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Wednesday, January 16, 2013

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 some 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 112
th Congress, Members faced the issue of whether to extend permanent normal trade relations (PNTR) status to Russia and Moldova. On November 16, 2012, the House passed (365- 43), and on December 6, 2012, the Senate passed (92-4) H.R. 6156, which did just that, among other things. The legislation also included provisions—the Magnitsky Rule of Law Accountability Act of 2012—that impose sanctions on individuals linked to the incarceration and death of Russian lawyer Sergei Magnitsky. President Obama signed the legislation into law (P.L. 112-208) on December 14, 2012.

The 113
th Congress may face the issue of extending PNTR to at least two other countries. On December 10, 2012, WTO members invited Tajikistan to join, subject to that country’s ratification of its accession package. In addition, Kazakhstan may accede to the WTO in 2013. Both countries are currently subject to Title IV of the Trade Act of 1974.

Date of Report: January 4, 2013
Number of Pages: 8
Order Number: RS22398
Price: $19.95

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