(November 19, 2012) On Friday, November 16, the U.S. House of Representatives approved California Chamber of Commerce-supported legislation that will enable U.S. companies to compete in the growing and profitable Russian marketplace.
H.R. 6156, establishing Permanent Normal Trade Relations (PNTR) with Russia, passed the House by a vote of 40 – 8. Next, the CalChamber is urging the U.S. Senate to act as quickly as possible after Thanksgiving to approve the PNTR legislation.
The House vote was:
YEAS: Bass, Becerra, Berman, Bilbray, Bono Mack, Calvert, Campbell, Capps, Costa, Davis, Denham, Dreier, Eshoo,Farr, G. Miller, Garamendi, Herger, Honda, Hunter, Issa, Lewis, Linda Sanchez, Loretta Sanchez, Lungren, Matsui, McCarthy, McClintock, McKeon, McNerney, Nunes, Pelosi, Richardson, Rohrabacher, Roybal-Allard, Royce,Schiff, Sherman, Speier, Thompson, Waxman.
NAYS: Baca, Chu, Hahn, Lee, Lofgren, Napolitano, Stark, Waters.
Absent; Abstaining; Not Voting: Filner, Gallegly, G. Miller, Woolsey.
Congressional passage of the PNTR legislation will enable U.S. companies to gain the benefits of the market-opening reforms that were part of Russia joining the World Trade Organization (WTO) in August.
Russia’s joining the WTO was a welcome development for American workers, farmers and companies. Joining the WTO includes a commitment by Moscow to further open its market, safeguard intellectual property and investments, and strengthen the rule of law. The result could be more U.S. exports and more American jobs, as U.S. companies see huge potential in Russia, by far the largest economy in the world that had yet to join the WTO.
The Russia PNTR legislation passed the U.S. House Ways and Means Committee and the U.S. Senate Finance Committee before the election. Supporters of PNTR for Russia encouraged the White House and Congress to work together to ensure passage of Russia PNTR this year.
The legislation is crucial in order for U.S. manufacturers, service providers, agricultural producers and their employees to take advantage of the many market-opening and transparency commitments that form Russia’s accession package to the WTO. PNTR also gives the United States a powerful tool by enabling the United States to ensure that Russia abides by those commitments through internationally binding WTO dispute settlement.
Russia is the world’s ninth largest national economy with 140 million increasingly prosperous consumers. Russia also has exhibited a growing demand for high quality goods and services. Yet many of Russia’s WTO commitments that will greatly improve its business climate will be out of the United States’ reach — unless Congress passes Russia PNTR legislation. These WTO commitments include Russia’s adherence to the rules of the international trading system regarding intellectual property rights, science- and risk-based regulation for animal and plant health, and liberalizations in key sectors such as services.
Of the top 15 U.S. trading partners, Russia was the market where American companies enjoyed the fastest export growth last year (38%). Approval of Russia PNTR legislation will translate directly into new export sales and jobs in the United States. The President’s Export Council estimates that U.S. exports to Russia—which, according to estimates, topped $11 billion in 2011—could double or triple following Russia’s membership in the WTO. Meanwhile, the United States gives up nothing—not a single tariff—in approving PNTR with Russia.
Russia is an important part of U.S. business’ global strategy to create and sustain jobs at home by enhancing long-term competitiveness abroad. Many U.S. companies have developed vibrant, profitable and rapidly growing business and trade with Russia, with clear strategic benefits to parent companies, exports from, and employment in, the United States. Without PNTR, U.S. companies and their employees will be left behind competitors in this growing and profitable market.
Moving Beyond Outdated Law
The short and simple bill establishing PNTR for Russia moves it beyond the outdated requirements of the Jackson-Vanik amendment to the Trade Act of 1974. The amendment was enacted with the chief purpose of ending the policy that prevented emigration of Jews from the then-Soviet Union. With respect to Russia, the Jackson-Vanik amendment has accomplished its objective. Russia terminated its exit fees on Jewish emigrants in 1991, and today Russian Jews freely emigrate to Israel and elsewhere.
Since 1992, U.S. presidents of both parties have certified annually that Russia complies with the Jackson-Vanik amendment’s provisions. This certification has allowed the United States to maintain Normal Trade Relations (NTR) status with Russia.
Because no other WTO member has a law similar to Jackson-Vanik, all of Russia’s trading partners except the United States are already benefitting from Russia joining the WTO. If Congress fails to enact PNTR with Russia, U.S. industry will continue to be on the sidelines of Russia’s market, at a disadvantage for lucrative contracts, and without the full tools provided by a WTO relationship.
Failure to approve PNTR, thereby removing Russia from Jackson-Vanik requirements, would put the United States at a unique disadvantage in the Russian market. Meanwhile, European and Asian companies are building on their already-significant head start in tapping the growing Russian market.
The CalChamber, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business. New multilateral, sectoral and regional trade agreements ensure that the United States may continue to gain access to world markets, resulting in an improved economy and additional employment of Americans.
Further, while the CalChamber deplores human rights abuses in Russia and elsewhere around the world, the CalChamber supports extension of PNTR status and accession to the WTO for Russia as an important step toward greater respect for human rights and political freedom for the Russian people. U.S. trade and investment provide crucial support for the entrepreneurial forces in Russian society that advocate further economic and political reform.
U.S. trade with Russia helps to promote values Americans cherish. Approval of PNTR will support Russian entrepreneurs and workers whose prosperity and jobs depend on trade and access to the outside world. The United States should support, not isolate, the segments of Russian society that offer the best hope for further progress toward greater freedom and the rule of law for all of Russia.
Membership in the WTO can be the cornerstone of stable U.S.-Russia commercial relations. Further, the WTO is the foundation for continued dialogue and cooperation among the world’s trading partners, and can serve as leverage regarding certain economic issues, thereby giving a chance to supporters of change.
Contact California Senators Dianne Feinstein (D-San Francisco) and Barbara Boxer (D-Greenbrae) and urge them to support PNTR with Russia. Congress must pass PNTR as soon as possible following Thanksgiving, or else risk putting U.S. businesses, workers and farmers at a long-term disadvantage in this important market.
For more information, see www.calchamber.com/RussiaPNTR
Staff Contact: Susanne Stirling