Trade With Russia Is a Win-Win
Secretary of State
Later this summer, Russia will join the World Trade Organization (WTO) in the culmination of a process that began nearly two decades ago. This is good news for American companies and workers, because it will improve our access to one of the world's fastest-growing markets and support new jobs here at home.
U.S.-Russian bilateral trade isn't reaching anything close to its full potential today. While that trade has increased over the past few years, America's exports to Russia still represent less than 1% of our global exports. Given the potential for expanding these links, Russia's WTO membership will be a net benefit for our economy.
But there is one obstacle standing in the way. American businesses won't be able to take advantage of this new market opening unless Congress terminates the application of the Jackson-Vanik Amendment and extends "permanent normal trading relations" (PNTR) to Russia.
Jackson-Vanik, which restricts U.S. trade with countries that limit their people's emigration rights, was adopted by Congress in the early 1970s to help thousands of Jews leave the Soviet Union. It long ago achieved this historic purpose.
Now it's time to set it aside. Four decades after the adoption of this amendment, a vote to extend permanent normal trading relations to Russia will be a vote to create jobs in America. Until then, Russia's markets will open and our competitors will benefit, but U.S. companies will be disadvantaged.
Extending permanent normal trading relations isn't a gift to Russia. It is a smart, strategic investment in one of the fastest growing markets for U.S. goods and services. It's also an investment in the more open and prosperous Russia that we want to see develop.
As the demonstrations across Russia over the past six months make clear, the country's middle class is demanding a more transparent and accountable government, a more modern political system, and a diversified economy. We should support these Russian efforts.
When Russia joins the WTO, it will be required—for the first time ever—to establish predictable tariff rates, ensure transparency in the publication and enactment of laws, and adhere to an enforceable mechanism for resolving disputes. If we extend permanent normal trading relations to Russia, we'll be able to use the WTO's tools to hold it accountable for meeting these obligations.
The Obama administration is under no illusions about the challenges that lie ahead. WTO membership alone will not suddenly create the kind of change being sought by the Russian people. But it is in our long-term strategic interest to collaborate with Russia in areas where our interests overlap.
Already our work together over the past three years has produced real results, including the New Start Treaty to reduce strategic nuclear weapons, an agreement on civilian nuclear cooperation, military transit arrangements to support our efforts in Afghanistan, and cooperation on Iran sanctions. With permanent normal trading relations, we would add expanded trade to the list.
To be sure, we have real differences with Russia. We disagree fundamentally about the situation in Georgia. On Syria, we are urging Russia to push Bashar al-Assad to implement former U.N. Secretary-General Kofi Annan's six-point plan, end the violence, and work with the international community in promoting a transition.
In addition, President Obama and I have clearly expressed our serious concerns about human rights in Russia. And we have taken steps to address these challenges, including support for programs that promote human rights, rule of law, and civil society there. We have strengthened ties between nongovernmental organizations in both countries, from political activists to groups working for women's rights. Following the tragic death of Sergei Magnitsky, a lawyer who blew the whistle on official corruption, we imposed restrictions to ensure that no one implicated in this crime can travel to the United States. We are continuing to work with Congress on addressing these issues.
Some argue that continuing to apply Jackson-Vanik to Russia would give us some leverage in these areas of disagreement. We disagree—and so do leaders of Russia's political opposition. They have called on the U.S. to terminate Jackson-Vanik, despite their concerns about human rights and the Magnitsky case. In fact, retaining Jackson-Vanik only fuels more anti-American sentiment in Russia.
Russia's membership in the WTO will soon be a fact of life. Failing to extend permanent normal trading relations will not penalize Russia, nor will it provide a lever with which to change Moscow's behavior. It will only hurt American workers and American companies. By extending those trading relations, we can create new markets for our people and support the political and economic changes that Russia's people are demanding. These reforms will ultimately make Russia a more just and open society as well as a better partner over the long term for the U.S.