An annual report from the Office of the U.S. Trade Representative finds that Russia is continuing to disregard the commitments it made when it joined the World Trade Organization but that the U.S. has little influence over the matter because it has ceased virtually all engagement with Russia on trade and investment issues, either bilaterally or in the WTO.
According to the report, U.S.-Russia trade relations in 2024 continued to be governed in large part by the severe sanctions the U.S. has imposed in response to Russia’s war against Ukraine. Extensive U.S. export controls, sanctions, and import bans, as well as the reputational risks of doing business in Russia, have resulted in a significant diminution of bilateral trade. For similar reasons, hundreds of U.S. companies have withdrawn from or significantly reduced their presence in Russia. As a result, bilateral trade has declined significantly since Russia’s accession to the WTO in 2012, with imports down 83.3 percent to $5.3 billion and exports down 87.7 percent to $2.0 billion.
The report highlights a number of ongoing concerns about “Russia’s increasingly inward-looking industrial and trade policies.” Russia still restricts bilateral trade through import bans on a wide variety of agricultural products and tariffs (above their WTO bound rates) on certain industrial products. Russia also limits exports of certain industrial products and restricts a wide variety of agricultural products and agricultural inputs. Other behind-the-border measures include an import licensing regime that acts to restrict imports of consumer technology products, food safety measures not based on science, and a domestic tax regime that favors domestic software and domestic technology companies.
In addition, the report states, import substitution remains a core tenet of Russia’s industrial policy. Alongside non-tariff measures imposed on imports, Russia has enacted explicit import substitution policies that applied initially to government procurement but have been extended to purchases by state-owned enterprises and even to private enterprises. To support its import substitution regime Russia has adopted, among other measures, bans on purchasing imported equipment.
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