovation capability at home. You must bring all your products and services into line everywhere, and accept that you can’t fully adapt to the diverse needs and demands of customers in every emerging market.