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Friday, August 3, 2012

Permanent Normal Trade Relations (PNTR) Status for Russia and U.S.-Russian Economic Ties

William H. Cooper
Specialist in International Trade and Finance

U.S.-Russian trade is governed by Title IV of the Trade Act of 1974, which sets conditions Russia’s normal trade relations (NTR), or nondiscriminatory, status, including the “freedom-ofemigration” requirements of the Jackson-Vanik amendment (section 402). Changing Russia’s trade status to unconditional NTR or “permanent normal trade relations status (PNTR)” requires legislation to lift the restrictions of Title IV as they apply to Russia and authorize the President to grant Russia PNTR by proclamation. On July 18, 2012, the Senate Finance Committee marked-up and favorably reported S. 3406 to remove the application of Title IV to trade with Russia. S. 3406 also includes the text of S. 1039—the Sergei Magnitsky Rule of Law Accountability Act of 2012—which had been reported out by the Senate Foreign Relations Committee on June 26, 2012. On July 19, House Ways and Means Committee Chairman Dave Camp introduced H.R. 6156. It contains the same language as S. 3406 but does not include the Magnitsky Act provisions. On July 26, the Ways and Means Committee reported out favorably H.R. 6156 without amendments on a voice vote.

PNTR for Russia has become an issue for the 112th Congress because, on December 16, 2011, the members of the World Trade Organization (WTO) invited Russia to join the organization, after Russia completed an 18-year accession process. Russia will formally join the WTO on August 22, 2012. The WTO requires each member to accord newly acceding members “immediate and unconditional” most-favored-nation (MFN) status, or PNTR. In order to comply with WTO rules, the United States would have to extend PNTR to Russia, or invoke the non-application provision of the WTO.

Date of Report: July 26, 2012
Number of Pages: 9
Order Number: RS21123
Price: $19.95

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