June 20, 2012 / 4:13 PM / in 6 years

U.S. trade bill "not a gift" to Russia, Kirk says

WASHINGTON (Reuters) - President Barack Obama’s top trade official urged Congress on Wednesday to quickly approve legislation to improve trade ties with Russia, unencumbered by human rights requirements, saying it was vital to keep U.S. exports competitive in the Russian market.

U.S. Trade Representative Ron Kirk speaks at an event at the Singapore Management University April 26, 2012. REUTERS/Tim Chong

“Authorizing the president to provide permanent normal trade relations is not a gift to Russia,” U.S. Trade Representative Ron Kirk said in testimony to the House of Representatives Ways and Means Committee.

U.S. lawmakers have expressed concern about Russian support of the bloody crackdown on the opposition in Syria and many support proposed human rights requirements on Russia.

Congress is under pressure to approve permanent normal trade relations (PNTR) by repealing a Cold War-era trade restriction known as the Jackson-Vanik amendment because of Russia’s entry in the World Trade Organization by August 22 at the latest.

If the Jackson-Vanik provision is not lifted, Russia would be entitled under WTO rules to deny U.S. companies the market-opening benefits it made to join the WTO, Kirk said.

“We could be paying tariffs sometimes double what other countries are paying,” Kirk said.

Kirk also urged Congress to pass a “clean bill that enables us to maintain our competitive edge,” in reference to the desire of many lawmakers to attach human rights legislation that U.S. companies fear could also hurt their exports to Russia.

House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said he also thought “legislation granting Russia PNTR should be clean and targeted, or else the legislation could be unduly complicated and delayed.”

After the hearing, Camp told reporters he wanted the White House to step up efforts to round up support for the bill before he would schedule action on the legislation.

“Having been involved in these issues for a number of years, I know how many tools the administration has in their toolbox to get something done. We need them to reach into that toolbox and use some of those tools to meet with members (of Congress) and engage them on this issue so we can move forward,” Camp said.

Representative Sander Levin, the panel’s top Democrat, said PNTR should not be enacted without approval of the so-called “Magnitsky bill to address human rights violations.”

Congress should also consider “other legislative proposals to strengthen the rule of law in Russia and to protect and make whole U.S. investors that have been harmed by the lack of a rule of law there,” Levin said.

Democrats also want language in the PNTR bill to put pressure on the Obama administration to bring cases against Moscow at the WTO if Russia does not honor its obligations.

China was generally spared any WTO challenges in the first five years after its entry - to the frustration of many lawmakers determined that Russia not be given a similar break.

The Magnitsky bill is named for a 37-year-old anti-corruption lawyer who worked for the equity fund Hermitage Capital in Moscow. His 2009 death after a year in Russian jails spooked investors and blackened Russia’s image abroad.

It would require the United States to deny visas and freeze the assets of Russians linked to Magnitsky’s death, as well as those of other human rights abusers in Russia.

The House Foreign Affairs Committee passed the legislation earlier this month, and its corresponding committee in the Senate is expected to approve it next week.


Russia has warned that approval of the Magnitsky bill would damage relations. But senior U.S. lawmakers have said some version of the Magnitsky legislation would probably have to be passed in conjunction with PNTR.

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, has said he plans to incorporate the Magnitsky bill into the Senate version of PNTR.

The State Department has denied visas to some Russians involved in the Magnitsky case, but many lawmakers would like to see more visa bans and individual sanctions imposed.

Trade relations between the United States and Russia have been governed since 1974 by the Jackson-Vanik amendment. That measure made favorable U.S. tariff rates for Russian products conditional on the rights of Jews and other religious minorities to emigrate freely.

There is wide recognition that emigration is no longer a problem in Russia, but many U.S. lawmakers are loathe to repeal Jackson-Vanik for Russia without replacing it with new legislation to pressure Moscow on human rights.

At the same time, the provision is inconsistent with WTO rules that all members provide each other the same degree of market access on a unconditional basis.

The White House task of persuading Congress to approve permanent normal trade relations (PNTR) is also complicated by Russian support for the Syrian government of Bashar al-Assad.

Levin said it would be particularly hard for lawmakers to vote for the legislation if massacres of civilians continue in Syria. Russia needs to be much more active in bringing a halt to the violence, he and other lawmakers said.

Deputy Secretary of State William Burns told the panel the Obama administration had “serious concerns about democracy and human rights in Russia,” but the time had come to establish PNTR by repealing the Jackson-Vanik provision.

“On Syria, our message to our Russian colleagues has been clear and consistent. Assad’s campaign of terror against his own people is unconscionable,” Burns said.

Burns told the panel he believed refusing to repeal Jackson-Vanik would not give the United States additional leverage over Russia on Syria or human rights, but would hurt U.S. companies.

“Keeping Jackson-Vanik in place for Russia also provides political ammunition for those in Russia who argue the United States is stuck in a Cold War mentality,” Burns said.

The United States has a “very complicated relationship with Russia” that requires it to balance its concerns about human rights and Syria with other objectives, he said.

Reporting by Doug Palmer; Editing by Will Dunham

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