Companies Worry about Russia’s WTO Entrance (NY Times)

U.S.-Russia relations pose a barrier to the lower tariffs normally offered to World Trade Organization members.

The World Trade Organization granted Russia the membership it has long desired Wednesday, providing greater opportunities to foreign businesses. But Russia’s W.T.O. membership may serve to disadvantage U.S. companies, because Congress refuses to grant Russia permanent normal trade relation status. In order to benefit from lower trade barriers, a country must apply the same trade rules to all W.T.O. member countries.

Russia negotiated for W.T.O. membership for almost two decades, longer than any other major entrant to the trade organization. It will decrease its import tariffs from 15% to 7%. While Russia has not indicated that it plans to introduce discriminatory tariffs on the United States, it legally could.

U.S. legislators have dragged their feet on the issue of approving permanent normal trade relations because of Russia’s history of corruption, conflicting foreign policy and its human rights record. Only 0.5% of American exports go to Russia, but its dependence on mining and energy makes it a top export destination for companies like Caterpillar.

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