Keep up with the news by installing RT’s extension for . Never miss a story with this clean and simple app that delivers the latest headlines to you.

 

US may soon scrap Cold War trade restrictions on Russia

Published time: November 11, 2012 09:12
Edited time: November 11, 2012 13:15
 A general view of the Congress at the US Capitol in Washington, DC. (AFP Photo / Tim Sloan)

A general view of the Congress at the US Capitol in Washington, DC. (AFP Photo / Tim Sloan)

The US Congress may soon end Cold War-era trade sanctions by voting to give companies greater access to Russia’s developing market. Republican leaders had previously blocked the issue from going to a vote, despite Russia’s accession into the WTO.

The House Rules Committee is set to meet on Tuesday to discuss the establishment of “permanent normal trade relations” with Russia, paving the way for a vote at the end of this week.

The removal of the outmoded restrictions on Russian trade, introduced almost 40 years ago, has been strongly advocated by business groups. However, lawmakers were reticent to push the matter in the run-up to the US elections.

The restrictions have become little more than a formality in US-Russian trade, given that they have been consistently waived for the last 23 years.

Previously, house Republicans had prevented the legislation from passing. Former GOP presidential candidate Mitt Romney went as far as branding Russia as America's “number-one geopolitical foe.”

"For nearly 80 days now, all of the other 155 members of the WTO have been able to fully access Russia's market liberalizations, including new rules related to services, science-based animal and plant health, and intellectual property protection – but U.S. businesses cannot," a spokesperson for a group of 500 companies and business organizations said. The companies met on Thursday to urge Congress to push the bill through.

If approved by Congress, the bill must be passed by the US Senate before it can be signed into law by President Obama.

The legislation itself would require no concessions on the part of the US, and would significantly increase trade between the US and the Russian Federation.

To appease opposition who view the new measures as too 'pro-Russian,' the bill will be combined with legislation that stipulates penalties on Russian officials embroiled in rights violations connected to deceased lawyer Sergey Magnitsky.

The case of Sergey Matinsky hit world headlines when he died in police custody following reports of abuse and torture by prison guards during his detention.

The Russian government argues that the case has nothing to do with trade relations, and should not be a consideration in negotiations.

It is estimated that current exports of goods and services from the US to Russia are worth around $11 billion. The Obama administration predicted that number could potentially double over the next five years if trade conditions are normalized.

­

The abolishment of the Jackson-Vanick amendment

In order for US companies to gain greater access to Russian markets, Washington would have to scrap the 1974 'Jackson-Vanik' amendment.

The Cold War measure put trade sanctions in place against the Soviet Union for restricting emigration. The amendment was believed to be mainly in response to the Soviet Union’s ‘diploma taxes,’ which targeted Jews attempting to leave the country.

The trade restrictions imposed by the Jackson-Vanik amendment have been waived every year since 1989, but their existence remains a bone of contention in US-Russian trade policy.

Moscow has expressed concern at the recent stagnation in trade conditions with the US. Deputy Foreign Minister Sergei Ryabkov said in a Friday interview with Russian publication Public Post that Moscow was “worried about the absence of normal, serious, sound economic relations with the US.” Citing a need for renewed trade and investment, Ryabkov called for the repeal of the Jackson-Vanik amendment.

Comments

Add comment

Authorization required for adding comments

Register or

Name

Password

Show password

Register

or Register

Request a new password

Send

or Register

To complete a registration check
your Email:

OK

or Register

A password has been sent to your email address

Edit profile

X

Name

New password

Retype new password

Current password

Save

Cancel

Follow us

Follow us