WASHINGTON — US officials Wednesday upped pressure on Congress to scrap a decades-old law imposing trade restrictions on Moscow and predicted Russia could complete legal moves to join the WTO by late August.
US Trade Representative Ron Kirk told US lawmakers that a 1974 law, the Jackson-Vanik amendment, under which normal trade relations are granted to Russia only on an annual basis would harm US business if it remains in place.
“Let me be clear — Russia will be a WTO member by the end of the summer, and if the WTO agreement does not apply between the United States and Russia, our businesses, innovators and exporters will be at a competitive disadvantage compared to their global counterparts,” he said.
Washington’s former Cold War adversary has been given the green light to join the World Trade Organization, which means the Russian and US governments will need to grant each other permanent normal trade relations (PNTR) by the time the accession is complete.
Kirk said action was needed urgently as he believed Moscow had until August 23 to complete the necessary legislative actions which they launched in parliament two weeks ago.
“Every one of us believes they will do that, because they have initiated to do it. Thirty days after that, Russia will be a member of the WTO,” Kirk added in his testimony to the House Ways and Means Committee.
US exports to Russia total about $9 billion per year, with some studies showing that the figure could double within five years after Russia earns PNTR status.
Some US lawmakers have balked at granting normal trading relations to Moscow, amid concern over its support for Syrian President Bashar al-Assad.
But Secretary of State Hillary Clinton in an op-ed in the Wall Street Journal insisted “extending permanent normal trading relations isn’t a gift to Russia.”
“It is a smart, strategic investment in one of the fastest growing markets for US goods and services. It’s also an investment in the more open and prosperous Russia that we want to see develop,” Clinton wrote.
As a WTO member Russia would have to adhere to an enforceable mechanism for resolving disputes, set predictable rates and ensure transparency, she argued.
Although the US administration was under “no illusions” about the challenges ahead, “it is in our long-term strategic interest to collaborate with Russia in areas where our interests overlap,” Clinton said.
US business groups also support the lifting of Jackson-Vanik, as Russian WTO membership will allow US companies to take advantage of additional market access, greater intellectual property enforcement and lower Russian agriculture subsidies.