The administration is seeking repeal of 1970s legislation but many in Congress oppose the move By Peter A. Buxbaum, AJOT In his most recent State of the Union address, President Obama declared that “Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia.” The Russians are now seeking admission into the World Trade Organization, having signed all the necessary documents toward the end of last year. Russia’s accession to the WTO would allow U.S. exporters to reap the benefits of reduced tariffs on exports to Russia, a country of 145 million people and the seventh largest economy in the world. By one estimate, U.S. exports to Russia could double within five years from the current level of $9 billion. Russia is expected to gain admission to the WTO this summer. But there is a legislative impediment to permanent normal trade relations with Russia. The 1974 Jackson-Vanik amendment adopted by Congress imposed restrictions on U.S. trade with Russia following the Soviet Union’s policy of preventing free Jewish immigration. The Obama administration is now pushing for the repeal of Jackson-Vanik, arguing that the conditions that prompted its original passage no longer exist. Repeal would help U.S. exporters including companies like Caterpillar, Boeing and United Technologies. However, the administration is encountering some opposition in Congress, mostly, but not exclusively, from Republicans. Some of the opposition is purely political but the naysayers also point to other issues—including human rights violations, the failure to protect intellectual property rights, and trade preferences in favor of Russian car manufacturers—to justify the continuation of Jackson-Vanik. Congress voted against repeal last year. Robert Hormats, Under Secretary for Economic, Energy and Agricultural Affairs, laid out the administration’s case in testimony before the Senate banking committee last month. “Russia’s WTO accession was a key step in putting our relations with Russia on a more constructive course, which is one of President Obama’s top priorities,” he said. “Integrating Russia into the WTO has the potential to bring enormous benefits to U.S. manufacturers, farmers, and ranchers. While American exports to Russia rose 39 percent in 2011, more than twice as fast as our goods exports to the world as a whole, our exports to Russia, $8.2 billion in 2011, represents only around one-half of one percent of our total exports. “To improve opportunities for U.S. companies in Russia going forward and support jobs here in the United States,” Hormats continued, “we will need to secure the full benefits of the WTO deal for American business by terminating application of the Jackson-Vanik Amendment to Russia, and by extending permanent normal trade relations to Russia. Jackson-Vanik long ago fulfilled its intended purpose.” Sen. Max Baucus (D-Mont.), chairman of the Senate finance committee, voted against repeal last year but this year, with Russia about to be admitted to the WTO, he has changed his tune. “Repealing Jackson-Vanik and passing permanent normal trade relations with Russia gives us access to the Russian market without giving up anything in return,” Baucus said, in a statement. “It benefits the U.S. and our businesses by providing jobs and economic growth here at home, all at no cost to us, and repealing Jackson-Vanik will open Russia to U.S. companies and promote competition, openness and transparency. It’s a no-brainer.” By Baucus’ estimate, U.S. exports to Russia will double within five years of Russia joining the WTO, from the current level of around $9 billion per year, if Congress establishes permanent normal trade relations. U.S. industry is also getting into the act with the formation of the Coalition for U.S.-Russia Trade, comprising businesses from a wide range of industries. The coalition is calling for the repeal of Jackson-Vanik before Russia’s expected entry into the WTO this summer