June 20 (Bloomberg) -- The U.S. should grant Russia permanent normal trade status without tying it to a measure that would punish human-rights violators, according to U.S. Trade Representative Ron Kirk.
President Barack Obama’s administration wants a bill that deals with U.S.-Russia trade relations “while we would continue to work with the Congress to address the human rights concerns” with Russia, Kirk said at a House Ways & Means Committee hearing today in Washington.
Congress is considering measures that would do both as Russia prepares to join the Geneva-based World Trade Organization as soon as this year. The Republican chairman of the Ways & Means Committee, Representative Dave Camp of Michigan, said he also supports a “clean and targeted” bill to prevent delay.
Republicans and the administration are at odds with the Senate, where Finance Committee Chairman Max Baucus,a Montana Democrat, has said he is willing to consider the trade and human-rights measures together. The Senate panel is scheduled to hold a hearing on the issue tomorrow.
Companies including Boeing Co. of Chicago and Caterpillar Inc. of Peoria, Illinois, are pushing Congress to repeal the 1974 Jackson-Vanik amendment, which limited trade with the Soviet Union, so that the Obama administration can grant its successor, Russia, permanent trade relations.
“American companies run the risk of being outliers,” Doug Oberhelman, Caterpillar’s chairman and chief executive officer, said at the hearing. The company, which wants Russia to be its primary export market, may be subject to higher tariffs compared with international competitors unless Congress acts, he said.
Congress should act quickly to give the president the authority to change Russia’s status, Kirk said. “Having clear rules of the road will provide the predictability, transparency and market access that our businesses and exporters seek,” he said.
Lawmakers including Representative Sander Levin of Michigan, the top Democrat on committee, support the measure to impose financial and travel restrictions on human-rights violators in Russia. He said he expects the bill to be combined with legislation establishing permanent trade ties.
Jackson-Vanik, which barred favorable trade with the Soviet Union to punish it for blocking emigration by Jewish citizens, “was a human rights provision in a trade bill,” Levin said. “That precedent goes back decades.”
While the U.S. has, since 1992, granted annual preferential treatment to imports from Russia, lawmakers and the administration are seeking to make the trade ties permanent, Deputy Secretary of State William Burns said in remarks prepared for the hearing.
Without improved relations, the U.S. won’t be able to take advantage of the WTO’s dispute-resolution process when dealing with Russia, he said. Russia also wouldn’t have to apply its agreement to international health and safety standards to U.S. agricultural exports, according to Burns.
In addition to human-rights concerns, the U.S. and Russia differ over bringing an end to conflicts in Syria, Burns said. Withholding the trade designation won’t give the U.S. leverage on the issue, he said.
U.S. companies are seeking to expand their market share in Russia, and business groups including the U.S. Chamber of Commerce say they will be at a disadvantage if the U.S. doesn’t change Russia’s status by the time it joins the WTO. U.S. goods exports to Russia totaled $8.3 billion in 2011, according to the Census Bureau. Imports were about $34.6 billion.
Democrats Baucus and Senator John Kerry of Massachusetts, along with Republicans John Thune of South Dakota and John McCain of Arizona, have sponsored a bill that would let the administration grant Russia permanent trade ties.
The trade bill is S. 3285. The human-rights legislation is H.R. 4405.
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