July 27, 2012 / 5:06 PM / 5 years ago

House panel approves bill to upgrade Russia trade ties

WASHINGTON (Reuters) - A key congressional committee on Thursday voted overwhelmingly to lift a Cold War-era restriction on trade with Russia, but the top congressional Republican said President Barack Obama must do more to get the bill passed into law.

The White House and business groups want lawmakers to approve the legislation before leaving next week for a month-long recess so U.S. companies can share in the full benefits of Russia’s entry in the World Trade Organization on August 22.

But House of Representatives Speaker John Boehner appeared to throw cold water on the idea of final congressional approval next week, despite the bipartisan vote in the House Ways and Means Committee in favor of the trade legislation.

“If the president really thinks this is an important issue that we have to deal with, then maybe he ought to be out there making the case for it. I haven’t seen that as yet,” Boehner told reporters.

The White House has said passage of the bill is its top trade priority. But the measure faces opposition from labor unions, an important Democratic constituency ahead of the November 6 presidential and congressional elections.

“The President is committed to working with Congress to seek passage of this bill that will enable him to extend Permanent Normal Trade Relations to Russia and allow American businesses, ranchers, farmers, and workers to receive the full benefit of Russia’s WTO commitments,” White House spokeswoman Caitlin Hayden said.

“We urge Congress to take action on this important legislation as soon as possible,” she said.

Unions contend the deal Russia made to join the WTO is too weak in a number of areas, and the bill would not ensure Moscow lives up to the WTO pact.

Ways and Means Committee Chairman Dave Camp, a Republican, said the House could take up the measure next week, but only if the Democratic-controlled Senate agrees not to tinker with it extensively.

“We can’t send a revenue bill over to the Senate without understanding what they’re going to do with it,” Camp said. “Once they commit to a process we can rely on, we can move in the House. But we can’t move in the House until we get a commitment on that process.”

The uncertain outlook left business leaders pleading for Congress to act.

“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.

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

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


The Ways and Means Committee bill establishes “permanent normal trade relations” (PNTR) between the two countries by repealing a 1974 provision known as the Jackson-Vanik amendment which tied favorable U.S. tariff rates to the rights of Jews in the former Soviet Union to emigrate freely.

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.

Union groups, bitter over what they call a decade of broken promises by China since it joined the WTO, have flooded Congress with letters this week against the pact.

“America’s working families cannot afford another mistake like the grant of PNTR to China - their livelihoods depend upon getting trade policy right. That is why we urge you to oppose a premature grant of PNTR for Russia,” the AFL-CIO labor federation said in a letter to lawmakers on Wednesday.

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 Representative Sander Levin, the top Democrat on the Ways and Means Committee, said they expect similar provisions will be added to the panel’s PNTR 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 and Mohammad Zargham

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