By their lights, maybe. By Washington’s, not so clear. The U.S. Congress, with its penchant for instant results (by others), wrote into the Russia and Moldova Jackson-Vanik
Repeal and Sergei Magnitskiy Rule of Law Accountability Act of 2012 (P.L. 112-208) – catchy name – that the office of the U.S. Trade Representative (USTR) must report within 180 days about enforcement actions taken by the United States against Russia. The clock started after Russia was granted permanent normal trade relations (PNTR) and the report was duly issued last week. From here on, the report becomes an annual event.
So, what has stuck in Washington’s craw during the first six months? Take it with a grain of salt. It is in USTR’s interest to give the Congress the impression that it is being tough on the Russians, so the report is more likely to be a laundry list than a priority list.Sanitary and Phytosanitary Measures. Washington has raised questions in the World Trade Organization (WTO) about Russia’s implementation of such rules and harmonization of Russia’s own measures with international standards. USTR has put a priority on pushing Russia to recognize current international practice and fully reflect science-based risk assessments in its rules rather than simply establish a tough hurdle for imports to meet. There are concerns that Russia has not recognized U.S. production facilities newly certified for export to Russia.
Russia has a near zero tolerance for tetracycline residues, a standard more stringent than Codex’s maximum residue levels (MRL), but has failed to provide to WTO Members an adequate risk assessment. Russia also has adopted a zero tolerance for ractopamine, a standard more stringent than Codex’s MRL for pork and beef.
Motor Vehicle Recycling Fee. Russia established this fee late in 2012 supposedly to help launch a recycling industry. It appears to apply equally to both Russian vehicles and imported vehicles, but does not so in practice. You see, Russian vehicles can escape the fee if their manufacturers agree to accept their used vehicles for recycling – and foreign manufacturers don’t have this option. Many countries have talked to Moscow about this and it appears the recycling fee law will be modified.
Information Technology. Russia committed to join the WTO’s Information Technology Agreement, but when it submitted the paperwork in Geneva, several key tariff lines were omitted. Existing ITA signatories came down on them about this and it looks as if the missing products will shortly be added.
Intellectual Property Rights. Russia made great strides during the 18 years of negotiations that led to its WTO membership, but there is always something more. The United States has been asking questions about Russia’s laws on ownership and licensing of intellectual property, and has requested clarification of rules on copyrights, patents and more. Washington has raised specific issues concerning plant varieties and integrated circuits.
Transparency of Trade Rules. Russia has done a pretty good job here, considering that they began with an essentially opaque trade regime 18 years ago.
… since becoming a Member, Russia has provided to WTO Members a significant number of laws, decisions, regulations, resolutions, and other measures related to its foreign trade regime and its implementation of WTO rules. As a Member, Russia has made an effort to comply with these transparency obligations, notifying new measures as well as
amendments to existing measures, but a transparent, standardized system for providing notifications on issues such as TBT is not yet in place in Russia.
Nevertheless, there are always things that aren’t clear. The United States and others are using WTO meetings to ask questions about those – and the Russians have been generally responsive.
Technical Regulations Governing Alcoholic Beverages. Washington was worried that a ruling by Russia’s Federal Service for Alcohol Market Regulation would make it difficult for importers of alcoholic beverages to comply with Russia’s not-especially clear storage regulations. USTR approached Moscow and many of the changes they requested have been made.
Registration of alcoholic beverages is especially complex – at one point requiring registration with four different agencies. After talks between Washington and Moscow, this has been reduced to three. Talks continue.
Safeguard Investigations. Every WTO member has the right to impose sudden trade restrictions for safeguard purposes, though how they do it is subject to strict rules. Washington is concerned that Moscow may not have fully followed those WTO rules in a current case involving combine harvesters and modules.
Trade-Related Investment Measures. Russia has an incentive program that is in clear violation of the WTO’s Agreement on Trade-Related Investment Measures (TRIMs). Auto parts are allowed duty-free entry, but only if purchased by a manufacturer in Russia that commits to build in a certain percentage of Russian content in the completed vehicle. Russia committed to phase out this incentive by July 2018 and the United States and others are holding its feet to the fire. Washington is also raising questions about a leasing program for agricultural equipment that requires equipment manufactured in Russia.
Government Procurement. Russia committed in its WTO accession negotiations to request observer status and launch negotiations to sign the Government Procurement Agreement within four years of joining the WTO. Russia has already asked for observer status, so this looks on track at this point.
All-in-all, USTR has not presented a huge list of disputes and it appears that Russia is largely acting within its WTO requirements. There are always bones of contention between trading partners, and a learning curve for how to behave within the WTO, but the Russians appear to be doing a sound job of it thus far.