Russia Joins the WTO. Now What?

Commentary | August 23, 2012

When the United States and Russia signed the New START treaty, a foreign policy priority for the Obama administration, the accomplishment was widely celebrated in both Washington and Moscow. On August 22, the United States and Russia recently achieved another joint foreign policy goal, one that was even harder to get to than New START, when Russia formally joined the Word Trade Organization. But this milestone, 19 years in the making, was strangely anticlimactic. In so many other ways, the U.S.-Russia relationship appears to be fraying. The result: no one was particularly excited by Russia’s WTO accession and the real focus continues to be on a broad range of issues that are significant sources of tension.

Some of these tensions are directly related to Russia’s WTO membership application. Now that Russia has joined the WTO, the United States finds itself in violation of WTO rules that require an unconditioned trade relationship. Back in 1974, Congress passed the Jackson-Vanik amendment that tied free trade to free emigration in non-market economies as a means of pressuring the Kremlin to allow Soviet Jews to emigrate. Russian officials have pointed out for years that this is an anarchic piece of legislation since Russia is neither a non-market economy nor does it restrict emigration. Yet despite the efforts of successive U.S. presidential administrations to graduate Russia from the Jackson-Vanik amendment, Congress has thus far refused to act. In part, this is because many members of Congress continued to view Russia through a Cold War prism.

Now that Russia has joined the WTO, such attitudes are changing—up to a point. Both the House and the Senate are considering bills that would graduate Russia from Jackson-Vanik and grant permanent normal trade relations (PNTR). There is a possibility—although far from assured—that Congress could act when it returns from the August recess. The price, however, will be tying PNTR to passage of the Magnitsky bill, which focuses on human rights abuses by government officials in Russia. These human rights objections are not as easily dismissed as those rooted in outdated Cold War thinking.

The Obama administration has sought to delink Magnitsky and human rights issues from PNTR, but Russia’s recent increasingly heavy-handed treatment of political dissenters has undercut those efforts. Congressional and other critics of its human rights record point to the recent trial and two-year jail sentence for the punk band Pussy Riot, opposition leader Garry Kasparov’s arrest, the relentless pursuit of opposition leader Alexei Navalny, the efforts to undermine non-governmental organizations that receive foreign funding by subjecting them to frequent audits and labeling them as “foreign agents,” and increased penalties for protestors.

Those same critics argue that the Obama administration has turned its head as the Russian government moves backwards on human rights with such actions. Such criticism is not entirely fair. The administration has imposed visa bans on officials linked to the Magnitsky case (the Magnitsky bill seeks to do something similar, but on a broader scale) and has used official channels to quietly press the Kremlin on human rights. The problem, however, is that the Obama administration has not been able to engage the Putin administration on these issues. The Russian government rejects all such criticisms of its human rights practices, calling them an intolerable meddling in its domestic affairs.

So the bilateral relationship is dealing with—or, perhaps more accurately, not dealing with—several significant stressors. And the U.S. presidential contest is certain to shine an uncomfortable spotlight on the strained relationship as the Romney team seeks to undermine any foreign policy successes that the Obama administration claims, such as New START and Russia’s WTO accession. Mitt Romney already launched one broadside against Russia, calling it the “greatest geopolitical foe.” While the Republican candidate has quietly dropped such inflated rhetoric, he is unlikely to soften his overall tone. And given Putin’s tough measures against dissenters and his policy on Syria that is widely seen as obstructionist, even Obama is likely to feel compelled to distance himself from Russia’s actions at home and abroad. For now, the once-touted notion of a “strategic partnership” between Russia and the United States is, at the very least, on hold. It would take some major course corrections to give it a new push.


Jacqueline McLaren Miller is a Senior Associate in EWI's Strategic Trust-Building Initiative, where she runs the U.S. program.