The Multilateralist

Is Congress about to trip up trade relations with Russia?

Cory Welt has a thoughtful piece here on the U.S. Congress’ approach to human rights in Russia, and the implications for trade relations with the newly commissioned member of the World Trade Organization: At the end of 2011, Russia was invited to join the [WTO], a decision that the United States fully supported. The Russian ...

Cory Welt has a thoughtful piece here on the U.S. Congress’ approach to human rights in Russia, and the implications for trade relations with the newly commissioned member of the World Trade Organization:

At the end of 2011, Russia was invited to join the [WTO], a decision that the United States fully supported. The Russian parliament will ratify Russia’s membership by this summer, after which Russia will become the latest member of the organization. A recent report by the Petersen Institute for International Economics estimates that Russia’s entry into the organization could lead to a doubling in value of U.S. exports to Russia over just the next few years (from $11 billion in 2011 to $22 billion in 2017). Benefits include lower tariffs on imported U.S. goods to Russia, protection of intellectual property, and arbitration of trade disputes.

If the United States does not grant Russia permanent normal trade relations status, then the conditions of Russia’s accession to the organization, many of which were negotiated by the United States, need not apply to U.S.-Russian trade (Russia has already said it will not apply them). U.S. businesses will sit on the sidelines while Russia’s other trading partners benefit. The United States will also have no access to mechanisms for the arbitration of trade disputes….

The Magnitsky Act was introduced by Sen. Benjamin Cardin (D-MD), the co-chairman of the U.S. Helsinki Commission (which monitors human rights and international cooperation in 56 countries), and co-sponsored by nearly a third of Senate members, including 13 more Democrats, 18 Republicans, and one independent. Similar legislation has been twice introduced in the House of Representatives with equally impressive bipartisan support. Many of its supporters want to make Russia’s normal trade status contingent on passage of the Magnitsky Act.

Last week, a key Congressional player chided the Obama administration for not more assertively pushing a normalization of trade relations with Russia:

“It’s time for the White House to get out front on this issue,” Representative Dave Camp of Michigan, head of the House Ways and Means Committee, said today in a Washington speech.

The U.S. would gain a powerful new enforcement tool by giving Russia improved status, Camp said, as it plans this year to join the World Trade Organization, an international arbiter of disputes among governments.

In order for U.S. companies to pay lower tariffs on trade with Russia, Congress must alter the so-called Jackson-Vanik amendment to 1974 trade law, which restricted trade with the former Soviet Union. Camp’s panel plans a hearing in June, giving President Barack Obama’s administration several weeks to push for improved status, he said.

But the administration faces a devilish political dilemma. It made getting Russia into the WTO a top priority, but it will be loathe to publicly oppose Congressional human rights action, particularly with the Romney camp having identified Russia as America’s top "geopolitical foe." Writing in the World Politics Review, Daragh McDowell predicts a gloomy outcome:

[I]f and when the Magnitsky bill passes, Obama will have to sign it. To do otherwise would be electoral suicide. Similarly, Putin and the Russian elite will have to respond in kind. To do otherwise risks their continued authority, which for many members of the Russian elite could amount to actual suicide. So before either the White House or the Kremlin has a chance to negotiate the contours of their relationship in the 21st century, a major roadblock will have been placed in the way of positive collaboration…

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