House panel approves bill to upgrade Russia trade relations

Reuters News
|
Posted: Jul 26, 2012 10:43 AM
House panel approves bill to upgrade Russia trade relations

WASHINGTON (Reuters) - A key congressional committee on Thursday voted overwhelmingly to lift a Cold War-era restriction on trade with Russia, raising U.S. business community hopes that the full Congress will approve the measure before lawmakers leave town next week.

The House of Representatives Ways and Means Committee, on a bipartisan voice vote, approved the bill to ensure that U.S. companies share in the full benefits of Russia's entry into the World Trade Organization on August 22.

"We give up nothing with this legislation, not a single U.S. tariff, but we would obtain a powerful new enforcement tool and important rights" for U.S. companies in one of the world's biggest emerging economies, said Ways and Means Committee Chairman Dave Camp, a Republican.

It does that by establishing "permanent normal trade relations" (PNTR) between the two countries and repealing a 1974 provision known as the Jackson-Vanik amendment which tied favorable U.S. tariffs rates to the rights of Jews in the former Soviet Union to emigrate freely.

Russia is the largest economy still outside the WTO and its entry is expected to help double U.S. exports to that country to about $19 billion over the next five years.

After the committee vote, Camp told reporters that before bringing the bill up on the House floor, Republicans want assurances from the Democratic-controlled Senate that revenue provisions will not be added in that chamber to the bill.

Camp said he was optimistic that could be done soon.

But Representative Sander Levin, the top Democrat on the Ways and Means panel, said it could be difficult to finish work before the August congressional recess.

The nearly 40-year-old Jackson-Vanik amendment is mostly symbolic now because both Democratic and Republican administrations have judged Russia to be in compliance since 1994. But it has stayed on the books and is at odds with WTO rules requiring members to give equal treatment to exports from all other members on an unconditional basis.

If Congress does not act, Moscow could deny U.S. firms some of the market-opening concessions it made to join the WTO, putting those companies at a disadvantage to foreign competitors in one of Europe's fastest-growing economies.

"It would be the height of irresponsibility to have a situation where our Chinese competitors have more rights to compete in the Russian market than American companies and we've got to make sure that doesn't happen," said Bill Lane, director of government affairs for Caterpillar Inc.

The push to pass the bill comes as U.S.-Russia relations have been strained by disagreements over the crisis in Syria and Iran's nuclear program, as well as questions about Moscow's commitment to human rights, democracy and the rule of law.

PNTR legislation passed last week by the Senate Finance Committee tackled some of those concerns by including the so-called "Magnitsky bill" named for an anti-corruption Russian lawyer who died in 2009 after a year in Russian jails.

Both Camp and Levin said they expect similar provisions will be added to Ways and Means bill before it comes to a vote on the House floor.

The provision would direct the State Department to publish the names and deny visas to people believed responsible for the detention, abuse or death of Sergei Magnitsky, and for the Treasury Department to freeze their assets.

It would also punish other human rights abusers in Russia or anywhere in the world, and allow certain members of Congress to suggest individuals to be put on the sanctions list.

A slightly different version of the Magnitsky bill was passed by the House Foreign Affairs Committee and differences with Senate Finance Committee version still need to be resolved.

Moscow strongly opposes the Magnitsky bill, saying the last thing it wants is for the anti-Soviet Jackson-Vanik amendment to be replaced with new anti-Russian legislation.

(Reporting By Doug Palmer; Editing by Vicki Allen)