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SUMMARY
U.S.-Russian trade is governed by Title IV of the Trade Act of 1974, which conditions Russia's normal trade relations (NTR) status, including the "freedom-of-emigration" requirements of the Jackson-Vanik amendment. On December 16, 2011, the 153 members of the World Trade Organization (WTO) invited Russia to join the organization, after Russia completed an 18-year accession process. The WTO requires each member to accord newly acceding members "immediate and unconditional" most-favored-nation (MFN) status which is called NTR in U.S. law. Russia is expected to formally join the WTO sometime in the summer after its parliament as approved the accession package. In order to comply with the WTO rule, the United States would have to change Russia's status from conditional NTR to unconditional or permanent NTR (PNTR). The change in Russia's trade status will require legislation to lift the restrictions of Title IV of the Trade Act of 1974 as they apply to Russia and authorize the President to grant Russia PNTR. Therefore, Members of the 112th Congress confront the issue of whether to authorize PNTR for Russia.
Granting Russia permanent normal trade relations (PNTR) status requires a change in law because Russia is prohibited from receiving unconditional and permanent NTR under Title IV of the Trade Act of 1974. The change would likely occur in the form of legislation to eliminate the application of Title IV to trade with Russia. Title IV includes the so-called Jackson-Vanik amendment. Extension of PNTR has implications for Russia's accession to the World Trade Organization (WTO). The WTO requires its members to extend immediate and unconditional nondiscriminatory treatment to the goods and services of all other members. As a result, the United States invoked "non-application" of WTO rules to its trade relationship with Russia. This report examines this legislative issue in the context of Russian accession to the WTO and U.S.-Russian economic ties.
WHAT ARE NTR STATUS AND THE JACKSON-VANIK AMENDMENT?
"Normal trade relations" (NTR), or "most-favored-nation" (MFN), trade status is used to denote nondiscriminatory treatment of a trading partner compared to that of other countries.1 Only two countries-Cuba and North Korea-do not have NTR status in trade with the United States. In practice, duties on the imports from a country which has been granted NTR status are set...