WASHINGTON — The Senate is set to endorse legislation that both normalizes trade with Russia and highlights the discord between the two countries over human rights issues.
The vote Thursday to establish permanent normal trade relations with Russia will bring considerable relief to U.S. exporters and investors anxious about losing shares of Russia’s growing market to European and Chinese competitors. It also could bring retaliation from Moscow over a provision that sanctions Russian officials who allegedly commit human rights violations.
The House passed the legislation last month on a 365-43 vote, and President Barack Obama’s administration has urged Congress to move quickly to get it to the president’s desk.
There’s a sense of urgency because Russia in August became the last major economic power to enter the World Trade Organization, committing it to lowering tariffs, removing other trade barriers, protecting intellectual property, opening up its service industries and submitting to the WTO’s dispute resolution process.
But unless Congress formally normalizes trade relations, U.S. exporters will be alone among the members of the 157-nation WTO unable to enjoy the increased market access. That puts them at a serious disadvantage in competing for sales in the world’s ninth-largest economy, with an estimated 140 million consumers.
“This is no small matter,” said Sen. Max Baucus, Montana Democrat, chairman of the Senate Finance Committee. Russia’s accession to the WTO “includes lower tariffs on aircraft and auto exports, larger quotas for beef exports and greater access to Russia’s telecommunications and banking markets.”
Specifically, Congress must eliminate the Jackson-Vanik Amendment to a 1974 trade bill that tied trade with the former Soviet Union to the freedom of Jews and other Soviet minorities to emigrate. While that provision is no longer relevant and for the past 20 years has been waived every year by the president, it remains on the books.
Past efforts to remove it have been frustrated by the reluctance of lawmakers to reward a Russian government with a poor human rights record and a hostile stance toward U.S. policies. Most recently, members of Congress have objected to Russian support of the Assad government in Syria and its suppression of dissent at home.
To ease this opposition, the trade bill was combined with human rights legislation named after Sergei Magnitsky, a Russian lawmaker and whistle-blower who died in a Russian prison three years ago, allegedly after being tortured.
The bill as written in the House would deny visas and freeze the financial assets of Russian officials thought to be involved in human rights violations. The original Senate bill would have extended those sanctions to human rights violators worldwide, but Sen. Ben Cardin, Maryland Democrat, author of the Senate version, said Wednesday he would accept the House bill in order to get it to the president. Cardin said he was disappointed that the focus had been narrowed, but “we will look for other opportunities to reinstitute the global application of the Magnitsky standards. It’s the right thing.”
In Russia, however, Prime Minister Dmitry Medvedev last week warned of “both symmetrical and asymmetrical reaction” if the Magnitsky provision is part of the trade bill. Medvedev welcomed the elimination of the Jackson-Vanik Amendment, “that relic of the past,” but said it was “inadmissible when one country tries to dictate its will to another.”
The normalization of relations with Russia has been the top trade priority of the year for such groups as the U.S. Chamber of Commerce. The administration and economists have predicted that U.S. exports of goods and services to Russia, now about $11 billion a year, could double in five years with the removal of trade barriers.
The legislation also extends permanent normal trade relations to the former Soviet state of Moldova.
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