On July 21, 2012, Russian president Vladimir Putin signed Russia’s protocol of accession to the WTO. As reported in January, Russia finalized its WTO accession protocol last December. Under that protocol, Russia agreed to reductions in its tariffs on imports of manufactured goods and agricultural products, as well as technical barriers to trade.

On July 10, the Russian legislature, the Duma, ratified the protocol of accession despite significant domestic opposition. President Putin’s signature formally ends Russia’s eighteen-year long quest to join the WTO. With Russia’s accession, the WTO regime covers over 97 percent of worldwide trade.

According to Mark Thompson, a corporate partner at King & Spalding’s London office and co-chair of the firm’s private equity practice, Russian accession to the WTO bears both promises and risks:

Our clients view Russia’s accession to the WTO as potentially being very important. It will take some time for them to digest the full impact of Russia's membership, but global clients that import goods into Russia from the pharmaceutical industry, to aviation to heavy manufacturing see a lot of potential. We are spending time with many international companies helping them to understand the impact of Russia’s accession on their industries and potential remedies. The impact of WTO accession in Russia will not only impact existing operations of clients, but could also have significant ramifications on acquisitions in Russia. Consequently, particularly while the WTO is relatively new to Russia, companies should pay particular attention to WTO issues when conducting due diligence. When reviewing their position in Russia, it is also a good time for companies to evaluate other potential WTO issues around the world as well.

Mr. Thompson emphasizes, however, “that it is too early to see how the Russian government is going to behave in the new WTO regime.”

Russia’s accession does not immediately affect U.S.-Russia trade. Current U.S. law, which dates to the Soviet period, prevents the United States from according Most-Favored-Nation trading status to Russia. Accordingly, Russia is not required at present to reduce its trade barriers vis-à-vis the United States. Although President Obama has asked Congress to revisit this law before Russia formally joins the WTO in August, the drive to extend “permanent normal trade relations” to Russia has met significant opposition. Many members of Congress express concerns over Russia’s commitment to the WTO regime and its deficient record in the area of human rights and the rule of law.