Congress Likely to Delay Russian Trade Bill for a Month

Congress probably will delay action on legislation to ease U.S. trade relations with Russia until after that country joins the World Trade Organization next month.

The measure, sought by U.S. companies such as Caterpillar Inc. (CAT), was approved by the House Ways and Means Committee on a voice vote yesterday. House Speaker John Boehner, an Ohio Republican, told reporters he doesn’t plan a vote next week on the measure because the House has a full schedule of other issues to consider.

With lawmakers scheduled to leave Washington next week for a monthlong recess, the delay would preclude enactment before Congress returns in September.

If President Barack Obama wants speedy action by Congress, then “he ought to be out there, making the case for it,” Boehner said.

The delay was prompted by questions from Republican members unfamiliar with the legislation and objections by organized labor that are eroding Democratic support, a House Republican leadership aide who isn’t authorized to speak publicly said on condition of anonymity.

Russia’s refusal to support United Nations peacekeeping efforts in Syria also “remains a concern” among Democrats and is a “big hurdle” to passage, said Representative John Larson of Connecticut, chairman of the House Democratic Caucus.

‘Visceral Feeling’

“There is a feeling on both sides of the aisle of anger at Russia,” said Representative Eliot Engel, a New York Democrat who supports normalized trade relations with Russia. House passage next week would be difficult because “people’s visceral feeling would be to strike back at the Russians,” he said.

Opposition from unions such as the International Association of Machinists and Aerospace Workers only compounds the measure’s difficulty in winning support among Democrats because “labor is a strong ally,” said Representative William Lacy Clay Jr., a Missouri Democrat.

The Obama administration, inactive on the issue for many months, has “significantly picked up the pace” of its lobbying for the measure in the last month, said Representative Kevin P. Brady, a Texas Republican who is chairman of the Ways and Means trade subcommittee. Still, that hasn’t translated yet into a vote count among Democrats, he said.

“It’s always difficult to move a bill unless you know where the votes are going to be,” Brady said.

Expanding Exports

Enactment of the measure, lifting a 1974 curb on full trade relations with Russia, is necessary under WTO rules before theObama administration grants the country permanent normal trade status. The Senate Finance Committee unanimously approved its version of the bill on July 18.

“With unemployment stuck above 8 percent, we cannot miss any opportunity to help create jobs and expand our exports,” House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said. “This bill is such an opportunity.”

Russia, the world’s seventh-largest economy, will join the WTO on Aug. 22. Companies including Caterpillar of Peoria, Illinois, and Chicago-based Boeing Co. (BA) have expressed concern that their international competitors will face lower tariffs and gain an advantage in doing business in Russia. The Obama administration also supports swift action by lawmakers.

‘Fair Chance’

Without a vote in Congress, the U.S. wouldn’t gain intellectual property protection, adoption of food-safety regulations on Russian products or have the ability to resolve trade disputes through the Geneva-based WTO, according to the Coalition for U.S.-Russia Trade, a Washington-based group representing U.S. companies and industry groups.

Lawmakers should have a “sense of urgency on this issue,” Boeing Chief Executive Officer James McNerney and Caterpillar CEO Douglas Oberhelman, members of the Washington-based Business Roundtable, said in a letter to House and Senate leaders. Votes by the full House and Senate “next week would help ensure American companies, workers and farmers have a fair chance to compete and to sell their goods and services to Russia.”

Representative Jim McDermott of Washington, the top Democrat on Brady’s trade subcommittee, said there was “a lot of grumbling” over lost U.S. business opportunities in South Korea because the European Union implemented a trade deal with that country before Congress approved a U.S.-Korean agreement.

WTO Entry

With Russia scheduled to enter the WTO next month, U.S. companies want to start making deals under the global trade organization’s rules “before somebody else gets there,” McDermott said.

The Senate version of the legislation imposes travel and financial restrictions on human-rights violators in Russia and any other country. House lawmakers plan to link a similar measure, already approved by the Foreign Affairs Committee, to their trade bill before the full chamber votes.

“The bill cannot go forth without” the rights legislation being attached,” Representative Sander Levin of Michigan, the top Democrat on the Ways and Means Committee, said after yesterday’s hearing.

Camp said lawmakers will look for a “commitment” from the Senate to act before the House considers the legislation. Senate Democratic leaders haven’t scheduled a vote on the measure and have expressed doubt that it would be before the August recess.

The bills are H.R. 6156 and S. 3406.

To contact the reporters on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net; James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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