U.S.-Russia Trade Bill On Fast Track to Passage
Trade legislation that is expected to boost U.S. exports to Russia, including shipments of construction equipment, is moving swiftly toward passage in Congress.
The Senate Finance Committee on July 18 unanimously cleared a bill to establish permanent normal trade relations (PNTR) with Russia. That move would make the U.S. eligible for Russian tariff cuts and other benefits when Russia joins the World Trade Organization (WTO). The bill, which has provisions to improve Russia's human-rights record, next goes to the Senate floor.
Action is heating up in the House, too. Ways and Means Committee leaders on July 19 introduced a bill similar to the version the Senate Finance Committee approved. Ways and Means Chairman Dave Camp (R-Mich.) planned a committee vote on the measure in late July.
Senate Finance Chairman Max Baucus (D-Mont.) notes that 154 other WTO member countries have PNTR with Russia and would gain from that country's accession to the trade group. Nick Yaksich, Association of Equipment Manufacturers (AEM) vice president for global public policy, says, "We do not need to be shut out while the [Russian] market is opened to the rest of the world."
Russia, the world's seventh-largest economy, is rich in natural resources. It is the 11th-largest market for U.S. construction equipment exports, which averaged $573 million a year in the 2008-2010 period, says the Commerce Dept., citing Global Trade Atlas data. U.S. equipment makers hope the PNTR bill's passage will boost those sales.
Bill Lane, Caterpillar Inc.'s Washington, D.C., director, says, "By having Russia in the WTO, it means we've got a commitment to liberalize trade and safeguards to make sure Russia actually makes good on their WTO promises."
After Russia fully honors its WTO commitments, its heavy-equipment tariffs are expected to drop. For example, Russian tariffs on large off-road trucks would fall to 5% from 15% now, says Lane.
Supporters of the bill want to see Congress approve it by the start of the August recess. If the bill is enacted soon after, it would put PNTR in place by Aug. 22, when Russia joins the WTO.
