US Mulls MFN Status to Russia

US-Russia trade ties are entering back into the spotlight, with Washington lawmakers set to begin debating the repeal of Cold War-era trade restrictions that would allow Moscow to become a full trade partner.

The visit of Max Baucus - the chairman of the Senate Finance Committee, which has jurisdiction over tax and trade policy - to Russia last week was expected to kick off the debate in Washington, with the senator meeting with Russian President Dmitry Medvedev to discuss the trade situation and other subjects.

Establishing Russia as a full trade partner will require the US Congress to repeal of the Jackson-Vanik amendment, a legislative provision left behind from the Cold War that allows the US to deny most favoured nation (MFN) status to nations that restrict freedom of emigration.

However, some US lawmakers have questioned repealing the law, citing concerns regarding Russia’s human rights and economic record.

Russia was denied MFN status due to the Jackson-Vanik provision but has received presidential waivers annually since 2005. The US and Russia have a bilateral trade agreement dating back to early 1990s that provides provisional MFN status.

However, this provisional agreement “doesn’t cover a wide range of areas that are covered by the WTO accession agreement,” Edward Verona, President and CEO of the US-Russia Business Council - a Washington-based trade association - told Bridges.

These areas include intellectual property rights, sanitary-phytosanitary (SPS) standards, and financial services, among others, Verona added.

In December 2011, Russia was granted admission to the WTO after an 18-year accession process. The accession package must now be approved by the Russian parliament in order for Russia to become a full member; the accord is expected to be ratified by summer.