US moves closer to Russia trade bill

Financial Times

The US Congress is set to take a big step towards approving normal trade relations with Russia, brushing off geopolitical tensions to deliver a victory for large US exporters such as Caterpillar and General Electric.

The Ways and Means committee of the House of Representatives is expected to vote on a bill, probably on Thursday, that would allow US companies to reap the benefits from Russia’s looming accession to the World Trade Organisation. The so-called Magnitsky bill – which seeks to punish Russian officials for human rights abuses – will be attached to the legislation.

With both Republican and Democratic leaders on the panel endorsing the package, it should pass comfortably. This would bolster the chances of it being enacted before the August congressional recess – as its supporters are hoping for – though it may not happen until September or later in the year.

“The prospects have improved dramatically”, said Ron Pollett, chief executive of GE Russia, who was in Washington last week to lobby for the bill. “It’s a question of when, not if.”
The bill would unwind the Jackson-Vanik amendment, a Cold War relic that barred trade with the Soviet Union for restricting Jewish emigration. Its provisions have routinely been waived, but its presence has continued to sour US economic relations with Russia.

However, both in the House and the Senate, US lawmakers were planning to attach the Magnitsky bill, designed to punish officials responsible for human rights abuses around the world by denying visas and freezing their assets. While this has raised ire in Russia, it was the only way that Congress would move forward with the Permanent Normal Trade Relations legislation.

Russia has reacted angrily to the Magnitsky bill – named after a crusading anti-corruption lawyer who died in a Moscow jail. It has pledged to respond in kind by adopting its own list of US officials alleged to have been involved in human rights abuses, barring them from Russia.

It also emerged on Tuesday that Russia was keeping secret the names of 12 prosecutors overseeing an attempt to prosecute Magnitsky posthumously for alleged corporate tax evasion, in an attempt to keep them off the US Magnitsky list. Magnitsky’s mother has launched legal action attempting to force the authorities to disclose the names.

The White House – and many in the business community – would have preferred a “clean” bill without the Magnitsky attachment, but were nonetheless happy that progress was being made. “We applaud their action,” said Ron Kirk, after the Ways and Means committee unveiled the legislation last week. “More exports to Russia will mean more American jobs here at home,” he added.

The momentum in favour of the legislation comes at a time of trouble in the diplomatic relationship between the US and Russia, particularly over policy towards Syria and Iran.
But advocates for the trade deal argued that the security tensions should be treated separately, and granting Russia PNTR status worked only to the advantage of the US.
Mr Pollett said: “It’s not a gift to Russia, it’s not a carrot to Russia, it’s about supporting US jobs.” If PNTR does not pass, Mr Pollett said “it only hurts US companies” since they won’t be able to take advantage of protections on standards and intellectual property under WTO, and European and Asian competitors will make the case to Russians that the US does not want to “deal” with them.

The US has just a 5 per cent market share of some $300bn in annual Russian imports, compared with 43 per cent for the EU and 26 per cent for Asia, and many US businesses – particularly in the industrial sector – see that as underperformance.

Mr Pollett suggested more aggressive commercial diplomacy from the US would be helpful. “Our competitors partner with the highest levels of their governments to make sales,” he said. “We need to be fighting on all fronts to win deals for US business and workers.” payday loan микрозайм онлайн https://zp-pdl.com/online-payday-loans-cash-advances.php zp-pdl.com buy over the counter medicines