Russia PNTR Bulletin.pdf
Permanent Normal Trade Relations and Jackson-Vanik
Jackson-Vanik provisions were included in Title IV of the Trade Act of 1974, and govern the extension of normal-trade-relations status (NTR) [also referred to as most-favored-nation (MFN)] to non-market economy countries. These provisions condition the extension of NTR treatment on countries compliance with freedom-of-emigration criteria, and require NTR status be renewed annually. Normal-trade-relations status is granted by Presidential certification, but is subject to a potential Congressional vote of disapproval. The United States generally graduates countries from the Jackson-Vanik provisions by granting permanent normal trade relations (PNTR) to countries when they accede to the WTO. Currently, the United States extends PNTR to all WTO members, with the exception of Cuba.
With the conclusion of the 1992 Agreement on Trade Relations Between the United States of America and the Union of Socialist Republics, Russia become eligible for the extension of NTR on an annual basis. Since 1994, Russia has been found to be in compliance with the freedom-of-emigration criteria established by Jackson-Vanik. While legislation has been proposed in recent years to accord permanent normal trade relations (PNTR) to Russia, such legislation has not been considered.
Permanent Normal Trade Relations
As Russia is acceding to the WTO on strong commercial terms, it is vital for Congress to consider PNTR for Russia before it becomes a WTO member. If PNTR is not approved by the time Russia formally joins the WTO, the United States and U.S. businesses will not receive the full benefits of Russia's membership. While Russia will have to provide U.S. exports the same tariff treatment it has committed to under the WTO (as a result of a prior agreement with the United States), Russia will not be required to provide many of the other core WTO commitments to the United States, including with respect to services, intellectual property, trade remedies, technical barriers to trade and sanitary and phytosanitary rules. Most significantly, perhaps, the United States would not have recourse to the WTO dispute settlement system to enforce any of Russia's WTO commitments. Therefore, the Administration and Congress need to work together to ensure a strong and high-standard accession package so that Congress will be able to approve PNTR for Russia before Russia's actual WTO entry.
Russia's negotiations to enter the World Trade Organization (WTO) appear to be reaching a conclusion, with the possibility that the WTO will approve Russia's membership as early as December 2011. As a result, Congress will be asked to extend Permanent Normal Trade Relations (PNTR) to Russia, thereby graduating Russia from the Jackson-Vanik provisions of the Trade Act of 1974, which authorize only annual normal trade relations as discussed below.
Russia's Accession to the WTO
Russia began negotiating the terms of its accession to the World Trade Organization (WTO) in the mid-1990s and now appears close to conclusion.
Negotiations for Russia's accession are being conducted in a WTO working party to complete a protocol package. This package includes consolidated results of all the bilateral market-access commitments for goods and services made in the course of bilateral negotiations with individual WTO members, and commitments on agricultural subsidies (export subsidies and domestic support). The package also contains a Working Party report that outlines Russia's commitments to bring its trade regime into compliance with all WTO rules. Once the package is completed, it will be sent from the Working Party to the WTO General Council for approval.
The WTO working party on Russia's accession announced in October 2011 that they will seek to have the final working party meeting in November 2011, at which time there is expected to be a vote to approve Russia's accession. After working party approval, the WTO General Council would need to vote to approve Russia's accession, which could come as early as December 2011. Once Russia's accession has been approved by the WTO General Council, Russia will need to implement its commitments and deposit its formal instrument of accession with the WTO. Thirty days after the deposit of the instrument of ratification, Russia will become a full WTO member.
U.S.-Russia Bilateral Agreement and
Subsequent Negotiations
The United States and Russia reached a bilateral agreement on Russia's accession on November 19, 2006. Under this agreement, Russia committed itself to substantial new market access for agricultural and manufactured goods and services, as well as other key issues. Key elements of the U.S.-Russia bilateral agreement include:
In separate agreements, the United States and Russia addressed several key issues, including:
Since 2000, the United States and other WTO members have worked with Russia to bring all aspects of its trade regime into compliance with WTO rules. In the coming days, efforts will be focused on completing those negotiations.
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Sources: Trade Stats Express , CIA World Factbook ,
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