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Op Ed: "A new opening for U.S. exports to Russia"

By Acting Commerce Secretary Rebecca Blank and U.S. Trade Representative Ron Kirk
Opinion Editorial, POLITICO 

On August 22, Russia became a member of the World Trade Organization (WTO). This was a historic moment given that 140 million consumers will be able to buy and sell goods and services more freely as a result of Russia’s membership in the global, rules-based trading system.

For the past 18 years, both Republican and Democratic administrations have worked tirelessly to support Russia’s efforts to join the WTO. We have known for years that—when this happens—we would see a boost to U.S. exports, leading to more good jobs here at home. 

Indeed, U.S. exports to Russia grew by 40 percent last year alone. Russia’s desire for American-made products and services is one of the reasons we have seen U.S. export-supported jobs increase by 1.2 million from 2009 to 2011.

In joining the WTO, Russia has pledged to cut tariffs for manufactured goods coming into Russia and to open its service sector to foreign competition. This means that growth in U.S. exports to Russia could accelerate.

But to realize these benefits, we first have to establish permanent normal trade relations (PNTR) with Russia.

Right now, an outdated, Cold-War-era law—the 1974 Jackson-Vanik Amendment—stands in the way. It was passed to pressure the Soviet Union into lifting emigration restrictions by imposing conditions on whether the U.S. would apply normal tariffs to imports from that country.

Russia has long since lifted those emigration restrictions. Therefore, each year since 1994, the United States has found that Russia has indeed met the conditions for normal tariff treatment.

Under WTO rules, however, the 157 WTO Members are not allowed to apply special conditions or requirements to each other. Therefore, the U.S. has to stop applying the conditions of the Jackson-Vanik Amendment to Russia in order for our nation to benefit from the lower tariffs available to all other WTO members.

Only when the WTO Agreement applies between the United States and Russia will American businesses be able to compete—on a level playing field according to WTO rules—with businesses from other countries that are already taking advantage of Russia’s membership to expand sales and market share there.

We are almost there. The U.S. House of Representatives voted overwhelmingly to stop applying Jackson-Vanik and to extend PNTR to Russia on November 16 and the Senate is poised to act. This legislation will allow U.S. manufacturers, farmers, and other exporters of both goods and services to finally be able to gain from commitments that were negotiated by the United States.

And the opportunities are too big to ignore. With Russia’s fast-growing economy currently ranked just 31st in receiving U.S. exports, there is clear potential for growth. Once we establish PNTR, American companies will be able to sell Russians more aircraft, machinery, medical devices, and other high-quality exports.

Furthermore, PNTR with Russia will help ensure that American exporters can benefit from stronger intellectual property rights protections and more transparency on how trade rules are applied in Russia. Importantly, the United States will also have more tools to enforce our rights under the WTO if and when trade disputes occur.

More broadly, PNTR will support the overall political and economic changes that Russians themselves are striving to achieve.

Do we lose anything if we stop applying the Jackson-Vanik Amendment to Russia? The answer is no.

The administration will continue to express concerns and pursue changes to address Russia’s human rights violations, restrictions on political freedom, and certain foreign policies. But the fact is, applying the Jackson-Vanik Amendment to Russia does not give us any leverage on these important issues.

But without PNTR American businesses and workers will be unfairly disadvantaged when competing with European, Asian, and other foreign companies that are quickly moving to expand their sales to Russia.

That is simply unacceptable. The 10 million Americans whose jobs are supported by exports deserve better.

We look forward to Senate consideration of PNTR this week and for Congress to send this legislation to the President’s desk.

We need to put U.S.-Russian trade relations on a strong, predictable footing with Russia operating under the WTO. We cannot wait for U.S. businesses to start losing market share—it will be too late.

The facts are clear: Extending PNTR to Russia is the right thing to do to support American jobs and U.S. competitiveness. Let’s work together—right now—to make it happen.