On Aug. 22 Russia will end its status as the largest economy in the world not yet in the World Trade Organization, opening its markets to a wide variety of increased international trade opportunities.
There’s only one problem for businesses in the United States. Unless Congress passes permanent normal trade relations (PNTR) with Russia, American firms will be forced to sit idly by while competitors around the world take full advantage of lower Russian tariffs and reduced market barriers.
Russia is the world’s 11th largest economy, but only our nation’s 31st largest export market. The good news is that U.S. exports to Russia could significantly increase when Russia joins the WTO. As part of its WTO accession, Russia will reduce more than one-third of its tariffs immediately and will continue to decrease numerous tariffs during the next three years. In addition, it will enhance intellectual property protections, improve food safety standards, open service markets and increase market access for many industries. Unlike a free trade agreement negotiation, the U.S. would not be required to give any new access to our own markets in exchange for these benefits.
This issue should be of great interest to Washington businesses, because Russia is one of our fastest growing trade partners. From 2010 to 2011, Washington exports to Russia grew approximately 80 percent, compared to a 16 percent growth in overall state exports. PNTR with Russia will increase this trend exponentially, benefitting a wide variety of Washington industries. For example, commercial airplane tariffs will be cut in half, and service companies will have significantly increased access to – and protections in – this market.
In particular, permanent normal trade relations with Russia could greatly advantage Washington farmers and ranchers. Russia imported more than $32 billion of agricultural goods in 2011, and is the world’s third largest importer of meat and poultry products. And WTO membership will require Russia to abide by science-based animal and plant health standards that can be enforced through binding dispute settlement proceedings.
Yet Congress did not act on this legislation before leaving on recess. While we must continue efforts to ensure that Russia abides by international standards of democracy and civil society, delaying PNTR with Russia is actually counterproductive. The U.S. ambassador to Russia has testified that prominent opposition figures in Russia are calling on the U.S. to take this step, because strengthened U.S.-Russian economic ties would facilitate the improvements that they seek.
At its core, congressional approval of PNTR with Russia is a matter of basic international competitiveness. And for a state like Washington, with an economy so strongly engaged in trade, it has the potential to significantly increase jobs and economic opportunities for a multitude of our state’s residents.
The Washington Council on International Trade and the Washington Farm Bureau are helping to lead the charge on behalf of Washington businesses on this key trade issue, and we’re working with our Congressional delegation to build support for its passage. We urge you to join us by contacting your elected officials to share your support for permanent normal trade relations with Russia.
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