Russia Backs WTO Entry; U.S. Friction Persists

July 19, 2012

Russia’s upper house of parliament voted on Wednesday to ratify entry into the World Trade Organization, and now only the signature of President Vladimir Putin is needed to complete the country’s 18-year bid to join the trade rules club.

Russia will finally become the WTO’s 156th member 30 days after it informs the trade body that Putin has signed off on December’s deal, under which Moscow would cut import tariffs and open up sectors of its economy to foreign investment.

Friction with the United States persists, however, as the U.S. Congress has yet to repeal a Cold War-era measure – the Jackson-Vanik amendment – which links trade policy towards Moscow with human rights.

If the measure is not repealed, Russia would be in a position to deny U.S. exporters the market-opening concessions it made to join the global trade group.

The Federation Council upper house vote, carried easily with 144 in favor in the 166-strong chamber, was a formality after the State Duma lower house backed WTO entry last week by a 30-seat majority.

The Russian government has said that it will start cutting tariffs from Sept. 1 after agreeing to gradually lower import duties from an average of 9.5 percent now to 6 percent by 2015.

Washington could, however, miss out on those trade benefits if Congress does not vote to repeal the Jackson-Vanik amendment, which links awarding so-called permanent normal trade relations (PNTR) to emigration rights for Soviet Jews.

Jackson-Vanik, implemented in 1974, does not conform to WTO rules. Regarded by Moscow as an anachronism, the provision has long been a bone of contention in bilateral relations.

U.S. lawmakers are also debating legislation named after Sergei Magnitsky, an anti-corruption lawyer who died in Russian custody in 2009, that would instead impose visa bans and freeze assets on Russian officials deemed to be corrupt.

“Really, the last thing we want is for the anti-Soviet Jackson-Vanik amendment to be replaced with anti-Russian legislation,” Deputy Foreign Minister Sergei Ryabkov was quoted by Interfax news agency as saying after Wednesday’s vote.

President Barack Obama’s administration backs repealing Jackson-Vanik, and Senate Finance Committee Chairman Max Baucus, a Democrat, plans to push forward a PNTR bill this month, but would attach the Magnitsky bill to the measure.

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