Keeping a Close Eye on Russia

Rep. Adrian Smith

America’s relationship with Russia is complex. Russia is currently the world’s ninth largest economy and growing. In 2011 alone, Nebraska exported $154 million worth of goods to Russia, which directly supported an estimated 560 jobs here at home. However, I and many others remain concerned regarding Russia’s recent behavior and trading policies.
Among other concerns, Russia is currently abusing sanitary and phytosanitary (SPS) requirements by basing new measures on unscientific food safety concerns to reduce imports of American meat and poultry. This practice violates internationally established science-based standards, and puts Nebraska producers at a disadvantage in the Russian market.
Russia will join the World Trade Organization (WTO) later this summer, giving the United States new opportunities to hold Russia responsible for its trading policies and to promote our exports abroad. The WTO provides a forum to facilitate the easing of international trade barriers, and enforces trade standards and requirements among its 155 member nations.
The House of Representatives soon will consider bipartisan legislation to grant permanent normal trade relations (PNTR) with Russia, which is required for the U.S. to take advantage of the benefits and enforcement mechanisms of Russia’s WTO membership. The bill, which is supported by a diverse coalition of agriculture groups and business organizations, contains provisions to address concerns about Russia’s compliance with its WTO obligations, and address bilateral trade issues with the United States.
Importantly for Nebraska beef and pork producers, the bill would require the United States Trade Representative (USTR) to negotiate a bilateral sanitary and phytosanitary equivalency agreement with Russia, and to annually report on whether Russia’s WTO commitments are fully implemented. USTR would also be required to submit an action plan to address the problems if they are not fulfilling their obligations. These safeguards would ensure the United States maintains a watchful eye on Russia’s progress, and Russia is held accountable if it fails to live up to internationally recognized science-based rules.
Failing to pass PNTR would put American and Nebraska exporters at a distinct disadvantage in this market once Russia joins the WTO. For example, Russia imported $16.5 million in irrigation equipment from Nebraska in 2011. We hope this figure will continue to increase; however, if Congress does not grant Russia PNTR, U.S. manufacturers of agriculture equipment will not enjoy many of the protections and market access provisions which their global competitors in China and Europe will.
Russia’s WTO entry requires it to reduce top tariffs on irrigation equipment in half from 10 to 5 percent. In addition, Russia will be required to open its services market which will allow engineers to accompany the irrigation systems to Russia to set up the equipment. Finally, the United States will have access to WTO dispute settlement mechanisms, to ensure Russia’s compliance with the WTO trade rules.
While I and many others remain concerned regarding Russia’s recent behavior, PNTR combined with the safeguards and requirements included in this legislation would provide a means to engage Russia and encourage it to reform. Further, passing this legislation and extending normal trading relations to one of the world’s largest economies has the potential to benefit Nebraska’s exporters and improve relations between our two countries.
Similar legislation already has passed the Senate Finance Committee. The House Committee on Ways and Means, on which I serve, recently completed a markup of this bipartisan bill. As the legislation moves toward House passage, I will continue to work to improve our complex relationship with Russia and seek new trade opportunities for Nebraska goods and products.

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