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Obama grants Russia 'permanent normal trade relations'

Source: Thomson Reuters Foundation - Thu, 20 Dec 2012 17:14 GMT
Author: Reuters
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* U.S. human rights measure strains ties with Russia

* Action clears way for U.S., Russia to establish WTO ties

* Potential disputes looming on US-Russia steel, meat trade

By Doug Palmer

WASHINGTON, Dec 20 (Reuters) - President Barack Obama on Thursday formally granted "permanent normal trade relations" to Russia, following congressional action that cleared the way for him to remove a Cold War-era vestige on trade but also raised tensions with Moscow.

"The Russian Federation has been found to be in full compliance with the freedom of emigration requirement" under the 1974 Jackson-Vanik amendment, Obama said in a proclamation.

That provision had tied favorable U.S. tariffs rates to the rights of Jews in the former Soviet Union to emigrate freely.

The House of Representatives and the Senate overwhelmingly passed legislation allowing Obama to grant permanent normal trade relations, or PNTR, to Russia in order to ensure that U.S. companies share the full benefits of Russia's recent entry in the World Trade Organization.

But Congress tied the PNTR bill to legislation that punishes Russian human rights violators by barring them from visiting the United States and freezing any assets they have in U.S. banks.

Russian President Vladimir Putin on Thursday harshly criticized the human rights measure, named for Sergei Magnitsky, a Russian anti-corruption lawyer who died in 2009 in a Russian jail.

"This is very bad. This, of course, poisons our relationship," Putin told his annual news conference.

Putin said he backed tit-for-tat legislation approved by Russia's lower house of parliament to prevent Americans from adopting Russian children and bar entry to U.S. citizens accused of abusing Russians' rights.

COMPLAINTS AHEAD?

The chilly atmosphere notwithstanding, Obama's proclamation permits Russia and the United States to establish WTO relations in Geneva. Jackson-Vanik, which was still on the books when Russia joined the WTO in August, had delayed that step.

"We can now move to apply the WTO Agreement between the United States and Russia, giving the United States the benefits of Russia's WTO commitments and the tools to enforce them," U.S. Trade Representative Ron Kirk said in a statement.

Assuming WTO relations are set up quickly, the United States and Russia could file complaints against each other in the coming months.

Earlier in December, Russia banned imports of meat containing any trace of ractopamine, a feed additive widely used in the United States to make meat leaner.

Kirk and U.S. Agriculture Secretary Tom Vilsack have pushed Russia to lift the ban because they say it appears to violate Russia's WTO commitments.

The United Nation's food agency in July said ractopamine "had no impact on human health" if residues stay within recommended levels.

Meanwhile, Edward Verona, president of the U.S.-Russia Business Council, warned in the group's latest newsletter that Russia could file a WTO complaint against U.S. anti-dumping and countervailing duties on Russian steel.

Obama on Thursday also established PNTR for Moldova, a former Soviet republic that joined the WTO in 2001. Congress had neglected to pass authorizing legislation for the past decade, but finally attended to the issue in the Russia PNTR bill.

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