House passes bill normalizing Russian trade

AP News
Posted: Nov 16, 2012 1:51 PM
House passes bill normalizing Russian trade

WASHINGTON (AP) — The House showed some bipartisan cooperation Friday by voting overwhelmingly to end Soviet-era trade restrictions so that American companies and farmers can take advantage of Russia's expanding and more open markets.

But Moscow reacted angrily to a provision that punishes Russian officials involved in human rights violations, threatening to increase tensions between the two countries at a delicate time. "A defiantly unfriendly and provocative attack," the Russian Foreign Ministry branded it and promised "a tough response."

The Obama administration supports the legislation, which now goes to the Senate, where the Democratic leadership has indicated it will consider the measure promptly. The House passed it by a 365-43 vote.

The vote to establish permanent normal trade relations was a priority for American businesses concerned that they were being left behind as Europe and China move into Russia's market of 140 million consumers.

Russia joined the World Trade Organization in August, and Moscow is now required to lower tariffs and take other market-opening measures. But unless Congress voted to eliminate a 1974 trade restriction and establish permanent trade relations, the U.S. would be alone among 156 WTO members in failing to benefit from those new trade rules.

The legislation stalled before the U.S. election as lawmakers shied away from voting for a measure that might appear to be aiding Russia at a time when President Vladimir Putin's government had become increasingly hostile. Many members of Congress were mollified by the addition to the bill of a measure that punishes Russian officials involved in human rights violations.

The vote came on the third anniversary of the death of Russian lawyer and whistleblower Sergei Magnitsky, who died died in a Russian prison after allegedly being tortured.

"It is very gratifying that the first item out of the chute after the election is something we will be able to do in a bipartisan way," said Rep. David Dreier, R-Calif.

Differences remain between the House and the Senate on the human rights proposal. The House bill imposes visa and financial restrictions on Russian officials linked to human rights abuses. The Senate version would broaden that to human rights violators around the world.

Numerous House members said they would not have voted for the trade bill without inclusion of the human rights proposal. "The issue that concerns me and many members is not trade but human rights," said Rep. Ileana Ros-Lehtinen, R-Fla., chairman of the House Foreign Affairs Committee.

The trade bill, unlike bilateral free-trade treaties, requires no concessions from the U.S. side. With passage, U.S. companies and farmers would see lower tariffs, better protections for intellectual property and greater access to Russia's service market and would be able to go to the WTO to resolve disputes.

The administration and economists have predicted that U.S. exports of goods and services, currently at $11 billion, could double in five years if trade relations were normalized.

The White House said in a statement supporting passage that the bill "is about providing opportunities for American businesses and workers and creating jobs here at home."

"Ensuring that American companies and workers can compete in the growing Russian market is essential to increasing U.S. exports, growing our economy and creating American jobs," said Doug Oberhelman, chairman and CEO of Caterpillar Inc., and chairman of the Business Roundtable's international engagement committee.

The legislation also would extend permanent normal trade relations to Moldova, another former Soviet state.

At issue is the Jackson-Vanik Amendment, named after Sen. Henry "Scoop" Jackson, D-Wash., and Rep. Charles Vanik, D-Ohio. The amendment to a 1974 trade bill tied trade with the Soviet Union to greater freedom for Jews and other Soviet minorities seeking to leave the country. Since the 1990s, U.S. presidents annually have waived the now-obsolete requirement, but it still must be eliminated as part of a permanent trade relations accord.

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Democrats who normally take a harder look at trade bills were strongly supportive, with many mentioning the addition of the Magnitsky provision.

"It's important to remember that the rule of law in another country is vital, otherwise investment is perilous," said Rep. Sander Levin of Michigan, top Democrat on the Ways and Means Committee. "The Magnitsky legislation was added here in part in recognition that when you talk about trade, you have to look at a fuller picture," the Michigan congressman said.

But passage of the human rights provision could spike tensions with Moscow at a time when the United States and Russia already are at odds over issues including missile defense, Syria's civil war and Iran's nuclear ambitions.

After the vote, the Russian Foreign Ministry called the Magnitsky provision "a defiantly unfriendly and provocative attack. The congressmen did not listen to our repeated warnings that such a step will negatively affect the general atmosphere of Russian-American relations and will not remain without a tough response from our side."

The Obama administration has said that while it does not object to the Magnitsky provision, it would have preferred that the trade legislation be taken up on its own. The White House policy statement on the bill refers generally to the need to promote respect for human rights around the world and says the administration will continue to work with Congress to support those seeking a free and democratic future in Russia.