The Hagstrom Report

Agriculture News As It Happens

World Trade Organization accepts Russia as new member


GENEVA — Member countries of the World Trade Organization accepted Russia as the WTO’s latest member today, but the immediate impact on U.S. agricultural exports to Russia is uncertain.

Russia is a key market for U.S. poultry exports, but Russia has occasionally cited plant and animal health issues — known in trade circles and as sanitary and phytosanitary rules — to put restrictions on those imports. Under WTO rules, such rules can be used to deal with legitimate animal, plant and human health concerns, but not to restrict imports.

At a news conference here, WTO Director General Pascal Lamy called Russia’s admission “a double win” because it would provide benefits to Russia and its people and businesses while also bringing a major country into the WTO.

The WTO “needs Russia's energy as a newcomer to advance its work,” said Lamy, who has been coping with the unwillingness of member countries to finish the Doha round of multilateral trade negotiations that was launched in 2001.

Igor Shuvalov, the Russian negotiator, said at the news conference that membership in the WTO will be “very beneficial for the farmers in Russia,” and said the agriculture section of the accession agreement “is unique in the history of the WTO.”

Shuvalov did not expand on his statement on agriculture, but at other points in the news conference stressed that Russia hopes to increase its exports beyond raw materials such as oil and gas.

“Russia produces industrial goods and is potentially a huge producer of agricultural products,” Shuvalov said. He also noted that the agreement would be good for Russian consumers because it would bring them access to a wider range of goods.

David Salmonsen, director of congressional relations for the American Farm Bureau Federation, told The Hagstrom Report here that he did not know what Shuvalov meant by his statement that the accession agreement for agriculture would be “unique,” but said that if Russia follows the lengthy section on sanitary and phytosanitary rules, U.S. exports to Russia will be much more “regular.”

Russian officials noted that under WTO rules, their country has 220 days to pass domestic legislation to comply with the accession agreement. Shuvalov said he does not expect the proposed laws to go to the Duma, Russia's lower house, until May.

He also noted that for the accession agreement to take effect, the United States would have to repeal the Jackson-Vanik amendment, a Cold War-era piece of legislation that allows the United States not to extend to most-favored-nation status to Russia due to the Soviet Union’s unwillingness to allow Jews to emigrate.

The Obama administration filed a letter with the WTO on Thursday saying it could not offer so-called permanent normal trade relations with Russia, the New York Times reported. But the administration has called for the repeal of Jackson-Vanik, saying trade with Russia would have a positive effect on the country’s human rights record, the Times added.

U.S. Trade Representative Ron Kirk met here today with Russian Minister of Trade and Economic Development Elvira Nabiullina, USTR said in a news release.

During the meeting, Kirk congratulated Nabiullina on Russia’s “landmark achievement in concluding negotiations on the terms of its accession to the WTO,” USTR said. He also told her that President Barack Obama will work with Congress to enact legislation enabling the United States to fully benefit from Russia’s membership when Russia does accede to the WTO following its domestic ratification procedures, USTR said.

The National Foreign Trade Council, a Washington-based group, today called on Congress to repeal Jackson-Vanik despite some opposition in Congress.

Dan O’Flaherty of NFTC wrote in a blog post that Russia, the world’s ninth largest economy, has considerable market potential for American companies, but that Congress must first repeal Jackson-Vanik, which denies most-favored-nation (normal) trade relations to countries which deny their citizens the right to emigrate or impose a “more than normal" tax on emigration.”

The list of countries that fall under this restriction has dwindled to three: North Korea, Cuba and Russia, O’Flaherty noted.

Since 1992, the amendment has been waived annually by presidents of both parties, but the fact that it remains law in the case of Russia means that the United States cannot grant Russia permanent normal trade relations status. O'Flaherty noted that some members of Congress, including House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen, R-Fla., plan to oppose exempting Russia from Jackson-Vanik as a way of keep pressure on the Russian government to improve its human rights performance and cooperate on foreign policy issues such as Syria and Iran.

But O’Flaherty said that denying U.S. companies equal treatment in the Russian market with competitors from the European Union and Asia puts no pressure whatever on Russia but "merely punishes American companies."

The NFTC and USA*Engage, an affiliate group, “are making the argument to Congress that approval of Russian PNTR does not mean doing Russia a ‘favor’ or bestowing approval on the Russian government,” O’Flaherty said. “Instead, Russian PNTR should be an important component of President Obama’s National Export Initiative and make a contribution to economic recovery.”