Senators Max Baucus (D-Mont.), John Kerry (D-Mass.), John McCain (R-Ariz.) and John Thune (R-S.D.) introduced a bill Tuesday that will move Russia from the Jackson-Vanik Amendment to the Trade Act of 1974, allowing the U.S. to establish permanent normal trade relations with Russia.
The move will ensure that the U.S. can take advantage of trade opportunities with Russia, which will expand when Russia formally joins the World Trade Organization, most likely this summer.
According to the American Soybean Association, Russia is a leading export market for U.S. soy and other goods, importing more than $770 million in agricultural products last year.
"Today's announcement is an exciting one for farmers," said American Soybean Association President Steve Wellman. "As Russia's economy and purchasing power grows, Russian demand for soy products, poultry, pork, dairy and eggs grows as well, and that’s great news for American soybean farmers.”
The addition of Russia to the WTO will require the country to bind its agricultural tariffs, making agricultural trade more predictable and add export opportunities. Establishment of PNTR will allow the U.S. to trade with Russia under a most-favored-nation status.
American Farm Bureau Federation President Bob Stallman said PNTR with Russia is a "critical step" to ensure the U.S. remains competitive in the Russian market.
“U.S. farmers will have more certain and predictable market access as a result of Russia’s commitment not to raise tariffs on any products above the negotiated rates and to apply international food safety standards in a uniform and transparent manner,” Stallman said.
Association of Equipment Manufacturers President Dennis Slater also identified many benefits to the proposed legislation.
"Swift and bipartisan action will greatly benefit U.S. manufacturers by allowing them to compete globally on a level playing field and increase business with Russia. It is vital that U.S. workers and manufacturers have the same opportunities as other countries to benefit from normal trade relations with the world's 11th largest economy," he said.
The Jackson-Vanik Amendment, which the proposed legislation moves to repeal, was put in place in 1974 in response to Soviet Union emigration concerns. Since the collapse of the Soviet Union, Russia has been found to be in compliance with the amendment, leading to the consideration of repeal.