“The United States, our allies and partners continue to work together to increasing economic pressure on (Vladimir) Putin and further isolating Russia on the world stage“, Biden said this Friday in a speech at the White House,
It added that “further steps were taken to ban (trade with) flagship sectors of the Russian economy, in particular seafood, vodka and diamonds.”
Shortly after, the US Department of Commerce announced a ban on exports of luxury goods to Russia and Belarus.
“We will not allow (Vladimir) Putin and his friends to continue living in opulence while causing enormous suffering throughout Eastern Europe,” said the head of that portfolio, Gina Raimondo.
Until now Moscow benefited from a “most favored nation” trade status, which allows free exchange of some goods and services, the AFP news agency reported.
Russia would thus join Cuba and North Korea, the only countries excluded by the world’s leading power from the principle of reciprocity, the basis of most international trade relations.
The final decision on Russia’s exclusion from the normal reciprocal trade regime with the United States – which is made in coordination with the G7 and the European Union – rests with the US Congress.
Democratic and Republican members of Congress, who show rare bipartisan momentum when it comes to sanctions against Moscow, have already signaled their support for the measure.
The most-favored-nation clause – known in the United States as the “normal permanent trading relationship” – is a pillar of free trade.
This principle of reciprocity and non-discrimination currently governs most trade relations between States.
The World Trade Organization (WTO) requires that any trade advantage, such as a reduction in tariffs, granted by one member be automatically applied to all the others.
Moscow, which joined the WTO in 2012, has benefited from this regime ever since. Specifically, depriving Russia of this status would allow its trading partners to impose higher customs duties on it, penalizing its exports.
In 2021, the United States imported some $30 billion worth of Russian goods, including $17.5 billion worth of crude oil, a commodity on which Washington has just imposed a full embargo.
This new sanction will be added to many others applied by the West to gradually cut the economic and financial ties of the country led by Vladimir Putin with the rest of the world.
Source: Ambito
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