With President Obama's recent signing of HR 6156, which extends Permanent Normal Trade Relations (PNTR) to Russia and Moldova, Russia's tariff on U.S. wines will be reduced from 20% to 12.5% over the next four years. The first reduction to 18.125% will occur no later than September 1, 2013; the tariff will then drop 1.875% every 12 months until 2016 when it will be reduced to 12.5%. Currently, Moldova does not import U.S. wines.
Under U.S. law, before U.S. wineries could benefit from the tariff reductions brought about by Russia joining the World Trade Organization in 2012, Congress needed to pass Permanent Normal Trade Relations legislation. H.R. 6156 will level the playing field for California wineries seeking to increase sales in Russia.
Wine Institute member wineries have made significant inroads into the Russian market. It is reported that California wines are now present in most major cities in Russia, with close to 50 California brands currently being sold in the country.
As the world's ninth largest economy, Russia had been the only major market outside the World Trade Organization (WTO). After 18 years of negotiations, Moscow finally joined the WTO in August, and in the process it enacted important reforms to open its market, protect intellectual property, and strengthen the rule of law. For more information, see the United States Trade Representative (USTR) press statement at www.ustr.gov/about-us/press-office/press-releases/2012/december/amb-kirk-statement-jvpntr.
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