Will Congress Give Russia Upper Hand in Trade Relations?
With Russia's official addition to the World Trade Organization’s ranks (WTO) last week, a window of opportunity for the United States is closing due to congressional inaction. Unless the right course is charted, Russia’s WTO membership could jeopardize U.S. exports and place domestic jobs at risk.
Prior to finalizing its membership in the WTO on August 23rd, Russia maintained “free reign to arbitrarily raise tariffs on American goods” and the ability to “use unjustified and non-scientific measures to block U.S. farm exports, exclude U.S. service providers from key sectors and impose other unfair barriers” on American trade. These unfair dynamics run parallel to the dramatic increase in our exports to Russia in the last several years: an increase of 50 percent from 2005-2010 alone and a staggering 40 percent in 2011 alone, just one year following. The domestic jobs provided through such export spikes are all the more vital in dire economic times.
Given these metrics and Russia’s new status as a WTO member, Congress must pass Permanent Normal Trade Relations (PNTR) immediately. Doing so offers a chance to put American manufacturing on equal footing while holding Russia accountable for maintaining human rights standards. Otherwise, competitors will gain a foothold as Russia is given the keys to a “new political reality” that could have a devastating effect on American businesses.
As a member of the WTO, Russia will have greater power to threaten American trade and manufacturing interests. WTO membership grants Russia the ability to reduce tariffs from 15 to 7 percent for the 155 members of the WTO, but it also grants Russia the ability to maintain discriminatory tariffs with no fear of reciprocation. This is a risk Congress cannot afford to let American manufacturers take.
Passing the PNTR legislation doesn't even need to be a partisan issue, as voices from across America’s political spectrum are united in support. Prominent policymakers from Secretary of State Hillary Clinton to the U.S. Chamber of Commerce have come out in support of passage. American-based manufacturers, such as Boeing, Caterpillar, and Microsoft have long maintained effective partnerships with Russia, but freely dangling the temptation of harming American business in front of their face is a road best left untraveled.
What then, is fueling Congressional inaction on PNTR? A bit of legislation that, at best, is no more than a Cold War relic and, at worse, gives Russia leeway to violate human rights.
At the heart of the human rights issue is the decades-old Jackson-Vanik Amendment, which was aimed at compelling the Soviet Union to allow free emigration of religious minorities. It is often noted that Russia has not enabled such restrictions on religious groups for over 20 years, yet Jackson-Vanik has remained in place.
There is a clear alternative that can and must be passed in conjunction with PNTR legislation. In one motion, Congress should act to repeal Jackson-Vanik while replacing it with the Sergei Magnitsky Act (S. 1039 and H.R. 4405), which would adequately address the human rights violations that abound in the Russia of today. Should it be passed, it “would block visas and freeze assets of Russians implicated in human rights abuses.”
The PNTR legislative package gives Congress the opportunity to seamlessly ensure that American businesses -- and the jobs they support -- are treated fairly in the international market, while maintaining the high standard of transparency and respect for human rights that defines us as a nation; its a win-win for economic stability, jobs, and free and fair trade.