For the second time in as many days, the Obama administration sent Ronald Kirk, U.S. trade ambassador, and William Burns, deputy secretary of state, to deliver that message to Congress. They urged the Senate Finance Committee on Thursday to reconcile trade relations with Russia before it’s too late.
That would mean terminating the outdated Jackson-Vanik amendment, they said, which has placed restrictions on Russia since 1974, and authorizing President Obama to establish permanent normal trade relations (PNTR) with the country, a message they also delivered to the House Ways and Means Committee on Wednesday.
“Taking such action will ensure that the WTO agreement will apply between the United States and Russia,” Mr. Kirk said, “and that U.S. businesses and workers will have the opportunity to enjoy all of the benefits of Russia’s membership.”
But opponents say Russia is at odds with America on too many fronts to give them a pass on trade.
Sen. John Cornyn, Texas Republican, lists Russia’s poor record on intellectual property rights, support for Iran’s nuclear program and the conflict in Syria, unfair elections, politically motivated imprisonments, human rights violations, and widespread government corruption as evidence that the U.S. should not embrace improved trade relations.
“We cannot trust Russia,” he said at the hearing.
Sen. Orrin G. Hatch, Utah Republican and ranking member on the finance committee, is also wary.
“Russia continues to see itself an act as a military, strategic, and economic counterweight to the United States,” he said.
That would put American exporters at a disadvantage compared with international competitors who will get easier access to Russian markets.
Sen. John Thune, South Dakota Republican, complained that the Obama administration and Democrats last year moved too slowly on approving free-trade agreements with South Korea, Colombia and Panama, giving international competitors a head start.
“We should not repeat that mistake,” he said during the hearing.
If Congress does strike down the Jackson-Vanik amendment and the president extends permanent normal trade relations status to Russia, it would likely help U.S. exporters create many American jobs.
“Russia’s accession to the World Trade Organization this summer will mean thousands of jobs here in the United States - but only if we pass Russia permanent normal trade relations legislation by August,” said Sen. Max Baucus, Montana Democrat and chairman of the finance committee.
Russia’s economy is growing with an emerging middle class.
In 1994, when it began negotiating WTO membership, Russia was still struggling with an economic crisis brought on by the collapse of the Soviet Union. It was only the 16th-largest economy in the world with a gross domestic product of $277 billion, Mr. Kirk said.
But today is has grown to become the seventh-largest economy at $1.9 trillion, and it is predicted to grow at 4 percent per year during the next five years.
“PNTR is not a favor to Russia,” Secretary of Agriculture Tom Vilsack said. “It is a significant opportunity for America’s farmers, ranchers, and producers.”