Senate panel approves trade relations with Russia

WASHINGTON — The Senate Finance Committee on Wednesday approved a Russia trade bill that could lead to a doubling of U.S. exports and complicate already-frosty relations with Moscow over human rights and other issues.

The vote was unanimous to lift Cold War trade restrictions and establish permanent normal trade relations with Russia while imposing new sanctions on Russian human rights violators. In the background were strong objections to Russia’s poor human rights record, its threats against U.S. missile defenses in Europe, its failure to protect intellectual property rights, its discrimination against U.S. agricultural products and most recently its support for the Assad government in Syria.

Enacting permanent trade status is necessary if U.S. businesses are to benefit from the lowering of trade barriers that will take place when Russia enters the World Trade Organization next month.

Finance Committee Chairman Max Baucus, D-Mont., said current U.S. exports to Russia, about $9 billion a year, could double in five years if trade relations are normalized.

“There is no time to waste. America risks being left behind,” Baucus said. “If we miss that deadline, American farmers, ranchers, workers and businesses will lose out to the other 154 members of the WTO that already have PNTR (permanent normal trade relations) with Russia.” U.S. imports from Russia last year were four times the export level.

Getting the trade bill through Congress has been a top priority for business and farm groups, which see it as a jobs creator and a boost to the economy. But it has struggled to gain momentum because of poor relations between the two countries.

“It is with some trepidation that we undertake this task,” said Sen. Orrin Hatch of Utah, top Republican on the committee. “Despite President Obama’s reset policy, U.S.-Russian relations remain rocky at best.”

The bill only advanced to a committee vote after Baucus agreed to link it to legislation, pushed by Sens. Ben Cardin, D-Md., and Jon Kyl, R-Ariz., that imposes sanctions such as visa denials and asset freezes on Russian government officials involved in human rights violations. The legislation, which has sparked strong criticism from Russian officials, specifically targets those involved in the case of Sergey Magnitsky, a lawyer who died in a Russian jail in 2009 after allegedly being subject to torture.

Sen. John Cornyn, R-Texas, proposed an amendment stating that the legislation would not go into effect until the president certifies that Russia is no longer supplying arms to Syria. “If it’s important to vindicate the rights of a single person,” he said, referring to Magnitsky, “how much more compelling is it” to ensure that Russian arms aren’t being used to kill thousands of Syrian civilians. It was defeated, with opponents saying withholding permanent trade status would only hurt U.S. businesses, not Russia.

How to proceed with the trade issue has divided both parties. Last month Hatch and seven other Finance Committee members sent Baucus a letter listing the many troubling aspects of U.S.-Russia relations and questioning whether Russia would comply with WTO findings when disputes arise. But earlier this week 73 House Republican freshmen wrote President Barack Obama saying that “we will only hurt ourselves and lose out on economic opportunities and needed jobs” if full trade relations with Russia are not established.

It’s a “Hobson’s choice,” said Sen. Mike Crapo, R-Idaho, at Wednesday’s committee meeting. By moving to help U.S. exporters Congress was put in the situation of rewarding the bad behavior of the Moscow government, he said.

While adding the Magnitsky provision to the bill, the measure eliminates another human rights act that has been the main stumbling block to permanent normal trade relations.

The bill repeals the 1974 Jackson-Vanik act that tied trade with the then-Soviet Union to Moscow’s allowing Jews and other minorities to leave the country. While Jackson-Vanik has long outlived its purpose, it has remained on the books, a mark of the continued difficult relations between the two countries.

It appears unlikely that Congress can act on the trade bill before Russia formally enters the WTO. Congress has only two more weeks before it takes off for its August recess, time likely to be taken up by election-related tax and spending bills.

On the House side, Ways and Means Committee Chairman Dave Camp, R-Mich., has said he is committed to introducing a Russia trade bill, and the committee is now in negotiations with the White House on finding a Democratic co-sponsor to assure its smooth progress through the House.

The bill also establishes permanent normal trade relations with Moldova. Baucus said the former Soviet republic, which joined the WTO in 2001, is the only WTO member that does not have permanent trade status with the United States.