Mar.Senate Finance Committee Examines Benefits of PNTR
The Senate Finance Committee held a hearing this morning to discuss the benefits of PNTR. In his opening statement, Chairman Max Baucus reiterated his support for repealing Jackson-Vanik and granting Russia PNTR.
“Russia PNTR is a one-sided agreement that benefits American workers and businesses and requires them to give up nothing in return. Unlike a free trade agreement, the United States will not further open its market to Russia. We will not lower any of our tariffs or make any other changes to our trade laws … U.S. service providers will gain access to Russia’s telecommunications, banking and other key markets,” he stressed.
“And the United States will get new tools for our toolbox to hold Russia accountable to its obligations. These include binding legal enforcement and transparency measures,” he added.
Sen. Jon Kyl said granting PNTR to Russia “isn’t a slam dunk … Let’s stipulate that American businesses, farmers, and ranchers should be able to sell products to Russia, and that free trade is important and beneficial to the United States. We still need to determine whether America is getting a good deal through Russia’s WTO accession, and whether more should be done to protect our interests.”
He added that “the Administration is also missing the point on the repeal of Jackson-Vanik, which ties most-favored nation status to freedom of emigration.”
Kyl also compared the Russian trade relationship with that of China. “Yes, we would have access to a WTO dispute settlement process if we grant Russia PNTR. But what has that gotten us in our trade relationship with China?” he asked. He concluded that “it is simply unreasonable to believe that PNTR can be extended to Russia without a more thorough examination of the issues.”
Witness Testimony
The Committee heard from witnesses representing business, agriculture, intellectual property, and humanitarian interests. Ronald Pollett, President & CEO, GE Russia & CIS, emphasized that “Russia will join the WTO, but the U.S. will not get any of the advantages if it does not grant PNTR to Russia. American companies and their workers will be at a competitive disadvantage relative to our global competitors, who will enjoy the benefits of Russia’s commitments.”
He added that though “the bilateral agreement between the U.S. and Russia provides for the mutual extension of most favored nation benefits, the U.S. would have no recourse to WTO dispute settlement should disputes arise and could also face a more challenging trade environment.”
Alan Larson, Chairman of the Board, Transparency International USA, called on Congress to extend PNTR status to Russia “right away.” He noted that Russia is a member of essential economic policy forums such as the Group of Twenty (G-20) and the Group of Eight (G-8) and the trust on which good relations between Russia and the United States are premised will be reinforced when the United States extends PNTR to Russia.”
Larson also advocated restarting BIT negotiations with Russia, stating that “the most important investment disciplines are included in bilateral investment treaties.”
Like Pollett, Larson also touted the ability of U.S. firms to use dispute resolution mechanisms upon Russia being granted PNTR.
Question and Answer
During the question and answer session, Baucus asked witnesses to enumerate the benefits of PNTR. Pollett said granting Russia PNTR offers options to “push back” in trade disputes. This would serve as a dramatic improvement to the current environment. Larson argued that PNTR is “a plus” and adds a degree of discipline in trade relations that can be viewed as a positive step.
Sen. Kyl added that “none of us object to Russia acceding to the WTO, but how do you negotiate the best situation with a country that has dragged its feet.” Witnesses acknowledged there are and still will be humanitarian and transparency issues in Russia despite PNTR, but characterized the agreement as a piece to the trade puzzle rather than an overall solution.
Sen. John Kerry offered strong support for granting Russia PNTR. While other Senators argued that the U.S. retained leverage by not granting PNTR to Russia, Kerry said these positions were “not on point.” He said he was concerned about the negative impact to U.S. businesses operating in Russia and noted that the current bilateral agreement with Russia only applies to exports and goods. Kerry said PNTR is vital as the largest gains from granting PNTR will be in the services sector.
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The Senate Finance Committee held a hearing this morning to discuss the benefits of PNTR. In his opening statement, Chairman Max Baucus reiterated his support for repealing Jackson-Vanik and granting Russia PNTR.
“Russia PNTR is a one-sided agreement that benefits American workers and businesses and requires them to give up nothing in return. Unlike a free trade agreement, the United States will not further open its market to Russia. We will not lower any of our tariffs or make any other changes to our trade laws … U.S. service providers will gain access to Russia’s telecommunications, banking and other key markets,” he stressed.
“And the United States will get new tools for our toolbox to hold Russia accountable to its obligations. These include binding legal enforcement and transparency measures,” he added.
Sen. Jon Kyl said granting PNTR to Russia “isn’t a slam dunk … Let’s stipulate that American businesses, farmers, and ranchers should be able to sell products to Russia, and that free trade is important and beneficial to the United States. We still need to determine whether America is getting a good deal through Russia’s WTO accession, and whether more should be done to protect our interests.”
He added that “the Administration is also missing the point on the repeal of Jackson-Vanik, which ties most-favored nation status to freedom of emigration.”
Kyl also compared the Russian trade relationship with that of China. “Yes, we would have access to a WTO dispute settlement process if we grant Russia PNTR. But what has that gotten us in our trade relationship with China?” he asked. He concluded that “it is simply unreasonable to believe that PNTR can be extended to Russia without a more thorough examination of the issues.”
Witness Testimony
The Committee heard from witnesses representing business, agriculture, intellectual property, and humanitarian interests. Ronald Pollett, President & CEO, GE Russia & CIS, emphasized that “Russia will join the WTO, but the U.S. will not get any of the advantages if it does not grant PNTR to Russia. American companies and their workers will be at a competitive disadvantage relative to our global competitors, who will enjoy the benefits of Russia’s commitments.”
He added that though “the bilateral agreement between the U.S. and Russia provides for the mutual extension of most favored nation benefits, the U.S. would have no recourse to WTO dispute settlement should disputes arise and could also face a more challenging trade environment.”
Alan Larson, Chairman of the Board, Transparency International USA, called on Congress to extend PNTR status to Russia “right away.” He noted that Russia is a member of essential economic policy forums such as the Group of Twenty (G-20) and the Group of Eight (G-8) and the trust on which good relations between Russia and the United States are premised will be reinforced when the United States extends PNTR to Russia.”
Larson also advocated restarting BIT negotiations with Russia, stating that “the most important investment disciplines are included in bilateral investment treaties.”
Like Pollett, Larson also touted the ability of U.S. firms to use dispute resolution mechanisms upon Russia being granted PNTR.
Question and Answer
During the question and answer session, Baucus asked witnesses to enumerate the benefits of PNTR. Pollett said granting Russia PNTR offers options to “push back” in trade disputes. This would serve as a dramatic improvement to the current environment. Larson argued that PNTR is “a plus” and adds a degree of discipline in trade relations that can be viewed as a positive step.
Sen. Kyl added that “none of us object to Russia acceding to the WTO, but how do you negotiate the best situation with a country that has dragged its feet.” Witnesses acknowledged there are and still will be humanitarian and transparency issues in Russia despite PNTR, but characterized the agreement as a piece to the trade puzzle rather than an overall solution.
Sen. John Kerry offered strong support for granting Russia PNTR. While other Senators argued that the U.S. retained leverage by not granting PNTR to Russia, Kerry said these positions were “not on point.” He said he was concerned about the negative impact to U.S. businesses operating in Russia and noted that the current bilateral agreement with Russia only applies to exports and goods. Kerry said PNTR is vital as the largest gains from granting PNTR will be in the services sector.