Russia's Accession to the WTO (CRS Report for Congress)
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| Release Date |
Revised Jan. 27, 2009 |
| Report Number |
RL31979 |
| Report Type |
Report |
| Authors |
William H. Cooper, Specialist in International Trade and Finance |
| Source Agency |
Congressional Research Service |
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Summary:
In 1993, Russia formally applied for accession to the General Agreement on Tariffs and Trade (GATT). Its application was taken up by the World Trade Organization (WTO), the successor organization of the GATT, in 1995. Russia's application has entered into its most significant phase as Russia negotiates with WTO members on the conditions for accession.
Accession to the WTO had been critical to Russia and its political leadership. President, now Prime Minister, Vladimir Putin had made it a top priority. However, in the last year, Russian leaders have sent mixed signals regarding their commitment to the accession process. In August 2008, Prime Minister Putin stated that WTO accession may not be beneficial to Russia. Russia has also changed some of its trade rules, such as lowering quotas on meat imports and raising tariffs on auto imports, that contradict commitments that it made to the United States, the European Union and other WTO members as part of the accession process. However, in December 2008, Russian Foreign Minister Lavrov stated that Russia was committed to acceding to the WTO. Russia is looking to join the WTO by January 1, 2010, but previous such goals have not been fulfilled, and outstanding issues may delay the process again.
Differences over some critical issues remain, making the time for Russian accession to the WTO uncertain. The European Union and the United States have raised concerns about Russian energy pricing policies which allow natural gas, oil, and electricity to be sold domestically far below world prices providing, they argue, a subsidy to domestic producers of fertilizers, steel, and other energy-intensive goods. Russia counters that the subsidies are not illegal under the WTO. Perhaps more significantly, Russia's WTO accession had been put on a virtual hold as a result of the early August 2008 Russian-Georgian armed conflict over South Ossetia and Abkhazia and due to some trade measures that Russia has taken that would appear to be in conflict with commitments it has made as part of the accession process.
Congressional interest in Russia's accession to the WTO is multifaceted. Members of Congress are concerned that Russia enters the WTO under terms and conditions in line with U.S. economic interests, especially gaining access to Russian markets as well as safeguards to protect U.S. import-sensitive industries. Some Members also assert that Congress should have a formal role in approving the conditions under which Russia accedes to the WTO, a role it does not have at this time. A number of Members of Congress and members of the U.S. business community have advised the Bush Administration not to agree too quickly to Russia's accession to the WTO and to ensure that U.S. concerns are met. The Congress has a direct role in determining whether Russia receives permanent normal trade relations (NTR) status which has implications for Russia's membership in the WTO and U.S.-Russian trade relations. Without granting permanent NTR (PNTR) to Russia, the United States might not benefit from the concessions that Russia makes upon accession. Issues regarding Russia's accession to the WTO may arise during the 111th Congress. This report will be updated as events warrant.
