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The Monitor's View

Trade as the next stage in the US 'reset' with Russia

In his trip to Moscow, Vice President Biden emphasized trade and commerce as the next stage in the 'reset' of relations between the United States and Russia. He's on the right track.

By the Monitor's Editorial Board / March 11, 2011

In his visit to Moscow this week, Vice President Joseph Biden said that expanded trade and commerce is the “next frontier” in the Obama administration’s two-year-old attempt to reset relations with Russia. He’s pointing in the right direction, but don’t expect a smooth ride.

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On the trade front, it is quite possible that Russia will make a giant leap this year. It may well be allowed to join the World Trade Organization (WTO), the global body that sets the rules for its 153-member countries. Russia is the last significant economy to remain outside the group.

Its entry could be blocked if even one member state objects. Only Georgia, which Russia temporarily invaded in 2008, might exercise its veto. It has before. Even so, both of these former Soviet states and territorial rivals are negotiating over a possible agreement to pave the way for Russia’s accession.

For its part, the Obama administration strongly backs Russia’s entry this year. The two countries are mostly done with the required bilateral agreement (so far, it totals at least 850 pages). But even if Russia crosses the WTO threshold, the United States may not be able to take advantage of a lowering of trade barriers with Russia.

That’s because of a 1974 law passed by Congress, known as the Jackson-Vanick amendment. The law denied the then-Soviet Union “most favored nation” trading status in order to push the Kremlin into allowing more Jewish immigration. The Obama administration is urging Congress to repeal the law and grant Russia normal trade ties.

The cold-war circumstances of Jackson-Vanick no longer exist, but some lawmakers – Democrats and Republicans – view the law as leverage to press for a variety of changes in Russia, be they in its relations with Georgia, on human rights, or on economic reforms. That became quite clear when US Trade Representative Ron Kirk testified before the Senate this week.

Senators from both parties questioned him on Russia’s readiness to abide by international trade rules. They pointed to China, which joined the WTO in 2001, as still a flagrant abuser of trade standards – a manipulator of its currency and a thief of foreign intellectual property. Why would Russia – unpredictable, far from democratic, and often unfriendly – act any differently?


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