Many hope Congress acts on trade deal with Russia

Business: It’s a huge market for state’s fruit, airplanes

Staff writerOctober 20, 2012 

WASHINGTON – When Russia formally joined the World Trade Organization as its newest member in August, more than 150 countries began expanding trade with the ninth-largest economy in the world.

One big country did not: the United States.

Much to the consternation of business and trade officials around the nation, Congress has refused to approve a permanent trade pact with Russia, even though it has won broad bipartisan backing. As yet another sign of the deadlock in Washington, D.C., House and Senate leaders so far have not allowed the deal to come up for a final vote.

With time running out in the current Congress, pro-trade groups want the agreement high on the agenda when members return for a lame-duck session after Election Day. If the deal is not approved soon, they warn, the United States will miss a chance to export more products to 140 million consumers in Russia.

The stalled pact is partly the result of election-year politics and worries that Russia has not done enough to improve its record on human rights. Earlier this year, Republican presidential candidate Mitt Romney called Russia the nation’s top geopolitical foe, but he supports the deal as long as the country agrees to do more to crack down on human-rights violations.

But backers of the deal remain upbeat.

“It’s a tough time right now. People are feeling vulnerable in lots of ways, and so it’s not easy for us to talk about the benefits from these free-trade agreements,” said Jean Davis, director of international trade with the North Carolina Department of Commerce. “But we really try to push for these things. We’re patient, and this is just another natural progression, so we understand people’s hesitation.”

Texas exported the most products to Russia in 2011, followed by Illinois, California, New York and Washington, according to the Coalition for U.S.-Russia Trade.

The environmental group Friends of the Earth opposes the deal, saying the regime of Russian President Vladimir Putin “must not be rewarded” for its record on the environment, trade and human rights. And U.S. workers say the pact would do nothing to open the Russian market to more U.S. cars but instead would make it easier for U.S. automakers to move assembly facilities to Russia.

Backers of the deal had pushed hard to get a final vote in Congress before Russia formally joined the WTO this summer.

The pact has won support from many diverse interests, including the Obama administration and the U.S. Chamber of Commerce, normally at odds on many issues. Both are touting the trade pact as a critical jobs bill.

It has cleared two trade-friendly panels on Capitol Hill: the Senate Finance Committee, controlled by Democrats, and the Republican-dominated House Ways and Means Committee.

And a bipartisan group of 15 governors is pushing the president and Congress to quickly approve the pact, saying it could double U.S. exports to Russia from $11 billion in 2011 to $22 billion in 2017.

Supporters say the agreement could prompt immediate payoffs in a wide swath of the U.S. economy, mainly by cutting tariffs on goods going into Russia.

In California, U.S. trade officials say, the pact would increase exports for agricultural products and lead to more foreign sales for the state’s large communications and technologies industry.

In Washington, the winners could include the state’s fruit producers, who already rank second in the nation in fruit exports, and Boeing, one of the state’s largest employers.

Tariffs on pears and cherries would be cut in half by 2015. And duties on commercial airlines also would be slashed by 50 percent, providing a big help to Boeing, which predicts that Russian carriers will need 1,000 new passenger airplanes in the next two decades.

Russia is one of the fastest-growing markets for Washington state, where a report released earlier this month found that 40 percent of all jobs are now linked to international trade. And the state’s exports to Russia jumped 80 percent from 2010 to 2011 alone. In July, the Sakhalin Shipping Co. began service from the Port of Everett to help support the mining industry in the Russian Arctic.

“We forget that, other than Alaska, Washington is the nearest state to Russia,” said Sam Kaplan, president of the Trade Development Alliance of Greater Seattle. “There are some 200,000 Russian speakers in Washington. No matter what Congress decides, it will have an impact on Washington state trade and our economy.”

Mark Powers, vice president with the Northwest Horticultural Council, based in Yakima, said Russia has great potential for fruit producers in all of the Pacific Northwest, representing a $20 million market for apples, pears and cherries in the three states of Washington, Oregon and Idaho.

He said he’s disappointed with the inaction by Congress.

“Honestly, a lot of work went into the negotiations over many years,” Powers said. And now with Russia in the WTO, he said, “the rest of the world is benefitting.”

“We’re entering into a new harvest season,” he said. “We’d like to benefit.”

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