Permanent normal trade relations for Russia passes House

Nov 23, 2012

With the dust barely settled from the elections, lawmakers returned to work searching for an acceptable path forward on the nation’s fiscal problems and also to address several other long-simmering issues such as trade relations.

And to the relief of many, one of the first bills to begin the lame duck session was a bill passed through the House of Representatives that would upgrade U.S. trade relations with Russia. But the bill has a controversial piece that includes punishment of Russian officials for human rights violations.

The House passed the legislation Nov. 16 providing Permanent Normal Trade Relations (PNTR) to Russia and Maldova by a vote of 365 to 43. This legislation repeals the 1974 Jackson- Vanik amendment and includes new human rights-related sanctions on Russia and trade enforcement measures.

House Ag Chair Frank Lucas says this action will provide additional value and increased access into a growing market for U.S. farmers and ranchers through lower tariffs and more certain trade rules.

Farm organizations and business groups had hoped Congress would have acted shortly after Russia joined the World Trade Organization (WTO) three months ago, but were relieved that if finally was seeing progress.

Under WTO rules, Russia could raise tariffs on U.S. exports to Russia if Congress does not approve PNTR.

“The House of Representatives’ passage today of legislation granting Permanent Normal Trade Relations with Russia will ensure the U.S. benefits from Russia’s accession to the World Trade Organization and remains competitive in that market. We applaud House members for approving this critical legislation,” said Bob Stallman, president, American Farm Bureau Federation.

“America’s farmers and ranchers will have more certain and predictable market access as a result of Russia’s commitment not to raise tariffs on any products above the negotiated rates and to apply international food safety standards in a uniform and transparent manner. Russia’s membership in the WTO will provide significant commercial opportunities for U.S. agriculture, including increased sales of poultry, pork and beef,” Stallman said.

The bill now goes to the Senate, where the Finance Committee approved a different version of the measure last July.

Russia has a strong capacity for growth in food imports from the U.S. U.S agricultural exports to Russia are forecast at $1.4 billion for 2012. Russia has potential for significant increases in poultry, pork and beef consumption, which are the top U.S. agricultural exports to Russia.

“With this potential for expanding meat exports, obtaining PNTR with Russia is even more important,” said Stallman. “Russia’s membership in the WTO will provide significant commercial opportunities for U.S. agriculture.”

Senate Finance Committee Chair Max Baucus has called on the Senate to pass the PNTR measure after the Thanksgiving recess to get it on President Obama’s desk before the end of the year. Baucus says American businesses will continue losing out on export opportunities in the Russian market to competitors in China, Europe and other WTO member nations without it.

American Soybean Association (ASA) President Steve Wellman says ASA hopes the Senate passes its version of this bill with the same expediency and bipartisan cooperation as their House counterparts so American soybean farmers can reap the benefits of this new partnership.

“This vote brings us one step closer to the day when America’s businesses and workers will enjoy the full benefits of Russia’s World Trade Organization membership, and will no longer be disadvantaged compared to their global competitors,” said United States Trade Representative Ron Kirk.

While agriculture groups are praising the House, others are pointing out problems with the human rights portion. Russian opposition leader Boris Nemtsov was in Washington to witness the vote.

House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen, a Republican, said in statement that Nemtsov told her that Russia’s president, Vladimir Putin, had made stopping the legislation his utmost priority because it threatened to ensnare those closest to the Russian leader.

Ros-Lehtinen went on to say that she would vote for the bill, but remained opposed to the PNTR.

“Those who argue for granting Russia PNTR, which has until now been prevented by what is known as the Jackson-Vanik amendment, focus on the supposed bilateral trade benefits. But the issue that concerns me and many Members is not trade but human rights,” she said in a statement.

“Advocates of repeal say that the Jackson-Vanik amendment is outdated and purely symbolic and therefore should be disregarded.

But in the area of human rights, symbols can have a very great importance. Over the years, Jackson-Vanik has become a sign of the continuing U.S. commitment to human rights in Russia and elsewhere. Repealing the amendment could very well be interpreted as an indication that our commitment is now weakening,” she added. — Traci Eatherton, WLJ Editor