When is russia joining wto

The agreement and the sideletters cover a broad range of issues. The bilateral agreement addresses some sensitive issues regarding Russian imports of U. Russia had banned imports of beef and beef by-products since a case of bovine spongiform encephalopathy BSE , or "mad cow disease," was discovered on a farm in Washington State in Under the bilateral agreement, Russia agreed to permit the immediate resumption of imports of de-boned beef, bone-in beef, and beef by-products from cattle younger than 30 months and to allow imports of beef and beef by-products from cattle of all ages after the United States receives a positive evaluation as a beef producer from the World Organization for Animal Health.

Under the agreement, Russia accepts U. Department of Agriculture's Food and Safety and Safety Inspection Service FSIS certifications of pork and poultry producing facilities for producing products that can be exported to Russia and procedures to expedite the certification process. Russia also agreed to accept U. Russia previously had only allowed frozen pork to be imported for further processing. The bilateral agreement also covers various Russian government tariff-related measures.

It commits Russia to continue to apply until the provisions of a U. The quotas established under the agreement were revised under a bilateral agreement reached on December 29, , that is to run through On the other hand, Russia did not agree to U.

It will also reduce tariffs on narrow-body aircraft. Russia has agreed to establish procedures to expedite imports of products of encryption technology and reduce duties on exports of scrap metal.

Regarding insurance, Russia acceded to U. After five years, Russia will consider whether to lift the discretionary restriction on foreign investment in banking and insurance.

Russia still will not allow foreign bank branches to operate. Russia also agreed to increase market access of foreign providers to other service areas including telecommunications, audio-visual services, energy services, express delivery services, distribution services, business services, and environmental services.

The bilateral agreement and sideletters commit Russia to strengthen enforcement of intellectual property rights, including the elimination of plants that produce optical disks, closing down websites that distribute pirated products, and strengthening enforcement at its borders to ensure that pirated goods are not imported. Russia also made a commitment to accede to the provisions of the WTO agreement on trade-related aspects of intellectual property rights TRIPs and to protect proprietary information provided by pharmaceutical companies to obtain marketing approval.

Russia still needs to complete negotiations with the working party and bilateral agreements with Saudi Arabia and Ukraine, two recently admitted members of the WTO. The working party members, including the United States, have argued that Russia still needs to resolve issues regarding government support of the agriculture sector and that its fulfillment of its commitments on IPR protection and industrial goods trade will be closely watched by them before finalizing the accession process.

The working party process has been placed on a formal hold, and the WP has been conducting only informal meetings. Georgia has prevented formal meetings because of Russian restrictions on Georgian exports and, more recently, over Russia's recognition of South Ossetia and Abkhazia. Furthermore, the Russian government said it is reconsidering unspecific commitments its has made as part of the accession process, and Prime Minister Putin has expressed doubts about the benefits of WTO accession to Russia.

Because the United States is the world's largest economy, its support is critical to the success of Russia's application. However, the United States has also insisted that Russia enter the WTO on "commercial terms," that is, on terms that do not distort trade, and that Russia immediately adhere to WTO agreements upon accession. And the trade and economic policy is itself part of a larger U. GSP program , and financial assistance to U. The Bush Administration has indicated that Russia's accession to the WTO could be jeopardized because of Russia's August military incursion into Georgia and its recognition the independence of South Ossetia and Abkhazia.

The large increase in U. Department of Commerce Data. Bureau of the Census. Despite the increase in bilateral trade, the United States and Russia still account for small shares of each others exports and imports. In , Russia accounted for about 0. The United States accounted for 2. Major U. The United States was technically the third largest source of foreign direct investment; however, the first two, Cyprus and Luxembourg, are considered to be largely sources of repatriated Russian capital rather than of original foreign capital.

These concerns are largely mirrored in the demands the United States has made on Russia during its negotiations in the WTO. For their part, Russian policymakers have asserted that U. For example, they point out that the United States only recently removed the "nonmarket economy status" that was applied in antidumping duty cases against Russian imports. That methodology leads to higher dumping margins and antidumping duties and, therefore, placed imports from Russia at a competitive disadvantage vis-a-vis other imports or U.

In response to requests from Russian steel producers, the U. Department of Commerce examined the possibility of no longer treating Russia as a nonmarket economy and removed the designation on June 7, More critical for Russia has been the U.

Section of Title IV requires the President to continue to deny NTR status to any country that was not receiving such treatment at the time of the law's enactment on January 3, In effect, this meant all communist countries, except Poland and Yugoslavia.

These restrictions can be removed if the President determines that the country is in full compliance with the freedom-of-emigration conditions set out under the Jackson-Vanik amendment.

For a country to retain that status, the President must reconfirm his determination of full compliance in a semiannual report by June 30 and December 31 to Congress.

His determination can be overturned by Congress via the enactment of a joint resolution of disapproval at the time of the December 31 report. The Jackson-Vanik amendment also permits the President to waive full compliance with the free emigration requirement, if he determines that such a waiver would promote the objectives of the amendment, that is, encourage freedom of emigration. This waiver authority is subject to an annual renewal by the President and to congressional disapproval via a joint resolution.

Before a country can receive NTR treatment under either the presidential determination of full compliance or the presidential waiver, both the United States and the country in question must have concluded and enacted a bilateral agreement that provides for, among other things, reciprocal extension of NTR or MFN status.

The agreement and a presidential proclamation extending NTR status cannot go into effect until a joint resolution approving the agreement is enacted. In , the United States and the Soviet Union signed a bilateral trade agreement.

The agreement was subsequently applied to each of the former Soviet states. The United States first granted NTR treatment to Russia under the presidential waiver authority beginning in June and, since September , under the full compliance provision. Presidential extensions of NTR status to Russia have met with virtually no congressional opposition. Russian political leaders have continually pressed the United States to "graduate" Russia from Jackson-Vanik coverage entirely.

They see the amendment as a Cold War relic that does not reflect Russia's new stature as a fledgling democracy and market economy. Moreover, Russian leaders argue that Russia has implemented freedom-of-emigration policies since the fall of the communist government, making the Jackson-Vanik conditions inappropriate and unnecessary.

While Russia remains subject to the Jackson-Vanik amendment, some of the other former Soviet republics have been granted permanent and unconditional NTR-Kyrgyzstan on June 29, , and Georgia on December 29, Perhaps, what has particularly irked Russian leaders is that the United States granted permanent and unconditional NTR status to China, ostensibly still a communist country, January 1, , and to Ukraine, March 23, The initiative would be a political symbol of Russia's treatment as a "normal" country in U.

For investors and other business people, PNTR may mean a more stable climate for doing business. But many observers have concluded that U. The answer to that question depends on when Russia and the more than sixty members of the working party can finish hammering out the conditions of accession. Negotiators have reportedly reached agreement on most issues, but disagreements on difficult issues of energy pricing, agriculture, services, civil aircraft, and intellectual property rights, have slowed down the process.

Russian leaders have stated a goal of completing the negotiations by the end of in order to become a WTO member by January 1, The stakes for Russia in joining the WTO are high. In the speech, Putin emphasized the need for the Russian government to establish the conditions to improve the economic well-being of the Russian people and linked that effort with joining the WTO:.

Tight competition is a norm in the international community and in the modern world, competition for markets, investments, economic and political influence. Russia must be strong and competitive in this fight.

The WTO is an instrument. He who knows how to use it grows stronger; he who prefers to sit behind a fence of protectionist quotas, and duties—he is doomed, absolutely doomed strategically.

Our country is still excluded from the process of making world trade rules. We are already in the world trade but we have no say in shaping the rules of trade. This tends to stunt the Russian economy and make it less competitive. In so doing, it agrees to make its foreign trade and investment regimes open to the scrutiny of the WTO and its members. As a WTO member, Russia will have a voice in how those rules are made and implemented. It would be a major step in integrating Russia within the international trade system.

The working party negotiations and the bilateral negotiations to date suggest that those countries are not satisfied and require that Russia make major adjustments in policies and regulations. The adjustments include reviewing and possibly changing more than Russian laws and reviewing more than 1, international agreements that Russia has with various countries. In general, Russia will likely have to reduce tariffs and other protective measures for import-sensitive industries such as autos and aircraft and will have to open up key financial service industries—banking and insurance—to foreign competition.

In the short run, such adjustments could lead to the loss of jobs in those areas and the need for the Russian government to provide unemployment insurance and other adjustment assistance. However, globally competitive industries, such as the raw material producers, could see markets abroad opening up and an increase in foreign investment as accession forces Russia to restructure its economy. In the long run, mainstream economic theory and the record of economies that have gone through similar transitions suggest that trade liberalization will lead to a more efficient Russian economy and to raising the living standard of the average Russian citizen.

The Russian business community is divided on the issue of accession. Some have expressed skepticism if not out right opposition to accession.

Among this group is Oleg Deripaska, an influential and powerful aluminum and auto business magnate. He is concerned that WTO accession will force Russia to eliminate protection and that the domestic auto industry will face competition from U. He is also concerned that Russia would have to charge higher prices for energy, a major input in aluminum production.

Similarly, representatives of aviation, furniture, financial services, telecommunications, and agriculture have asserted that Russia stands to lose more than it will gain from accession because Russia has not matured sufficiently to meet the competition. Views on accession cut across regions with support coming from regional political leaders in the major business centers of Moscow and St. Petersburg and in regions where raw material production is located.

Political leaders in regions where fledgling import-sensitive manufacturers are located have been skeptical or opposed to accession. For most Russians, accession has not attracted much interest. Putin and the current Russian political leadership have made economic growth and development their highest priority and they view Russia's admission into the WTO as an essential part of the strategy to fulfill those goals.

Putin appears to view the accession process as a way of forcing the government bureaucracy, the Duma, and Russian industry to confront the changes that are required if Russia is to attain long-term sustainable economic growth and development.

While Putin's political future probably does not depend directly on whether Russia gets into the WTO, it will likely be evaluated on the basis to what degree economic life in Russia has improved. WTO accession would be a further sign of Russia's acceptance and participation in the major multilateral economic institutions: the World Bank, the International Monetary Fund; and the G In so doing, Russia would distance itself further from its Soviet past.

For U. Accession could bring more stability and openness in the business climate since Russia would have to adhere to WTO rules that promote these conditions. The volume of U. Nevertheless, some U. These industries may press U. Such a provision was included in the conditions for China's accession to the WTO and was codified in U.

Similar to Section escape clause provision of the Trade Act of , Section allows the United States to temporarily restrict fairly traded imports that cause or threaten to cause injury to the domestic injury. Unlike Section , however, Section permits the restrictions to be applied solely to imports of like products from China, rather than requiring them to be applied on an MFN basis on imports of like products from all countries.

In addition, the required thresholds of cause and level of injury to the domestic industry for relief under Section is lower than under Section Section requires that imports be a "substantial" cause of "serious injury," whereas Section requires only that the imports be a "significant cause" of "material injury. Russia is the largest and most populous country that is not a member of the WTO.

If Russia accedes, it would significantly expand the geographical coverage of WTO rules to all major economies leading to a larger degree of stability and transparency to the international trading system. At the same time, Russia's entry into the WTO would continue a trend in which as the membership of the WTO becomes larger and more diverse, it becomes more difficult for that membership to reach a consensus on important issues.

In addition, trade disputes between Russia and its trading partners will be brought to the WTO for resolution rather than addressed bilaterally, adding to the ever growing caseload of the WTO. As an economy still in transition, Russia would bring its own perspective to WTO negotiations.

For example, Russia could be expected to challenge the positions the United States and other countries have taken in the WTO on the role of subsidies in trade and the degree to which trade in services should be liberalized.

It should be noted that other nonmarket economies had acceded to the GATT, albeit under special conditions: Poland ; Hungary ; and Romania The Soviet Union sought observer status once before in Naray, Peter. Russia and the World Trade Organization. New York. Calculations based on data found in Economist Intelligence Unit,. Country Data , GSP is a program under which a country gives preferential tariff treatment to imports from developing countries.

Many industrialized countries have GSP programs to encourage economic growth and development in developing countries. Some working party members wanted to be assured that Russian traders were not favored over foreigner traders in license approval process. The description of the agreement is taken from "What is the WTO? Office of the U. Special refers to a statutory requirement under Section of the Trade Act of , as amended, that the USTR annually identify those countries that are the egregious offenders of denying IPR protection and against which the United States could take action.

In practice, the USTR has also identified countries which do not fit the category of most egregious offenders but bare serious monitoring on its annual "priority watch list. Office of the United States Trade Representative. Informal Meetings of the Working Party. Statement s by the Head of the Delegation.

Convening fax. Elements of a Draft Report of the Working Party. Informal circulation. Legislation and implementing regulations. Click for details Hide details. Legislation notice. Notified legislation. The Law of the Russian Federation No. Decree of the President of the Russian Federation No. Resolution of the Government of the Russian Federation No. One reason the agreement was finally reached was because of a change of heart in the Russian leadership, according to Mr Tchakarov.

Russia will have to open up a little bit to foreign investment, because this is the only way for Russia to become a more competitive economy," he said. Ahead of the signing ceremony, Russian officials were talking up the benefit of the deal, which will still need to be ratified by the Russian parliament in the next six months.

The deal with Georgia that opened the way for Russia to join hinged on the international monitoring of trade along the mutual borders of Abkhazia and South Ossetia. The two provinces have broken away from Georgia and are recognised as independent states by Russia.

However, the agreement may still face a hurdle in the US, where existing legislation left over from the Cold War era blocks favourable trading relations with Russia. But Mr Tchakarov at Renaissance Capital said he believed Congress would agree to eliminate the laws, as past disputes with Russia over agriculture and intellectual property rights have now been fully resolved.