6/14/2012Advisor Newsletters - AEM Advisor
Following news of the U.S. Senate introduction June 12 of a clean bill to grant Permanent Normal Trade Relations (PNTR) with Russia, AEM issued a statement that day commending the action, saying "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."
In the coming months, Russia will become part of the World Trade Organization (WTO). As such, all member states of the WTO will economically benefit by having most-favored-nation trade status with Russia – except the United States, which is currently prevented from granting Permanent Normal Trade Relations with Russia until Congress repeals the outdated Jackson-Vanik Amendment.
This 1974 Amendment was originally put in place in response to the Soviet Union preventing certain citizens from emigrating. Since 1994, along with the collapse of the Soviet Union, Russia has been found to be in full compliance with the Jackson-Vanik freedom-of-emigration criteria.
Until the amendment is repealed, the U.S. will continue to be prevented from granting Russia PNTR. All other member states in the World Trade Organization will economically benefit by most-favored-nation status immediately upon Russia's entry.
Russia is considered one of the world’s fastest growing economies – expected to see annual average real growth of four percent from 2011 to 2015. U.S. machinery exports to Russia averaged $1.3 billion and accounted for 11 percent of total U.S. industrial goods exports from 2008 to 2010.
AEM President Dennis Slater issued the following statement:
"I commend Senators Max Baucus, John Kerry, John Thune and John McCain on their hard work and bipartisan cooperation to advance efforts to approve PNTR status for 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.
"Currently, the U.S. agriculture and transportation and infrastructure sectors represent hundreds of millions of dollars in exports to Russia, but U.S. exporters pay tariffs applied at rates up to 25 percent. Once Congress repeals the Jackson-Vanik amendment, Russia is committed to reducing or eliminating many of the tariffs on machinery.
"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. I'm pleased to see this bipartisan group of Senators working together to propel job growth and our economy by establishing PNTR with Russia. We look forward to continuing to work with Congress to ensure this legislation passes without delay."
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