Senators, Obama administration aim for compromise on Russia trade

The Hill

Senators and the Obama administration remain at odds over how to proceed on making trade ties permanent with Russia although they are working together on a way forward.

Senate Finance Committee members said Thursday are backing a plan to link legislation repealing Jackson-Vanik, which allow for grant normal permanent normal trade relations (PNTR) with Moscow, with a human rights bill that would punish Russian officials involved with the death of lawyer Sergei Magnitsky, who died in police custody.

Obama administration officials, U.S. Trade Representative Ron Kirk and Deputy Secretary of State William Burns, told the Finance panel on Thursday that they prefer separate tracks for the two measures but will continue to work with lawmakers toward a compromise to pass a measure before the August recess.

Regardless of current differences, lawmakers and Obama administration officials agree that PNTR needs to be granted before Russia joins the World Trade Organziation (WTO) in August.

Burns acknowledged Thursday that there is a “constructive dialogue” continuing with lawmakers and that the administration’s concerns are being considered. He opted to reserve a final opinion on how the administration will react until a bill emerges from the Senate.

House Ways and Means Chairman Dave Camp (R-Mich.), who held a Wednesday hearing, is siding with the Obama administration in pressing for a “clean” PNTR bill.

Support is building on both sides of the Capitol to link the two bills as a way to let Congress express its dissatisfaction with Russia’s record on human rights.

Burns said that while there are serious concerns with the U.S.-Russian relationship, the two nations have “worked effectively” together on a wide range of issues, including nuclear non-proliferation.

“There are no allusions about challenges that lie ahead in an uneasy mix of competition and cooperation,” he said.

“We can’t downplay Russia’s importance, we don’t have that luxury because they will be of strategic importance for many years to come.”

As lawmakers attempt to find a middle ground, the panel’s ranking member Orrin Hatch (R-Utah) emphasized that there is already a commitment to link human rights legislation to PNTR.

“We also know that members on both sides of the aisle have already raised numerous economic and non-economic issues that need to be addressed if this process is to be successful,” he said.

He argued that President Obama expects Congress to “turn a blind eye to the barrage of bad news that demonstrates on a daily basis the deteriorating political, economic and security relationship between the United States and Russia.”

“I cannot discern any consistent principles or values underlying President Obama’s trade strategy or unravel the logic underpinning his flawed approach toward Russia,” he said.

Still, Hatch conceded that PNTR must be passed.

Despite concerns over Russia’s bad behavior — foreign policy challenges in Syria and Georgia, intellectual property treatment and government corruption — lawmakers appear steadfast in their goal of granting PNTR.

“It’s important to bear in mind that this is not just about the Russian government but the evolution of Russian society,” Burns said.

“Extending PNTR is not a magic formula but it’s a long-term investment that is part of what the Russian middle class wants to see and it will help them be a better partner for the United States over time.”

Kirk noted that the administration has “very serious concerns” with Russia’s treatment of U.S. agricultural products and they are continuing to press the Russian government to adopt intellectual property rules that exceed WTO standards.

A week ago, Democrats Baucus and Sen. John Kerry of Massachusetts, along with Republicans John Thune of South Dakota and John McCain of Arizona, have sponsored a bill that would let the administration grant Russia permanent trade ties by nixing the Jackson-Vanik provision, which designed to put pressure on Communist nations for human-rights abuses and emigration policies.

At the same time, Baucus announced that he would back pairing PNTR legislation with the so-called Magnitsky legislation, which would freeze assets and deny U.S. visas to Russian officials linked to human rights abuses.

On Thursday, Thune said Baucus has offered “a reasonable process to move forward” and called for the attachment of a “robust” Magnitsky bill.

Republicans are urging their colleagues to resist a watered-down version of the legislation in negotiations to pass a PNTR bill.

Thune also called on the administration to “engage aggressively” with lawmakers to “forcefully make the case for PNTR between now and the August recess.”

Sen. Ben Cardin (D-Md.), who authored the Magnitsky legislation and is leading the charge for its passage as part of the PNTR measure, said Thursday that linking the measures provides the best chance to pass PNTR.

The concern is that Congress won’t act in time to take advantage of Russia’s membership in the WTO.

Kirk stressed that without granting normal ties there are many negatives that would weigh on U.S. exporters, including a lack of recourse and dispute resolution for infractions by Russia, putting them at a competitive disadvantage.

Russia will vote July 4 on the WTO agreement. It does not provide Moscow with a grace period to implement economic changes.

The U.S. Chamber of Commerce sent a letter on Wednesday to all lawmakers calling in them to pass a bill before August.

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