WASHINGTON, July 18, 2012- The Senate Finance Committee unanimously approved legislation to grant Russia Permanent Normal Trade Relations (PNTR) status today, including language restricting human rights violators and corrupt trade policies. The committee’s passage comes a few weeks before Russia becomes a formal member of the World Trade Organization (WTO).
“Russia will formally be a member of the WTO next month,” Committee Chairman Max Baucus, D-Mont said. “That is our deadline for passing PNTR. If we miss that deadline, American farmers, ranchers, workers and businesses will lose out to the other 154 members of the WTO that already have PNTR with Russia.”
In an agreement among committee leadership, Baucus modified the original bill to include the Sergei Magnitsky Rule of Law Accountability Act of 2011. The Act requires that individuals involved in the death of Sergei Magnitsky, as well as other human rights violators in Russia and around the world, are ineligible to hold a visa to enter the United States. Today’s action would repeal the Jackson-Vanik amendment, a Cold War-era trade restriction.
“By enacting PNTR together with the Magnitsky bill, we are replacing Jackson-Vanik with legislation that addresses the corruption and accountability issues that Russia confronts today,” Baucus said.
Ranking Member Orrin Hatch, R-Utah, noted that “it is with some trepidation that we undertake this task,” emphasizing the Russian practices and policies contrary to those of the United States. However, “if we do not grant PNTR to Russia our workers and job creators could be left at a competitive disadvantage,” he said before voting to pass the legislation.
Senator John Cornyn, R-Texas, attempted to include an amendment that would delay the effective date of PNTR until Russia certified that its government would stop sending arms used in the murder of Syrian civilians to Syrian President Bashar Assad's regime. Noting that the Magnitsky bill strives to vindicate an individual’s death, Cornyn stressed “how much more compelling is it” that Congress attempt to stop the supply of weapons used to kill thousands of civilians.
Although the committee members defeated his amendment, Cornyn voted in favor of the overall PNTR after Senator John Kerry, D-Mass., assured him that the Foreign Relations Committee would consider the amendment. However, Kerry called the amendment “counterproductive,” because “withholding PNTR doesn’t hurt Russia, it hurts our exporters.”
Baucus said establishing normal trade relations with Russia could double U.S. exports to the nation, which currently accumulate to approximately $9 billion per year.
Senator Chuck Grassley, R-Iowa, welcomed Russia’s membership into the WTO, but noted that “this administration should’ve done more to advocate the interests of U.S. farmers in this process.”
“Farming in the U.S. didn’t get the attention it deserves,” he said, regarding “prime opportunities” during WTO discussions to urge a separate sanitary and phytosanitary (SPS) agreement, as well as negotiate an equivalency agreement.
“Particularly, pork farmers have had to deal with a number of unjustifiable standards from Russia in recent times,” Grassley said. “USTR (U.S. Trade Representative) needs to deliberately push Russia to uphold WTO SPS standards for pork, poultry, beef and any agricultural products facing SPS challenges from Russia.”
The PNTR legislation had strong bipartisan support, but some, including Senator Mike Crapo, R-Idaho, noted the vote as “a lost opportunity.”
“Russia remains a belligerent actor on the world stage,” he said. “The reality is Russia is being embraced into world trade despite its recent actions. If our experience with China is any indication, there will be a lot of lawsuits and a lot of challenges brought with this agreement.”
“Despite this, I will support Russian PNTR,” Crapo concluded, noting that U.S. traders should not be punished.
Several members noted that trade with Russia essentially maintained normal status over the past 20 years, but must now be made permanent with Russia’s accession to the WTO. Senator John Thune, R-S.D., said without granting PNTR, “American manufactures, farmers, ranchers and service providers would be at a competitive disadvantage. At a time when our economy is slowing, this is the worst thing we could do.”
“Russia will become a WTO member next month,” he said, noting that the nation is the fifth largest importer of U.S. agricultural products. “We’re not giving Russia anything new. The only issue is whether or not we will allow U.S. businesses to take advantage of it.”
“By joining it with the Magnitsky bill, we will replace the outdated Jackson-Vanik law,” which he said will help the “humanitarian situation” in Russia.
“We have a very limited window to get this bill done before the August recess, but I hope we will continue to make that push,” Thune added. Congress leaves for August recess in two weeks, limiting the time the Senate and House have to pass and agree on a bill.
House Ways and Means Committee Chairman Dave Camp, R-Mich, released a statement today that he intends “to have a bill introduced in the next few days,” and hopes to move “this important jobs bill through the committee on a bipartisan basis as soon as possible.”
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