With the economic recovery still weak, it’s hard to believe the United States is about to undermine a $10 billion export market. We now have a rare chance to increase exports to a major market thanks to Russia’s accession to the World Trade Organization, product of almost 20 years of negotiation.
The United States risks not benefitting because we have not moved with the times. Despite immense changes in Moscow in the last couple decades, Washington has not granted Permanent Normal Trade Relations (PNTR) to Russia because of the 1974 Jackson-Vanik amendment required the Soviet Union to allow its politically persecuted Jewish community to freely emigrate.
In a more rational world, PNTR should be an easy decision. Unfortunately, things are rarely that straight-forward – and PNTR might be held up until 2013, resulting in major lost opportunities for U.S. companies, farmers and workers.
The economic arguments in favor are compelling. Russia has the world’s 11th largest economy and more than 140 million consumers. The President’s Export Council estimates that U.S. exports could double once Russia joins the WTO – if the United States implements PNTR. Potential benefits spread across the economy. Russia is the fourth largest export market for U.S. poultry, fifth for beef and sixth for pork. With tariff reductions and new disciplines on technical trade measures, there is great growth potential. Other sectors gaining include aircraft, machinery and services. Without PNTR, American workers and business could lose billions in business to competing countries.
There are other strong non-economic arguments in favor of PNTR.
Jackson-Vanik undermines American credibility by punishing a country that no longer exists and for policies that ended decades ago. There are no more refuseniks. More than a million Jews have left since 1991. This is why every President has waived Jackson-Vanik rules for Russia since the fall of the Soviet Union.
By keeping this obsolete law in place, America is sending all the wrong messages to Russians about our willingness to make rational decisions. The refusal to grant PNTR undermines our position inside Russia by strengthening those opposed to engagement with the West and feeds anti-Americanism. The contrast is particularly glaring considering that the United States granted PNTR to Beijing 12 years ago.
One of the most important misconceptions about PNTR is that it’s a gift to Russian strongman and occasional U.S. basher Vladimir Putin. This is not true because Russia’s accession is basically a done deal and barring some highly unexpected event, President Putin will lead Moscow into the WTO. Trying somehow to punish him now will mostly hurt America. In the end, granting PNTR is no more a favor for Putin than giving it to China was for Jiang Zemin.
Bringing Russia into the trading system provides a boost to Russia’s political and economic development. WTO will help integrate Russia into the rules-based trading system and could advance rule of law. It will bring international standards and practices into the Russian economy and kick-start the reform process. It could reduce the dominance of natural resource extraction and state-owned enterprises.
These changes could strengthen themiddle class, often a key to improved human rights and democratic practices. While the relationship between economic and political reform is not always strong, pushing back against Russia will not help either. This is why Russia’s most prominent opposition leaders have called for an end to Jackson-Vanik. Led by anti-corruption blogger Alexei Navalny, they have said, “We, leading figures of the Russian political opposition, strongly stand behind efforts to remove Russia from the provisions of the Jackson-Vanik Amendment. Jackson-Vanik is not helpful in any way — neither for promotion of human rights and democracy in Russia, nor for the economic interests of its people.”
Finally, PNTR should not be seen as election year favor to Barack Obama. Supporting Russia’s WTO accession has been a goal of both Democratic and Republican administrations. While the 2012 campaign season will make PNTR passage difficult, this issue has strong bipartisan appeal. It creates jobs for American workers, helps our businesses, boosts job-creating exports, and enhances our diplomatic credibility. PNTR is the right thing to do for both the American and Russian people.
