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Pro: U.S. businesses and workers need full access to Russia's surging economy

Posted: May 18, 2012 - 12:08am

WASHINGTON — In a welcome development for American workers, farmers and companies, Russia is poised to join the World Trade Organization in July.

Russia is the largest economy in the world that has yet to join the WTO, and doing so will require Moscow to further open its market, safeguard intellectual property and investments, and strengthen the rule of law.

The result will be more U.S. exports and American jobs. U.S. companies see huge potential in Russia, which boasts the 11th largest economy in the world and 4 percent economic growth. Of the top 15 U.S. trading partners, Russia was the market where U.S. companies enjoyed the fastest export growth last year — a robust 38 percent.

However, there’s a catch. While Congress does not vote on Russia’s accession to the WTO, the United States won’t get the full benefits of these market-opening reforms unless Congress approves a short and simple bill granting Permanent Normal Trade Relations and graduating Russia from the Jackson-Vanik amendment.

The 1974 Jackson-Vanik amendment was crafted to press the Soviet Union to allow the emigration of Soviet Jews and prisoners of conscience.

Where Russia is concerned, Jackson-Vanik has fully accomplished its objective. After the collapse of the Soviet Union, Russia established freedom of emigration for all citizens. Since 1992, U.S. presidents of both parties have issued annual certifications of Russia’s full compliance with the Jackson-Vanik amendment.

But the amendment continues to impact U.S.-Russia trade. It’s a common mistake to think Jackson-Vanik gives the United States leverage over Russia.

The opposite is true — keeping Jackson-Vanik on the books gives Russia leverage over the America. It allows Moscow to deny the benefits of those market-opening reforms to American workers, farmers and companies — and with the WTO’s blessing.

Failure to approve PNTR and graduate Russia from Jackson-Vanik will put the United States at a unique disadvantage. Meanwhile, European and Asian companies will build on their already significant head start in tapping the growing Russian market.

Russia has more than 140 million consumers and a growing middle class. The World Bank forecasts that WTO accession will increase Russian GDP by 11 percent over the long haul as greater openness and competition in the marketplace drive growth.

The President’s Export Council estimates that U.S. exports of goods and services to Russia — which, according to estimates, topped $11 billion in 2011 — could double or triple once Russia joins the WTO.

Business opportunities in Russia are expected to grow substantially after Russia finalizes its accession to the WTO.

For instance, the total cost of needed infrastructure spending over the next five years is conservatively estimated at $500 billion, according to the American Chamber of Commerce in Russia. Private-sector participation in this building boom could offer significant opportunities for U.S. companies.

Russia’s accession to the WTO has been a bipartisan American foreign policy goal for many years — spanning Democratic and Republican administrations over 18 years of negotiation. The goal of bringing Russia into the global rules-based trading system is finally within reach.

The only question now is whether U.S. companies, workers and farmers will reap the benefits. The answer rests with Congress, which must act this summer to approve PNTR and graduate Russia from the Jackson-Vanik amendment.

As U.S. economic growth sputters, and with millions of Americans unemployed, we must not be hamstringed in foreign markets.

Opening up Russian trade must be the first step in an ambitious American trade agenda. We need to complete the Trans-Pacific Partnership Agreement to get access to Asia’s booming markets and begin talks on a new Trans-Atlantic Economic and Trade Pact with the EU, our largest commercial partner.

We must pursue new trade deals with emerging nations around the globe. We have the opportunity to put the world’s buying power to work in our economy — let’s seize it.

• Donohue is the president and CEO of the U.S. Chamber of Commerce.

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