Russia is now a member of the World Trade Organization, or WTO. This step brings Russia’s $1.8 trillion economy under the rules of the global trading system and will provide new opportunities to increase trade between Russia and the United States.
Russia began its accession process in June 1993, and WTO members approved the terms for Russia’s membership on December 16, 2011. Russia became a WTO member on August 22 after ratifying the terms for its WTO membership.
During the negotiations over its membership, the United States and other WTO members called on Russia to dismantle trade barriers and other measures that were inconsistent with WTO rules and to enact laws and regulations necessary to comply with WTO rules. After Russia implements its tariff commitments, its import tariffs on industrial goods will average about 7.3 percent, which should make imported products cheaper for Russian consumers.
As a member of the WTO, Russia is expected to establish predictable tariff rates, ensure transparency in its trade legislation and be part of the organization’s trade dispute settlement process.
At the same time, the United States is working on terminating application of the 1974 Jackson-Vanik amendment extending permanent normal trade relations, or PNTR, to Russia, so that the United States can apply the WTO agreement to Russia. Russia has been found in compliance with the Jackson-Vanik amendment’s freedom of emigration provisions every year since 1994. Thus the provision has served its purpose and now has little practical effect on Russia.
In a recent article, U.S. Secretary of State Hillary Clinton said the termination of the application of Jackson-Vanik and PNTR to Russia would be “an investment in the more open and prosperous Russia we want to see develop.”
The middle class in Russia has been calling for “a more transparent and accountable government, a more modern political system and a diversified economy.” The United States, said Secretary Clinton, wants to support these aspirations.
Trade between the United States and Russia has been increasing in recent years, but isn’t reaching anything close to its full potential. U.S. exports to Russia amount to less than 1 percent of its global exports.
Extending permanent normal trade relations and increasing trade levels will create new economic opportunities for American businesses. Such changes will ultimately make Russia a more just and open society as well as a better partner for the U.S. over the long term.