Iowa delegation supports normal trade relations with Russia

More than 20 years after the USSR collapsed, Congress has finally repealed the 1974 Jackson-Vanik amendment limiting trade with the Soviet Union and its successor states. The Russia and Moldova Jackson-Vanik Repeal Act of 2012 grants Russian permanent normal trade relations status. It passed the U.S. House by 365 votes to 43 last month and passed the Senate by 92 votes to 4 yesterday.

All seven Iowans in Congress voted for this bill, which should increase food and agriculture-related exports to Russia. The Obama administration and several business advocacy groups also supported the measure.

After the jump I’ve enclosed statements on this bill from Representative Steve King and Senator Chuck Grassley.

Statement from Representative Steve King, November 16 (emphasis in original):

King Votes to Expand Iowa Trade Opportunities in Russia and Moldova

Washington, DC- Congressman Steve King released the following statement after voting to grant Russia and Moldova permanent normal trade relations (PNTR). H.R. 6156, the Russia and Moldova Jackson-Vanik Repeal Act, will allow the United States to benefit from Russia and Moldova’s recent admittance to the World Trade Organization (WTO). Russia officially joined the WTO on August 22, 2012, and Moldova joined 2001. As a condition of joining the WTO, both countries have agreed to reduce their trade barriers, enforce intellectual property rights, and abide by international trade mediation. By officially removing an outdated legal barrier, H.R. 6156 will allow the United States, and Iowa in particular, to begin taking advantage of increased trade and export opportunities in Russia and Moldova.  The legislation also contains provisions intended to address human rights concerns in Russia due to the death of whistleblower Sergei Maginsky in 2009.

“U.S. exports to Russia could double or triple within five years as it reduces its tariffs and trade barriers on goods and services,” said King. The vote I cast today was necessary to open up trade opportunities for Iowa companies and ensure that the United States can take full advantage of Russia’s and Moldova’s membership in the WTO. Farmers and businesses in Iowa and across the country will benefit from the improved trade relations with Russia. This bill was carefully crafted not just to expand economic opportunities here in America, but also to promote the Rule of Law and human rights in Russia, and I hope it receives quick passage in the Senate and is signed into law.”

Statement from Senator Chuck Grassley, December 6:

Grassley Votes for Bipartisan Trade Bill to Expand Export Opportunities to Russia, Moldova

WASHINGTON – Senator Chuck Grassley said the 92 to 4 Senate vote today for bipartisan legislation to grant permanent normal trade relations – PNTR status – to Russia and Moldova is a step forward, though he urged the Administration to increase and intensify efforts to lower Russian barriers to U.S. agricultural products including beef, pork and poultry.

Grassley has been outspoken about the need for the U.S. government to address Russia’s unscientific barriers to agricultural products from the United States.

“The U.S. Trade Representative and the U.S. Department of Agriculture need to keep the pressure on Russia to eliminate safety standards not supported by sound science,” Grassley said.  “Important opportunities have been missed, including Russia’s accession to the World Trade Organization and passage of PNTR.  American farmers deserve to be treated fairly by our international trading partners, and trade officials from the Administration need to advocate for them as much as possible going forward.”

Agricultural trade between the United States and Russia is significant.  The two-way trade was valued at roughly $1.5 billion in fiscal year 2012, with American farm exports accounting for 97 percent of the total.  Last year, U.S. beef, pork and poultry exports collectively ranked second only to aircraft engines in total U.S. export value to Russia.

The text of a letter sent last month from Grassley and other senators to the U.S. Department of Agriculture is available here.  A June letter to President Barack Obama from Grassley and 33 other senators on Russian barriers to U.S. agricultural products is available here.

The House of Representatives passed PNTR legislation for Russia and Moldova in November.  Below is the text of a statement made by Grassley earlier today.

Floor Statement of U.S. Senator Chuck Grassley

Thursday, December 6, 2012

Mr. President,

In this day and age there simply is no denying it; ours is a global economy.  Gone are the days when businesses relied solely on growing their customer base within our own borders.  Ninety-five percent of the world’s consumers live outside the United States.

One of the things that will help our economy improve at a faster rate would be to increase trade opportunities overseas for American businesses and farmers.  Increased trade helps create jobs, increase incomes, and expand opportunities for innovation.  And as we’ve seen over the course of history, free and fair trade helps all boats rise.  That is to say, countries willing to lower their trade barriers and allow fair and competitive trade will see growth in their own economies.

However, history also shows even among nations with good relations, trade disputes will arise.  That is why we need a forum to settle international disputes such as the World Trade Organization.  The WTO allows American businesses a place to take complaints against unfair trade barriers.

For 19 years Russia has worked towards entry into the WTO.  Now they are in the WTO, and I support Russia being in the WTO.  As the world’s eleventh largest economy with over 140 million citizens, it’s obviously an important market for U.S. businesses and farmers looking to expand overseas markets.

Some of Iowa’s heavy equipment manufacturers are already exporting millions of dollars of equipment to Russia.  Agricultural equipment manufactured in facilities all around Iowa is being used by Russian farmers as they look to increase their agricultural efficiency and productivity.  The WTO accession process afforded us an opportunity to address Russian tariffs.  In the accession agreement, Russia has agreed to lower its tariffs for these construction and agricultural equipment products.  This means increased exports and potentially more American jobs.

By far the largest percentage of Iowa exports to Russia consists of grain, meat, and other agricultural products being produced by Iowa farmers.  Russia’s accession into the WTO has been an important issue for pork producers, cattlemen, and row-crop farmers.  Iowa farmers are some of the best in the world; they are truly helping to feed the world.  Expanding opportunities in overseas markets is vital to the future of American agriculture.

Russia has been, and will continue to be an important market for our farmers, but it doesn’t come without its challenges.  Russia has repeatedly raised barriers to U.S. imports based upon restrictions not supported by sound science.  Let’s take pork exports as an example.  In 2008, U.S. pork sales to Russia totaled over 200,000 metric tons, but since that time, exports have fallen nearly 60 percent due to Russia’s reduced import quota and questionable sanitary and phytosanitary, also referred to as SPS, restrictions.

I’m pleased our trade negotiators were able to negotiate a satisfactory tariff rate quota for pork.  But the Obama administration has fallen short in its obligation to stand with U.S. farmers on SPS standards.  I have communicated time and again what was expected of this administration.  In June of 2011, I led a bi-partisan letter with Senator Nelson of Nebraska and 26 other Senators, to Ambassador Kirk requesting his negotiators follow the steps we have taken during consideration of past WTO accessions.  When China and Vietnam joined the WTO we used those opportunities to obtain firm SPS commitments from those countries that went beyond the WTO SPS agreements.  In particular, we obtained further commitments in the area of meat inspection equivalence.  In addition, in June of this year I sent another bi-partisan letter with Senator Nelson and 32 of our Senate colleagues to President Obama, again laying out our request that he stand up for American farmers and demand more of the Russian government on SPS issues.

As we know, this administration didn’t use the accession process to fully address these crucial issues.  That’s why I requested language be put into this bill to require our trade negotiators keep working on these unfair trade barriers and report to Congress on their progress.  Our farmers are some of the very best in the world; we cannot allow their products to be discriminated against based on arbitrary and unjustifiable reasons.

In addition to the concerns I have repeatedly raised on SPS issues, there are other issues at stake with Russia.  It’s a shame we are handling this bill in the lame duck session when time is so limited.  This bill should have been debated at a time when the Senate could more fully evaluate the current course of our relationship with Russia.  Russia continues to cause challenges in regards to Syria, Iran, and other regions of the world where the U.S. and our allies are trying to do what’s right in the name of human dignity and national security.  I am concerned with Russia’s own human rights issues, and I support the Magnitsky provisions in this legislation.

As Ranking Member on the Senate Judiciary Committee, I remain troubled by the lack of progress Russia has made on protecting intellectual property.  Furthermore, Russian officials need to step up their efforts in combating cyber crimes.  There continues to be a large number of cyber attacks that originate from within Russia’s borders.

All that being said, I realize having Russia in the WTO is a positive step.  One of the goals of international trade is to build upon the relationship between nations.  Having Russia in the WTO fold will hopefully benefit our nations as we work together on so many issues that concern us both.  Plus, as I stated earlier, having the WTO forum available will help our businesses and farmers when disputes arise.

I will be voting in favor of this bill.  But I want to be crystal clear; this administration needs to do a better job of looking out for U.S. businesses and farmers.  I look forward to hearing from our trade negotiators in the not too distant future on their progress in getting Russia to remove the unjustifiable barriers to our agriculture products.

Furthermore, as President Obama looks towards other trade initiatives in the future, let this accession process be a lesson.  This process could have been better.  The President has called on Congress to pass this legislation for some time.  But his lack of consultation with Congress and disregard for concerns raised by myself and other members have only served to delay this whole process.  We can’t keep approaching trade issues in this fashion.  This administration needs to have real and substantive consultations with Congress.  Furthermore, when there are opportunities to stand up for American businesses and farmers against unfair trade barriers, such as SPS issues in Russia, the President needs to seize those opportunities.

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