Business & Lobbying

Business groups worry that Congress will leave Russia trade bill hanging

Business groups supporting Russian trade legislation are increasingly worried Congress will leave for its five-week recess before completing the measure. 

If Congress does leave before removing Russia from the terms of the 37-year-old Jackson-Vanik law, U.S. exporters will be the ones that suffer, the groups say. 

{mosads}Russia in August is expected to join the World Trade Organization (WTO), a move that requires the United States to repeal Jackson-Vanik, a U.S. law originally aimed at encouraging the emigration of Russian Jews with the threat of higher tariffs on Russian products. 

If the United States does not lift Russia from Jackson-Vanik, the world’s sixth-largest economy will be able to raise tariffs on U.S. goods under the WTO’s rules.

“This is a mess and it is why the USA Engage and the National Foreign Trade Council are urging this Congress and this president to get their act together right now and enact Russia PNTR [permanent normal trade relations],” Dan O’Flaherty, NFTC’s vice president, wrote in a Monday blog post. 

“Otherwise, American companies will not have the advantages that our negotiators have spent 19 years gaining for them in the Russian market,” he wrote. 

House and Senate committees have both approved legislation to graduate Russia from Jackson-Vanik, but they disagree over a human-rights bill that has become the price for moving the Russia trade legislation. 

Panels in both chambers have approved legislation that would punish Russian officials involved in the death of whistleblower Sergei Magnitsky, a lawyer who died in prison after reporting government corruption. Both bills would allow visas to be revoked and would place sanctions on those found to have been involved in Magnitsky’s death. 

The difference is that the Senate bill is broader and could be applied to human-rights violators outside of Russia.

So far, neither chamber has added the Russian trade bill or the Magnitsky bill to its schedule for the week, and there were no updates on negotiations to move forward on Monday, congressional aides said. 

If a compromise is not found this week, business groups worry action could be delayed until a lame-duck session. Lawmakers are pressed for time this week and would have only eight legislative days in September to pass a bill. 

“This puts it over to a lame-duck session, when all hell may be breaking loose over sequestration and the debt ceiling, among other undone things,” O’Flaherty wrote. 

“And if not lame duck, then it’s next year when we will have a new Congress and possibly a new president and we will have to start all over again — as commercial opportunities in Russia are increasingly taken by our European and Asian competitors,” he concluded.

Business groups have argued that the only losers are U.S. businesses that will be put at a competitive disadvantage. 

“We continue to press Congress to pass Russia PNTR this week so that, starting next month when Russia joins the WTO, the United States can compete in Russia on the same terms as our foreign competitors,” said David Thomas, vice president for trade for the Business Roundtable. 

Republicans including Speaker John Boehner (Ohio) have faulted the Obama administration for a lack of engagement on the issue. The administration supports moving the trade bill but, fearing a diplomatic fight, has opposed the Magnitsky legislation, which is fiercely opposed by Russia. 

Rep. Joseph Crowley (D-N.Y.) suggested Monday that Republicans might be “slow-rolling” the Russia bill so as not to give President Obama a victory. 

U.S. Trade Representative Ron Kirk told the U.S.-Russia Business Council last week that failing to pass a measure “could jeopardize well-paying jobs here at home.”

Bernie Becker contributed to this report.

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