House passes bill normalizing Russian trade

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Congress agrees to normalize US and Russia trade relations

Congress agrees to normalize US and Russia trade relations. (AP image)

WASHINGTON (AP) – Flashing some post-election bipartisanship, House Democrats and Republicans joined forces Friday in voting overwhelmingly to end Soviet-era trade restrictions so that American manufacturers and farmers can take advantage of Russia’s expanding and more open markets.

The vote to establish permanent normal trade relations with Russia has been a top priority of American businesses concerned that they are being left behind as Europe and China move into Russia’s market of 140 million consumers.
Russia joined the World Trade Organization in August, a move that requires it 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 United States would be alone among 156 WTO members, unable to benefit from those new trade rules.

The legislation stalled before the 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 lawmakers have been mollified by the addition to the bill of a measure that punishes Russian officials involved in human rights violations. The bill passed on a 365-43 vote.

The action came on the third anniversary of the passing of Russian lawyer and whistleblower Sergei Magnitsky, who died in a Russian prison after allegedly being tortured. The human rights bill bears his name.

“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., Rules Committee chairman and a strong advocate of free trade.

The legislation, which has the backing of the Obama administration, now goes to the Senate, where the Democratic leadership has indicated it will consider it promptly. Differences remain between the House and the Senate on the human rights part of the bill: the House bill imposes visa and financial restrictions on Russian officials linked to human rights abuses. The pending Senate bill 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 measure. “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 bill, the White House said in a statement supporting its passage, “is about providing opportunities for American businesses and workers and creating jobs here at home.”

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

At issue is the Jackson-Vanik Amendment to a 1974 trade bill that 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 have annually waived the now-obsolete requirement, but it still must be eliminated as part of a permanent trade relations accord.
Democrats who normally take a harder look at trade bills were strongly supportive, with many mentioning the addition of the Magnitsky measure.

“It’s important to remember that the rule of law in another country is vital, otherwise investment is perilous,” said Rep. Sander Levin, 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.  Russian Deputy Foreign Minister Sergei Ryabkov said Friday that Moscow had prepared a “tough” response to the passage of the Magnitsky bill. On Thursday the ministry spokesman said the measure was an “unfriendly, provocative act.”

The Obama administration has said that while it does not object to the Magnitsky bill, 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.

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