U.S. Trade Bill to Normalize Trade Relations With Russia

The Associated Press

Published: November 14, 2012 (Issue # 1735)

WASHINGTON — One of the first actions of the post-election Congress is an expected vote to give U.S. exporters greater access to Russia’s newly opened markets.

The House, returning to Washington next week after some six weeks on the campaign trail, plans to take up the legislation that would extend permanent normal trade relations to Russia and another former Soviet state, Moldova. Senate Democratic leaders have stressed the importance of the issue and said they hope to take the legislation up soon after it passes the House. The Obama administration is a strong supporter.

To make the bill more palatable to critics of Russia’s human rights record, both the House and Senate plan to combine the trade bill with legislation that imposes sanctions on officials involved in human rights violations. That bill is named after lawyer Sergei Magnitsky, who died in jail in 2009 after allegedly being subjected to torture.

There are differences between the House and Senate approaches to the Magnitsky measure that need to be worked out.

The administration and economists have predicted that U.S. exports of goods and services, currently at $11 billion, could double in five years if normal trade relations are established.

But without congressional action, American businesses stand to lose out to other foreign competitors also bidding to increase their share of the Russian market. The United States, which now accounts for only 4.5 percent of Russian imports, already lags behind China, with a 16 percent share, and Europe with 40 percent.

The Coalition for U.S.-Russia Trade this week sent lawmakers a letter signed by more than 500 trade associations and businesses urging quick action on the trade bill. “In what should be an exciting time of Russia’s market-opening for U.S. business, our executives have been relegated to an ‘observer’ status — watching as our competitors will snap up contracts that will lock in commercial relationships for years to come,” the coalition wrote.

Christopher Wenk, senior director of international policy at the U.S. Chamber of Commerce, said getting the trade bill passed has been the top legislative trade priority for the chamber this year. “This is obviously long overdue,” he said. “The bottom line is that we under-export to Russia right now, and there is a lot of potential out there.”

The main objective of the trade bill would be eliminating what is called the Jackson-Vanik provision, passed in 1974, that tied trade with the Soviet Union to Moscow’s allowing Jews and other minorities to leave the country. The act has long outlived its purpose and presidents have annually waived it over the past 20 years, but it must be removed before U.S.-Russia trade can be fully normalized.

Deputy Foreign Minister Sergei Ryabkov said that a repeal of the Jackson-Vanik amendment would normalize bilateral trade.

“We’re very concerned with a lack of normal, serious, solid economic relations with the United States,” he said in an interview with the Public Post news portal, as cited by Interfax.