Country Applicability of the U.S. Normal Trade Relations (Most-Favored-Nation) Status

Country Applicability of the U.S. Normal Trade Relations (Most-Favored-Nation) Status

Order Code 96-463 E
Updated February 23, 2004
CRS Report for Congress
Received through the CRS Web
Country Applicability of the U.S.
Normal Trade Relations
(Most-Favored-Nation) Status
Vladimir N. Pregelj
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Summary
The United States accords permanent normal-trade-relations (NTR) (formerly
called most-favored-nation (MFN)) treatment to all its trading partners except three
countries to which it is denied by law and eight countries whose NTR status is
temporary and subject to the conditions of Title IV of the Trade Act of 1974.
As a matter of general policy embodied in its own law (Section 126; Trade Act of
1974; 19 U.S.C. 2136), the United States extends unlimited and permanent
nondiscriminatory (NTR/MFN) treatment to all of its trading partners. Hence, there
exists no official specific list of countries with NTR status.1
Excepted from this general policy have been certain countries whose MFN status
was suspended by law. In several such instances, permanent NTR treatment has been
restored by legislation; in most other cases, however, the status has been restored (and
remains in effect) on a temporary, periodically renewable basis. Such restoration and
continuation in effect through semiannual or annual renewals is subject to the conditions
set by the requirements of the Jackson-Vanik freedom-of-emigration amendment (Section
402; 19 U.S.C. 2432) and related provisions of Title IV of the Trade Act of 1974 (e.g.,
existence of a 3-year, renewable bilateral trade agreement).
The countries that are, at present, denied NTR status by the United States are:
Cuba, Laos, and North Korea.
Countries to which NTR treatment is at present being accorded based on conditional
restoration under the provisions of Title IV of the Trade Act of 1974 are:
1 For purposes of comparison: a recent State Department list of the countries of the world
contains the names of 192 independent countries, and 62 dependencies; it separately lists Taiwan.

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(1) under the presidential waiver of full compliance with the Jackson-Vanik
amendment requirements, which must be renewed annually and is subject to disapproval
by joint resolution of Congress:
Belarus and Turkmenistan (former constituent republics of the Soviet Union), and
Vietnam.
(2) under the presidential determination of full compliance with the Jackson-Vanik
amendment requirements, which must be made semiannually and is subject to disapproval
by joint resolution of Congress at the time of year-end renewal:
Armenia, Azerbaijan, Kazakhstan, Moldova, Russia, Tajikistan, Ukraine, and
Uzbekistan (all of them former Soviet Union republics)
In recent Congresses, legislation was introduced (but not acted upon) to grant
permanent NTR status to former Soviet republics Kazakhstan, Russian Federation,
Ukraine, and Uzbekistan, and to Cuba. In the 108th Congress, legislation is pending to
restore permanent NTR status to Armenia, Cuba, Kazakhstan, Laos, and Russia. PNTR
status has been restored to Afghanistan, and to Serbia and Montenegro by Presidential
action as authorized by relevant legislation.
For more detailed information see CRS Report RL31558, Normal trade relations
(most-favored-nation) policy of the United States; and Trade Briefing Book entry (Most-
f a v o r e d - n a t i o n t r e a t m e n t / N o r m a l t r a d e r e l a t i o n s )
[www.congress.gov/brbk/html/ebtra30.html]; or contact the author at (202) 707-7747.