House Expected to Vote on Russia PNTR

November 13, 2012

The House is planning to take long-delayed action this week on a bill to normalize trade relations with Russia, which is likely to be the first item taken up by lawmakers in their post-election lame duck session. The bill, Russia and Moldova Jackson-Vanik Repeal Act of 2012 (H.R. 6156) is expected to be ready for floor action by Friday.

The measure would provide “permanent normal trade relations” by lifting a Cold War trade provision known as the Jackson-Vanik amendment. The move is needed to allow U.S. companies to share in the full market benefits of Russia’s accession to the World Trade Organization (WTO), and U.S. Trade Representative Ron Kirk has been among those urging Congress to approve it.

U.S.-Russian trade is governed by Title IV of the Trade Act of 1974, which conditions Russia’s normal trade relations (NTR) status, including the “freedom-of-emigration” requirement of the Jackson-Vanik amendment. The Jackson-Vanik amendment in the U.S. was introduced to prohibit most-favored-nation (MFN) status for non-market economies originally on the basis of human rights concerns. The U.S. has retained the law each year, but has, since 1992, granted a waiver to Russia.

On Dec. 16, 2011, the 153 members of the World Trade Organization (WTO) invited Russia to join the organization, after Russia completed an 18-year accession process. The WTO requires each member to accord newly acceding members “immediate and unconditional” MFN status which is called NTR in U.S. law. Russia formally joined the WTO on Aug. 22 and, in order to comply with the WTO rule, the U.S. would have to change Russia’s status from conditional NTR to unconditional or PNTR.

Final passage of PNTR with Russia will translate directly into new export sales and jobs here in the U.S.  Of the top 15 U.S. trading partners, Russia was the market where American companies enjoyed the fastest export growth last year—38 percent. 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 now that Russia is in the WTO. Meanwhile, the U.S. gives up nothing — not a single tariff — in approving PNTR with Russia.

Since both the House Ways and Means Committee and the Senate Finance Committee approved PNTR legislation by wide bipartisan margins, it is likely the vote this week by Congress will also pass with bipartisan support. Lawmakers do not want to risk putting U.S. businesses, workers and farmers at a long-term disadvantage in this important market.