Baucus Bill Would Repeal Jackson-Vanik, Give Russia PNTR
A group of lawmakers unveiled legislation that would establish permanent normal trade relations (PNTR) with Russia and repeal the Jackson-Vanik amendment "to enable American businesses to pursue new job-creating export opportunities in Russia when it joins the World Trade Organization (WTO) this summer," said a Senate Finance Committee press release. The legislation was introduced by Senate Finance Committee Chairman Max Baucus (D-Mont.), International Trade Subcommittee Ranking Member John Thune (R-S.D.), Foreign Relations Committee Chairman John Kerry (D-Mass.) and Armed Services Committee Ranking Member John McCain (R-Ariz.). Text of the bill is (here).
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The Jackson-Vanik amendment was passed in 1974 in an effort to restrict trade with Communist countries.
The legislation completes steps which are required for American businesses to capitalize on the new market access in Russia, the release said. "Establishing PNTR will provide a boost to the U.S. economy, doubling American exports to Russia in just five years and helping create jobs across every economic sector -- services, manufacturing and agriculture included."
“This is an opportunity to double our exports to Russia and create thousands of jobs across every sector of the U.S. economy, all at no cost to the U.S. whatsoever. We give up nothing as part of this process -- not one single tariff reduction -- so it’s truly a one-sided benefit for the U.S.,” Baucus said. “Jackson-Vanik served its purpose during the Cold War, but it’s a relic of another era that now stands in the way of our farmers, ranchers and businesses pursuing opportunities to grow and create jobs. We owe it to American workers and businesses to enable them to take advantage of the doors opening in Russia. This bill will give our businesses and workers the level playing field they need to succeed against foreign competition. The clock is ticking for us to move, so we need to act now.”
McCain also voiced support for the measure, though he said PNTR and Jackson-Vanik "must be accompanied by passage of the Magnitsky Act (S.1039)." He said he appreciates "Senator Baucus’s written commitment that he will work for Senate passage of both of these pieces of legislation as soon as possible this year"
Baucus also sent a letter to a group of Senators, who previously voiced support for PNTR for Russia, explaining his support for PNTR and the repeal of Jackson-Vanik and intent to support the Magnitsky Act. The letter is (here).
Russia is expected to join the WTO formally this summer and will lower tariffs and increase market access for foreign businesses from countries that have permanent normal trade relations with it, said the release. Congress must pass legislation establishing PNTR by the time Russia joins the WTO for the United States to enjoy the full economic benefits, it said. U.S. exports to Russia currently total $9 billion per year, and one recent study predicted that number would double within a half-decade following PNTR. Russia is already the world’s sixth-largest economy, and it could outgrow Germany and Japan by 2040, meaning the long-run gains of increased exports there would be even greater, said the release.
(See ITT's Online Archives 12030814 for summary of the USTR's efforts to get rid of Jackson-Vanik. See 12060509 for summary of recent comments from an aide to Sen. Harry Reid (D-Nev.) saying legislation toward PNTR for Russia was expected soon.)