Legislation that is expected to spur U.S. construction-equipment exports to Russia has cleared its final congressional hurdle, as the Senate approved a bill to establish permanent normal trade relations between the two countries.
Senate passage came on Dec. 6, by a strong, bipartisan 92-4 vote.
The measure, which the House had approved on Nov. 16, next goes to the White House for President Obama’s expected signature.
Under PNTR, the U.S. will be able to take advantage of export benefits provided by Russia as a new member of the World Trade Organization. A prime benefit will be sharp reductions in Russian tariffs on construction-equipment shipments from the U.S. Another advantage is WTO’s binding mechanism for settling trade disputes.
The U.S. Commerce Dept. says that Russia is the 11th-largest export market for U.S. construction equipment. It also says that according to the Global Trade Atlas, shipments of such equipment averaged $573 million per year in the 2008-2010 period.
The department says that under PNTR Russian tariffs on U.S. construction equipment will average 5.3%, compared with charges as high as 25% now.
The bill has been a top priority for U.S. business interests, including Caterpillar Inc. and the Association of Equipment Manufacturers.
Bill Lane, director of Caterpillar's Washington office, says, "The potential of the Russian market is enormous. Russia is the world's largest country, by size," and has substantial mineral and energy resources. He adds, "And while it's an important market for companies like Caterpillar, it could be so much more, if Russia was to embrace true reform."
Lane says, "And by joining the WTO, that's exactly what it's started to do....By the Congress providing permanent normal trade status, it means that now American companies will have the ability to ensure that Russia complies with its obligations."
U.S. Chamber of Commerce President and CEO Thomas Donohue said, “This is a rare bill that will create American jobs without costing the taxpayer a dime.”