Bloomberg News

U.S. Agrees to Russia Joining WTO, U.S. Trade Official Says

November 15, 2011

(Adds congressional concerns in seventh paragraph.)

Nov. 10 (Bloomberg) -- The U.S. is among countries agreeing to allow Russia to join the World Trade Organization after Russia resolved a disagreement with Georgia, a U.S. trade official said.

The agreement will probably be approved at a WTO conference in Geneva next month, according to the official, who spoke on condition of anonymity in advance of an official statement. Russia’s government would then need to approve the accord, the official said.

The U.S. Congress and President Barack Obama’s administration would still need to work out an agreement to eliminate the Jackson-Vanik Amendment, a 1974 law limiting trade with Russia, the official said.

Under the terms set today, Russia would gradually cut its average tariff ceiling for manufactured goods to 7.3 percent from 9.5 percent now, and duties on farm products will drop to 10.8 percent from 13.2 percent. On average, the final tariff cap on Russian goods would fall to 7.8 percent from 10 percent now.

Foreign beef, pork and poultry entering Russia’s market would face lower tariffs while higher duties would be applied to products exceeding quotas. The longest period for implementation is eight years for poultry, followed by seven years for cars, helicopters and civil aircraft.

“This agreement opens the door to Russia’s entry into the global rules-based trading system on commercially strong terms,” Myron Brilliant, the U.S. Chamber of Commerce’s senior vice president for International Affairs, said in a statement today.

Lawmakers’ Letter

U.S. lawmakers sent a letter yesterday to U.S. Trade Representative Ron Kirk seeking assurance Russia will respect U.S. intellectual property rights. The leaders of the judiciary committees of the House and Senate have “significant concerns,” according to the letter signed by Patrick Leahy, a Democratic Senator from Vermont, and Chuck Grassley, a Republican Senator from Iowa, as well as Lamar Smith, a Texas Republican, and John Conyers, a Michigan Democrat.

“The government of Russia must demonstrate via transparent, substantive and prompt actions its commitment to adhere fully to the obligations it will assume as a future member of the WTO,” the letter said. “Not only is the credibility of the rules-based system of international trade at stake, but should Russia fail to conform to its obligations in a thorough and timely manner, the adverse consequences for U.S. innovators and their workers will continue to be significant.”

Russian Approval

Russian lawmakers will probably approve membership in early 2012, following next month’s parliamentary elections, Maxim Medvedkov, the country’s chief WTO negotiator, said in Geneva.

“More than one-third of our GDP is made abroad,” Medvedkov said. “We are seventh in the world in terms of exports. We need a stable, predictable instrument to develop this trade.”

Russia exported more than $400 billion in goods last year, mainly to the European Union, Ukraine, Turkey, China and Belarus, according to the WTO. Imports were valued at almost $249 billion. Trade in services such as transportation and travel amounted to $114 billion.

--With assistance from Eric Martin in Washington. Editors: Joe Winski, Andrea Snyder

To contact the reporters on this story: William McQuillen in Washington at bmcquillen@bloomberg.net Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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