By Merle David Kellerhals Jr.
IIP Staff Writer
September 10, 2012
Secretary of State Hillary Rodham Clinton praised Russia’s accession to the World Trade Organization (WTO), saying it was good for Russia, the United States and the global trading system.
“Three successive U.S. administrations worked steadily to advance Russia’s WTO aspirations,” Clinton said in remarks at the Asia-Pacific Economic Cooperation meeting in Vladivostok, Russia, September 8. “We strongly support the basic bargain at the heart of the WTO: Nations that uphold internationally recognized norms — not just on tariffs but subsidies, procurement preferences, intellectual property rights and so on — these nations get to enjoy the benefits of open markets and free trade.”
Clinton said the World Bank estimates that if Russia effectively implements its WTO commitments, it could increase its gross domestic product by approximately 3 percent in the medium term, and by as much as 11 percent over the long term.
“So it pays to join the rules-based global trading system. And Russia’s trading partners stand to benefit as well,” Clinton said. “We believe American exports to Russia could double or even triple.”
Clinton also told APEC leaders that the Obama administration is working closely with the U.S. Congress to terminate the application of the Jackson-Vanik Amendment to the Trade Act of 1974 and grant Russia Permanent Normalized Trade Relations (PNTR). “We hope that the Congress will pass on this important piece of legislation this month,” she said.
According to a July Congressional Research Service report by international trade and finance specialist William Cooper, unconditional most-favored-nation status, or permanent normal trade relations status, is a fundamental principle of the WTO. Under this principle, WTO members are required to treat imports of goods and services from any WTO member no less favorably than they treat the imports of similar goods and services from any other member country.
But under the Jackson-Vanik Amendment, most communist or nonmarket-economy countries were denied that status unless they fulfilled certain freedom-of-emigration conditions or were granted a presidential waiver of the conditions subject to congressional disapproval.
The statute still applies to many of these countries, even though most have replaced their communist governments. The majority of these countries have joined the WTO or are candidates for accession, Cooper said.
Congress is expected to vote this year on extending PNTR to Russia and Moldova, Cooper said. On July 18, the U.S. Senate Finance Committee reported out legislation granting that status to both nations, and on July 26 the House Ways and Means Committee reported out similar legislation.
Deputy Secretary of State William Burns told the U.S. Chamber of Commerce in Washington September 6 that Congress must approve PNTR status to Russia for the United States to benefit from trade opportunities in one of the largest and fastest growing markets in the world.
“A vote to extend PNTR is not a favor to Russia. PNTR legislation has attracted bipartisan support in both chambers of Congress and from leaders of states across the country,” Burns said. “Continuing to deny PNTR for Russia at this stage only hurts American companies and workers, who are facing fierce economic cooperation.”
Russia has the seventh largest economy in the world, but it is only the 20th largest trading partner to the United States, Burns told the business executives. For many U.S. states, though, exports to Russia are growing faster than exports to the rest of the world.
In April U.S. goods exports to Russia reached $1 billion, a new record.