Boosting exports and jobs via trade with Russia
The Senate Finance Committee gets to work Wednesday on legislation to grant Permanent Normal Trade Relations to Russia (PNTR), with U.S. exports and jobs at stake.
Chairman Max Baucus (D-MT) announced Wednesday's mark-up session at the same time he released his version of the legislation. From his release:
“Increasing our exports to Russia will help create new jobs and give America’s economy the shot in the arm it needs. Our exports to Russia will double within the next five years if we pass PNTR soon, which will mean thousands of jobs supported or created across the country. And this economic boost will come at no cost to us whatsoever. We will not have to change one single tariff or trade law,” Baucus said. “Russia is joining the WTO no matter what Congress does – their legislature has already voted and put the wheels in motion – so we need to act soon. My bill will put American businesses, farmers, ranchers and workers in a position to succeed and grow, and that’s exactly what our economy and workers need.”
Ranking Member Orin Hatch (R-UT) issued a statement praising Chairman Baucus' new language in the bill. Excerpt:
Together, we’ve produced a consensus bill that will allow American job-creators, workers, farmers and ranchers to take full advantage of Russia’s entrance into the World Trade Organization, while effectively addressing my concerns with Russian barriers to U.S. exports, corruption, and poor support of the rule of law. Not only is this how PNTR for Russia will succeed, but more importantly it is the right thing to do.
And now is the right time. Russia is expected to join the WTO by the end of August, and unless Congress approves PNTR, the United States will not be able to take advantage of the lowered tariffs and improved market access that accompanies Russia's membership. In addition, postponing final passage until after the election would give other countries a head start on contracts and sales.
The Finance Committee's release pointed out the big dollars involved: "Annual U.S. exports to Russia currently total $9 billion per year, and they would double within five years if Congress passes PNTR. Russia is already the world’s seventh-largest economy, and it could surpass Germany and Japan by 2040, meaning the long-run gains of increased exports there would be even greater." Given demographic reality, that last projection might be overselling Russia's future, but in any case, the country is a major market.
Elsewhere, David Thomas, BRT's vice president who handles trade, used a blog post in Milwaukee's BizTimes.com to put the PNTR issue in a Wisconsin context.
Wisconsin has good trade ties with Russia and has the potential to strengthen those ties if Congress passes Russia PNTR. According to a state fact sheet prepared by Business Roundtable last year, Wisconsin exported $208 million worth of goods to Russia, directly supporting an estimated 680 jobs in the state. The state's goods exports cross many industry sectors: Machinery, computers and electronics, food products, transportation equipment and chemicals.
Yet the competition is already tough, and it's bound to get tougher without approval of PNTR. Congress' failure to pass PNTR legislation would make it harder for companies in Wisconsin and the United States to compete in Russia against companies from other countries, many of whom export more to Russia today than the United States does.
Webb Brown, President and CEO of the Montana Chamber of Commerce, offered a few Big Sky observations in a Billings Gazette op-ed, as well: "Last year, Montana exported $1.8 million in merchandise there. In 2010, we exported $6 million worth of cattle alone to Russia."
- Reuters, " U.S. Trade Bill Gets Bipartisan Support"
- Chicago Tribune, "First-term House Republicans urge action on Russia trade"
- The Hill (blog), "Concerns over human-rights record leave Russia trade bill stalled in House