A Collaboration with the University of Pittsburgh

Admitting Russia to the WTO Will Create Stronger Economic Ties

JURIST Guest Columnist Kambiz Behi of Mostafavi & Associates and JURIST Columnist Edsel Tupaz of Tupaz & Associates argue that the admittance of the Russian Federation into the World Trade Organization will create stronger economic relations despite the misgivings of US lawmakers...

Later this year, the State Duma of the Russian Federation will consider a bill that would permit Russia's admission into the World Trade Organization (WTO) by ratifying the organization's accession package. The WTO is an organization which aims to promote the liberalization of international trade and about 95 percent of world trade takes place within the WTO framework. However, Russia is the only non-WTO member of the G-8 and G-20 groups and it is also the world's largest non-WTO economy. On November 10, 2011, the WTO accepted Russia's accession package and on December 16, 2011, the organization approved Russia's membership. Following this approval, the Russian parliament has 220 days to ratify the accession package in order to become a member.

Russia officially began working on its WTO accession package as early as 1993, but progress has been slow due to internal politics and Russia's involvement in Georgia. In recent years, Russia demanded that the WTO accept all members of the Customs Union of Belarus, Russia and Kazakhstan as an "all-or-nothing" condition for acceptance to the organization. The Customs Union between Belarus, Russia and Kazakhstan, which became operational on January 1, 2012, created a single economic space among the three countries. Recently, however, Russia softened its position and instead agreed that as a member of the WTO it would publish all Customs Union legislation prior to their official adoption. Russia further guaranteed that it would provide time for WTO members to comment on the competency of proposed Customs Union regulations.

In broad strokes, Russia's membership in the WTO would require that it open up its markets to rules-based competition, guarantee and safeguard intellectual property and investments rights and strengthen its protection of the rule of law and human rights.

On the issue of the rule of law and human rights, the US Congress has been preparing to introduce the Sergei Magnitsky Rule of Law Accountability Act [PDF] to replace the Soviet-era Jackson-Vanik Amendment. The Jackson-Vanik Amendment, originally passed under the Trade Act of 1974, barred favorable trade relations with the Soviet Union due to the country's record of curtailing human rights and, particularly, for restricting Jewish emigration from the country. During the Cold War, the amendment was often used as a tool for limiting trade with countries that curbed human rights and individual rights.

While many former communist countries have since been able to escape the restrictions of the Jackson-Vanik Amendment, the Customs Union members of Belarus, Russia and Kazakhstan can still arguably be subject to the legislation. Every year since 1992, the US has been allowing "normal" trade relations with the Russian Federation under an annual waiver of the Jackson-Vanik Amendment. When Russia joins the WTO, however, this practice would be in violation of WTO rules as all member states are meant to work together as normal, permanent trade partners. Treaty law aside, the conditions which necessitated the Jackson-Vanik Amendment are no longer present in Russia — the country allows emigration of minorities and, in fact, has a thriving Jewish community. Yet, due to some recent cases, US lawmakers have raised concern regarding restrictions of human rights in the Russian Federation. Consequently, in exchange for the repeal of the Jackson-Vanik Amendment a group of US congressmen including Senators Ben Cardin (D-MD) and John McCain (R-AZ) and Representatives Ed Royce (R-CA), Chris Smith (R-NJ) and Jim McGovern (D-MA) introduced the Sergei Magnitsky Rule of Law Accountability Act. This Act aims at imposing sanctions on persons responsible for the detention, abuse, or death of Sergei Magnitsky as well as any other person responsible for extrajudicial killings, torture or other gross violations of international human rights.

Sergei Magnitsky was an attorney representing Hermitage Capital, a hedge fund in Russia co-founded by the British investor William Browder who was expelled from Russia in 2005. In the course of his work representing Hermitage Capital, Magnitsky publicized a scheme involving fraudulent activities of government officials. Magnitsky was arrested and died on November 16, 2009, at the age of 37, in Matrosskaya Tishina Prison in Moscow.

The Sergei Magnitsky Rule of Law Accountability Act would sanction individuals "for the conspiracy to defraud the Russian Federation of taxes on corporate profits through fraudulent transactions and lawsuits against Hermitage," and for persons:

[R]esponsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights committed against individuals seeking (A) to expose illegal activity carried out by officials of the Government of the Russian Federation; or (B) to obtain, exercise, defend, or promote internationally recognized human rights and freedoms, such as the freedoms of religion, expression, association, and assembly, and the rights to a fair trial and democratic elections; or (C) acted as an agent of or on behalf of a person in a matter relating to an activity described in paragraph (A) or (B).
Replacing the Jackson-Vanik Amendment with the Sergei Magnitsky Rule of Law Accountability Act would mean that, while normal trade relations with the Russian Federation could be established under the regulations of the WTO, the US Congress could still seek to avoid compromising continuing efforts at promoting human rights and the rule of law. In other words, the Act would allow for the establishment of a free trade partnership and the promotion of business in Russia while preserving, in statutory form, the state's duty of deterring violations of transparency, human rights and the rule of law. The original purposes and objectives of the Jackson-Vanik Amendment could be carried forth, as the argument goes, in the form of the Sergei Magnitsky Rule of Law Accountability Act, which strikes a balance between promoting good trade relations and safeguarding human rights.

Edsel Tupaz is a private prosecutor of the House prosecution panel in the impeachment trial of Philippine Chief Justice Renato Corona. He is a graduate of Harvard Law School and Ateneo Law School. Tupaz is a public interest lawyer and law professor whose expertise lies in comparative constitutional law and policy, teaching at law schools in the US and the Philippines.

Kambiz Behi is a partner of Mostafavi & Associates. Dr. Behi's interests and expertise lie in comparative law, comparative constitutional law, international law and legal anthropology, teaching law and social sciences at universities in the US, Russia and Belarus. He holds a PhD in Social Anthropology from Harvard University, a Masters in Regional Studies, likewise from Harvard University, and a Master of Laws (LL.M.) form University of Pennsylvania Law School.

Suggested citation: Kambiz Behi and Kambiz Behi Admitting Russia to the WTO Will Create Stronger Economic Ties, JURIST - Sidebar, Jun. 15, 2012, http://jurist.org/sidebar/2012/06/tupaz-behi-russia-wto.php

This article was prepared for publication by Jordan Barry, an associate editor for JURIST's professional commentary service. Please direct any questions or comments to him at professionalcommentary@jurist.org

Opinions expressed in JURIST Commentary are the sole responsibility of the author and do not necessarily reflect the views of JURIST's editors, staff, donors or the University of Pittsburgh.

Support JURIST

We rely on our readers to keep JURIST running

 Donate now!

About Professional Commentary

Professional Commentary is JURIST's platform for newsmakers, activists and legal experts to comment on national and international legal developments.

Hotline welcomes submissions, inquiries and comments at professionalcommentary@jurist.org.

© Copyright JURIST Legal News and Research Services, Inc., 2013.