In 1993, Russia formally applied for accession to the General Agreement on Tariffs and Trade (GATT). Its application was taken up by the World Trade Organization (WTO) in 1995, the successor organization of the GATT. Russia's application has entered into its most significant phase as Russia negotiates with WTO members on the conditions for accession. The process had been moving forward, but, the last few years, differences over some critical issues have made the timing of Russian accession to the WTO uncertain. Accession to the WTO had been critical to Russia and its political leadership. President, now Prime Minister, Vladimir Putin had made it a top priority. However, in the last year, Russian leaders have sent mixed signals regarding their commitment to the accession process. In August 2008, Prime Minister Putin stated that WTO accession may not be beneficial to Russia. Russia has also changed some of its trade rules, such as lowering quotas on meat imports and raising tariffs on auto imports, that contradict commitments that it made to the United States, the European Union(EU) and other WTO members as part of the accession process. However, in December 2008, Russian Foreign Minister Lavrov stated that Russia was committed to acceding to the WTO. The United States, the EU and other trading partners, have supported Russia's accession to the WTO as a way to increase stability and predictability in Russia's foreign trade and investment regime. However recently they have been critical of the trade barriers that Russia has imposed. Also, Russia's August 2008 military conflict with Georgia has caused the United States and other WTO members to re-examine their support. On November 19, 2006, U.S. and Russian officials signed a bilateral agreement on Russia's accession to the WTO, thus completing a major step in the accession process. Russia still needs to complete "multilateral" negotiations with the WTO working party, that consists of representatives from about 60 WTO member countries, including the United States. That process has been on a virtual hold; the working group has been conducting only "informal meetings" because Georgia, a WTO member, has blocked formal meetings. Congressional interest in Russia's accession to the WTO is multifaceted. Members of Congress are concerned that Russia enters the WTO under terms and conditions in line with U.S. economic interests, especially gaining access to Russian markets as well as safeguards to protect U.S. import-sensitive industries. Some Members also assert that Congress should have a formal role in approving the conditions under which Russia accedes to the WTO, a role it does not have at this time. The Congress has a direct role in determining whether Russia receives permanent normal trade relations (NTR) status which has implications for Russia's membership in the WTO and U.S.-Russian trade relations. Without granting PNTR to Russia, the United States might not benefit from the concessions that Russia makes upon accession. This report examines the issue of Russia's accession to the WTO, focusing on the implications for Russia, the United States, and the WTO. It begins with a short overview of the WTO accession process and reviews the history of the Soviet Union's relationship with the GATT/WTO. It provides a brief discussion of Russian economic conditions and the status of economic reforms as they are a major impetus for Russia's application to join the WTO. The focus of the report is the status of Russia's accession application and the outstanding issues. The report concludes with an analysis of the implications of Russia's accession to the WTO for Russia, the United States, the other WTO members and for the WTO itself and with an analysis of the outlook for the Russia's application. This report will be updated as events warrant. The WTO's membership of 153 countries and customs areas spans all levels of economic development, from the least developed to the most highly developed economies. The WTO came into existence in January 1995 as a part of the agreements reached by the signatories to the General Agreement on Tariffs and Trade (GATT) at the end of the Uruguay Round negotiations. The WTO's primary purpose is to administer the roughly 60 agreements and separate commitments made by its members as part of the GATT (for trade in goods), the General Agreement on Trade in Services (GATS—for trade in services), and the agreement on trade-related aspects of intellectual property rights (TRIPS). The membership in the GATT/WTO has grown exponentially. The GATT was originally founded in 1947 by 23 countries, and the WTO now has 153 members. Ukraine and Cape Verde are the newest two members, having joined on May 2008 and July 2008, respectively. Membership in the WTO commits its members to fundamental principles in trade with other members, including: Most-favored nation treatment (MFN) : The imports of goods and services originating from one member country will be treated no less favorably than imports of goods and services from any other member country. MFN is to be unconditional. In practical terms, this means that in most cases a country cannot apply a higher import tariff to a good from one member country than it applies to like goods from any other member country. National treatment : Imports of goods and services are treated no less favorably than like goods and services produced domestically. In practical terms this means that governments cannot discriminate against imports in the application of laws and regulations, such as regulations to protect consumer safety or the environment. Transparency: Government laws and regulations that affect foreign trade and investment are to be published and available for anyone to see. Procedures to implement the laws and regulations are to be open. Lowering Trade Barriers Through Negotiations: Since the GATT's creation, its members have conducted eights rounds of negotiations to lower trade barriers. At first these negotiations focused on lowering tariffs. But over time, the rounds have broadened GATT/WTO coverage to include nontariff barriers, such as discriminatory government procurement practices, discriminatory standards, and trade-distorting government subsidies. The last completed round, the Uruguay Round (1986-94), resulted in the most ambitious expansion of rules to cover, for the first time, trade in agricultural products and services and government policies and practices pertaining to intellectual property rights protection and foreign investment regulations that affect trade. Reliance on tariffs: In order to promote predictability and openness in commerce, the WTO requires member countries to use tariffs and avoid using quotas or other nontariff measures when restricting imports for legitimate purposes, such as on injurious imports. As part of its function to administer the rules established under the agreements, the WTO provides a mechanism for the settlement of disputes between members where the dispute involves alleged violations of WTO agreements. Moreover, each member's trade regime is reviewed by the WTO Secretariat from time-to-time to ensure that it conforms to WTO rules. Trade among WTO members accounts for about 90% of total world trade. The collapse of the Soviet Union and its East European Bloc and the movement of many developing countries toward liberal trade policies have spurred interest in joining the WTO. Article XII of the agreement that established the WTO sets out the requirements and procedures for countries to "accede." "Any state or customs territory having full autonomy in the conduct of its trade policies is eligible to accede to the WTO on terms agreed between it and WTO members." The accession process begins with a letter from the applicant to the WTO requesting membership. The WTO General Council, the governing body of the WTO when the Ministerial Conference is not meeting, forms a Working Party (WP) to consider the application. Membership in the WP is open to any interested member-country. More than 60 member countries, including the United States, are part of the WP on Russia's accession. The U.S. delegation is led by the Assistant U.S. Trade Representative for WTO and Multilateral Affairs and includes representatives from the U.S. Departments of Commerce and Agriculture. The applicant submits a memorandum to the WP that describes in detail its current trade regime. The applicant and the WP then negotiate to determine what legislative and structural changes the applicant must make to meet WTO requirements and to establish the terms and conditions for entry of the applicant into the WTO. The WP's findings are then included in a "Report of the Working Party" and are the basis for drawing up the "Protocol of Accession." While it negotiates with the WP, the applicant must also conduct bilateral negotiations with each interested WTO member. During these negotiations the WTO member indicates what concessions and commitments on trade in goods and services it expects the applicant to make in order to gain entry, and the applicant indicates what concessions and commitments it is willing to make until the two agree and set down the terms. The terms of the bilateral agreements are combined into one document which will apply on an MFN basis to all WTO members once the applicant has joined the WTO. The accession package is conveyed to the General Council or Ministerial Conference for approval. Article XII does not establish a deadline for the process. The length of the process depends on a number of factors: how many legislative and structural changes an applicant must make in its trade regime in order to meet the demands of the WP, how quickly its national and sub-national legislatures can make those changes, and the demands on the applicant made by members in bilateral negotiations and the willingness of the applicant to accept those demands. Because WTO accession is a political process as well as a legal process, its success depends on the political will of all sides—the WTO member countries and the applicant country. A formal vote is taken in the WTO that requires a 2/3 majority for accession, although in practice the WTO has sought to gain a consensus on each application. The process can take a long time: China's application took over 15 years.