White House Pushes for Russia Trade Agreement

WASHINGTON—The Obama administration on Wednesday began a public push for Congress to permanently lower trade barriers with Russia, arguing the move would benefit U.S. exporters and aid a crack down on trading violations by Moscow.

U.S. Trade Representative Ron Kirk told lawmakers on the House Ways Means Committee that permanently granting Russia “most favored nation” status would enable the U.S. to challenge anti-competitive practices by the country, and ensure that U.S. exporters are on level footing with foreign competitors in tapping the Russian market.

“We have been very plain,” Mr. Kirk said at a congressional hearing on the administration’s trade priorities. “This is something collaboratively we need to achieve.”

But the White House likely faces a tough slog in getting the Russia measure through the House and Senate later this year, with lawmaker expressing concern over Moscow’s positions on Syria and Iran and its own internal political situation.

“I think there’ll be a lot of resistance in Congress to normalizing trading relations with Russia given their actions in Syria and Iran,” said Sen. Lindsey Graham (R., S.C.), a leading voice on foreign policy for the Republican party.

Democrats in the House and Senate agreed.

“I don’t think there’s a real sentiment to pass a trade agreement [with Russia] this year,” said Sen. Sherrod Brown (D., Ohio).

Rep. Sander Levin (D., Mich.), the top Democrat on the ways means panel, cited Russia’s actions over the deteriorating situation in Syria and fears of vote fraud in Russia’s March 4 presidential election as complicating factors for a Russia trade vote to pass in Congress.

Russia blocked an attempt earlier this month by the U.N. Security Council to take actions against the brutal crackdown on protestors by the Syrian regime. Meanwhile, Vladimir Putin is expected to easily win election as president in the weekend poll, although the results will be closely watched for evidence of manipulation by his government.

Russian officials have said the country won’t honor WTO commitments with the U.S. if Congress doesn’t repeal the trade restrictions. Officials at the Russian Embassy in Washington weren’t immediately available for comment.

Rep. Dan Burton (R., Ind.), chairman of the House subcommittee on Europe and Eurasia, predicted the Russia measure will nonetheless pass Congress. “If you’re saying we ought to be doing business with China, how can you say we shouldn’t be doing business with a huge emerging market like Russia,” Mr. Burton said.

Russia is set to join the World Trade Organization by August, and will be required to lower its tariffs by as much as 50% for other countries in the trade organization. The U.S. must in turn repeal a decades-old trade measure preventing Russia from benefitting from lower tariffs on its U.S. exports, or American exporters won’t benefit from Russia’s new WTO membership.

Several leadership aides this week said there hadn’t been any discussions yet about how the Russia matter might be handled in Congress.

Senate Finance Chairman Max Baucus (D., Mont.), who just returned from Moscow, called it a “no-brainer” that Congress would permanently normalize relations with Russia. Rep. Dave Camp (R., Mich.), the chairman of the Ways Means Committee said at Wednesday’s hearing that he was looking to “the administration to build confidence and provide leadership on the economic and non-economic issues.”

One senior House GOP leadership aide said the Obama administration was quietly urging business groups to press the issue with members of Congress. Frank Vargo, vice president for international economic affairs at the National Association of Manufacturing, said that effort was underway.

“Russia is coming into the WTO with or without us,” Mr. Vargo said. “We need to convince lawmakers that this is not a vote for Russia.”

Human rights groups meanwhile are working to ensure that the focus is on more than just the trade with Russia.

“We are active in trying to get support for a new and more effective legislative instrument in dealing with human rights in Russia,” said Tom Malinowski, Washington director for Human Rights Watch. “It may be a vote about trade, but it will feel like a referendum on the kind of country that Russia is.”

Write to Corey Boles at corey.boles@dowjones.com

Leave a comment