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Monday, August 27, 2012 - Page updated at 11:30 p.m.
Time to give Russia permanent trade status
The entry of Russia into the World Trade Organization, which happened Wednesday, means that Congress must now remove that country from the provisions of the Jackson-Vanik Amendment.
That law, named after the late U.S. Sen. Henry "Scoop" Jackson, D-Wash., and Rep. Charles Vanik, D-Ohio, was passed in 1974 to prod the Soviet Union to allow Jews to emigrate. Under the law, the U.S. government can have normal trade relations with Russia only a year at a time, renewing if Russia allows emigration. Russia does, and its trade status has been extended every year since 1994.
By entering the WTO, Russia has agreed to several things of value to WTO members, including equal treatment of their goods and a cut in tariffs of an average of nearly 6 percentage points. But these benefits are guaranteed only to those WTO members with permanent normal trade relations with Russia. And America's relations are temporary.
This may not be a problem for Boeing, because Russia has been waiving its tariffs on aircraft. Other U.S. companies, such as producers of construction equipment, have less bargaining power.
Bellevue attorney William Robinson, who represents U.S. companies in Russian joint ventures, says, "A lot of companies are hunkering down" until they are sure how Russia's new rules will affect them. Under the WTO agreement, Russia isn't required to discriminate against U.S. products, but it could so long as it doesn't have permanent relations.
If Russia disfavors U.S. products, Robinson says, Northwest and other U.S. businesses "will be tremendously disadvantaged" compared with other WTO countries.
The Obama administration is urging Congress to roll back Jackson-Vanik, and Congress should do so.
Of the two principal bills, H.R. 6156, co-sponsored by Washington state's U.S. Reps. Dave Reichert and Jim McDermott, is the best option. It would simply remove Russia (and Moldova, a former Soviet republic) from the Jackson-Vanik list.
The rival bill, S. 3406, sponsored by Sen. Max Baucus, D-Mont., would additionally allow the United States to seize assets of foreign officials deemed by the secretary of the treasury to have been involved in "gross violations" of human rights anywhere in the world. This is an overbroad grant of power that does not belong in a trade bill.
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