U.S. needs Russia in WTO: White House aide

Reuters News
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Posted: Apr 15, 2011 3:53 PM
U.S. needs Russia in WTO: White House aide

By Doug Palmer

WASHINGTON (Reuters) - The Obama administration is making a big push to get Russia into the World Trade Organization by the end of the year and to persuade Congress to approve permanent normal trade relations with the former Cold War enemy, a top White House official said on Friday.

"It's not a gift to Russia. We think it's in our national interest," White House national security official Michael McFaul said in a speech at the Peterson Institute for International Economics.

Getting Russia in the WTO and establishing PNTR "is the top priority in our entire bilateral relation," he said.

Russia, the largest economy still outside the WTO, has been negotiating for about 18 years to join the world body.

Helping Russia to complete those negotiations would boost economic ties, which have not made as much progress as other issues under a "reset" of the relationship, McFaul said.

The United States needs Russia's cooperation on a number of geopolitical issues, including those concerning Iran.

Stronger U.S. economic ties with Russia would make it easier for Moscow to see the benefits of siding with Washington, McFaul said.

Once Russia has finished its accession to the WTO, Congress would be required to approve PNTR by removing it from a human rights provision known as the Jackson-Vanik amendment.

That 1974 law tied normal trade relations with communist countries to the rights of religious minorities to emigrate freely. The White House has waived the measure each year since 1994, but it remains on the book.

McFaul acknowledged President Barack Obama cannot realistically ask lawmakers to approve PNTR until there is a final WTO accession deal. But the administration wants Congress to vote as soon as possible after a final deal, he said.

SETTING THE TONE

A draft study released by the Peterson Institute on Friday estimated U.S. goods exports to Russia could double to $19 billion after Russia joins the World Trade Organization.

But it warned U.S. exporters could lose sales if Congress refuses to grant PNTR to keep pressure on Moscow to improve its human rights record or address other concerns.

Consequently, "the U.S. congressional vote on extending permanent normal trade relations could set the tone for economic relations between the United States and Russia for the next decade to come," the report said.

McFaul and Russian Finance Minister Alexei Kurdin, in a separate speech earlier on Friday, said Russia was very close to finishing its accession process. That could set the stage for a congressional vote in coming months.

Russia's WTO entry would create export opportunities for U.S. poultry, pork and beef as well as other items such as wine, fruits and nuts, the report said.

U.S. drug and medical device manufacturers also should profit, as should exporters of heavy industrial machinery such as tractors and oil and natural gas field equipment, it said.

U.S. services companies in sectors ranging from telecommunications to finance to express delivery also should see increased business in Russia.

Refusing to grant permanent normal trade relations to Russia would put the United States at odds with a WTO rule requiring members to "unconditionally" provide all other members the same market access.

Russia could respond by denying U.S. farmers and companies the market-opening benefits of its accession to WTO, putting them at a disadvantage to European, Chinese, and other competitors.

McFaul said he did not believe withholding PNTR would be an effective way to pressure Moscow on human rights. Congress should explore other avenues to do that, he said.

(Reporting by Doug Palmer; Editing by Xavier Briand)