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Wednesday, August 1, 2012

The Jackson-Vanik Amendment and Candidate Countries for WTO Accession: Issues for Congress

William H. Cooper
Specialist in International Trade and Finance

Unconditional most-favored-nation (MFN) status, or in U.S. statutory parlance, normal trade relations (NTR) status, is a fundamental principle of the World Trade Organization (WTO). Under this principle, WTO members are required unconditionally to treat imports of goods and services from any WTO member no less favorably than they treat the imports of like goods and services from any other WTO member country. Under Title IV of the Trade Act of 1974, as amended, most communist or nonmarket-economy countries were denied MFN status unless they fulfilled freedom-of-emigration conditions as contained in Section 402, the so-called Jackson-Vanik amendment, or were granted a presidential waiver of the conditions, subject to congressional disapproval. The statute still applies to many of these countries, even though most have replaced their communist governments. The majority of these countries have joined the WTO or are candidates for accession. Several countries are close to completing the accession process, and Congress could soon face the issue of what to do about their NTR status to ensure that the United States benefits from those accession agreements.

During the 112th Congress, Members face the issue of whether to extend PNTR to Russia. On July 18, 2012, the Senate Finance Committee reported out S. 3406 that would authorize PNTR for Russia and also for Moldova (which is already a member of the WTO). On July 19, House Ways and Means Committee Chairman Dave Camp introduced H.R. 6156 for the same purpose.

Date of Report: July 20, 2012
Number of Pages: 8
Order Number: RS22398
Price: $19.95

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