US, Russia leaders urge Congress to provide path to open trade

U.S. and Russian leaders agreed Tuesday that Congress should move forward to grant Russia permanent normal trade relations (PTNR) and repeal the nearly 40-year-old Jackson-Vanik amendment.

President Obama and Russian President Dmitry Medvedev tried to shake off tensions over several foreign policy issues, including Syria and Iran, during meetings that included talks about expanding trade. 

"Obviously, there are always tensions between countries, and that's certainly true given the long history of the Cold War between our two countries," Obama said following meetings in Seoul, South Korea. 

"But what I think we've been able to do is to ensure that rather than look backward, we've been looking forward," he said. 

Congress has started talks about granting PTNR and repealing Jackson-Vanik but some snags are expected as several lawmakers have expressed frustration over Russia's human rights record and the nation's involvement with supplying arms to Syrian leaders, which they say have been used to kill civilians. 

"I would like to especially thank the U.S. President for his huge work and huge support in Russia's accession to the WTO," Medvedev said.

"In my view, that was an extremely important topic, and I hope that we will be able to achieve similar successes in resolving remaining issues, such as the revoke of the Jackson-Vanik amendment," he said. 

Medvedev acknowledged that a lot "remains to be done, of course, in terms of trade and economic relations," he said. 

"We need to bring them to the new level through increasing the volume of trade and raising the general level and pace of cooperation," he said. 

Obama and Medvedev also agreed that changing the trade policies would benefit the U.S. and Russian economies. 

Russia will join the World Trade Organization this summer regardless of whether Congress decides to grant PNTR and repeal Jackson-Vanik, which was used to urge Communist nations to improve human rights and emigration policies. 

"Russia's ascension into the WTO can open up trade and commerce between our two countries that can create jobs and economic growth for both Russians and Americans," Obama said. 

"And as Dmitry mentioned, we think it's going to be very important for us to address Jackson-Vanik so that American businesses can fully take advantage of an open and liberalized Russian market," he said. 

"On the international front, we agreed that, as two of the world’s leading powers, it’s absolutely critical that we communicate effectively and coordinate effectively in responding to a wide range of situations that threaten world peace and security," he said. 

A bilateral presidential commission headed Foreign Minister Sergey Lavrov and Secretary of State Hillary Clinton will be working actively around a number of the trade and commercial issues, not only with respect to WTO but "how we can more vigorously expand the kind of investment and the kind of cooperation on the economic front that can benefit both Russia and the United States," Obama said. 

As part of the accession process Russia is required to lower tariffs, increase market access for foreign businesses and improve protections for intellectual property, while the U.S. doesn't need to make any changes. 

Senate Finance Chairman Max Baucus (D-Mont.) has said his panel will probably wait until the summer to move forward. 

Baucus has said that delaying action beyond that time won't provide the United States with any leverage over Russia on Syria or a host of other issues concerning lawmakers. 

"If the United States does not grant PNTR, that does not hurt Russia one wit," Baucus said at a recent hearing. 

"It hurts the United States dramatically," he said. 

The Coalition for U.S.-Russia Trade, which also backs the changes, said there is much more room for growth for U.S. exporters because of Russia’s growing demand for high-quality goods and services.

While Russia imported $310 billion in goods in 2011, the United States accounted for only 4 percent of those imports.  

Russia is expected to need thousands of commercial airplanes, services such as telecommunications, financial and express delivery along with growing demand in retail food and beverage sales, which are expected to increase in real terms from just over $200 billion in 2010 to more than $240 billion by 2014.