William H. Cooper
Specialist in International Trade and Finance
In 1993, Russia formally applied for accession to the General Agreement on Tariffs and Trade (GATT). In 1995, its application was taken up by the World Trade Organization (WTO), the successor organization of the GATT. Russia is the largest economy not in the WTO; after a number of fits and starts during the 18-year process, the then-153 members of the WTO, on December 16, 2011, invited Russia to join the WTO during the Ministerial Conference in Geneva. On July 10 and July 18, 2012, respectively, the lower house of the Russian parliament—the State Duma—and the upper house—the Federal Council—approved the protocol of accession. President Putin signed the measure into law on July 21, allowing Russia to formally join the WTO on August 22.
The immediate policy issue for Congress was whether to enact legislation authorizing the President to grant permanent normal trade relations (PNTR) status for Russia, a status that all WTO members are required to provide each other. Some Members of Congress viewed congressional consideration of PNTR legislation as the opportunity to ensure that the conditions on which Russia is invited to join the WTO reflected U.S. concerns and that Russia fulfill its commitments.
On November 16, and on December 6, 2012, respectively, the House passed (365-43) and the Senate passed (92-4) H.R. 6156. The President signed the bill into law (P.L. 112-208) on December 14, 2012. The law removes the application of Title IV to trade with Russia and authorizes the President to grant PNTR to Russia by proclamation. It also contained other provisions requiring follow-up reports and discussion to ensure that Russia complies with its obligations to the United States and other WTO members.
In joining the WTO, Russia has committed to bring its trade laws and practices into compliance with WTO rules and other market-opening measures. In doing so, it will take a major step in integrating its trading system with the rest of the world. Those commitments include
- extending nondiscriminatory treatment of imports of goods and services;
- reducing tariffs and binding tariff levels;
- ensuring transparency when implementing trade measures;
- limiting agriculture subsidies;
- enforcing intellectual property rights (IPR) of foreign holders of such rights;
- forgoing the use of local content requirements and other investment measures that limit imports; and
- opening government procurement contract opportunities to foreign firms.
In joining the WTO, Russia commits to accepting WTO dispute settlement procedures.
In return, Russia will have a voice in shaping and implementing the international trade regime. It will be able to hold its WTO partners accountable for adhering to WTO rules in conducting their trade relations with Russia, making those trade relations more predictable and stable. In addition, Russian economic reformers anticipate that WTO membership will make Russia a more attractive location for foreign producers and investors to do business by locking in trade-liberalizing reforms, which could increase Russia’s economic growth.
Date of Report: January 4, 2013
Number of Pages: 22
Order Number: R42085
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