Human Rights or Free Trade

The U.S. makes the re-establishment of its trade relations with Russia dependent on the question of human rights in that country.

Last Thursday, the U.S. Senate voted on a law that was meant to remove the last barriers to trade relations with Russia.

This normalization is a result of Russia’s accession to the World Trade Organization (WTO), which took place in August. Russia has promised to make its markets more approachable to companies from abroad, to protect intellectual property and to lower customs barriers. However, in order to allow American businesses to take advantage of these improvements, it is necessary to have parallel action on the part of the U.S. Congress, whose trade restrictions imposed on Russia can be traced back as far as the Cold War. Among others, the Jackson-Vanik amendment, which says that relations between the U.S. and Russia are dependent on the situation of Jews in the USSR and their ability to leave the country, will cease to apply.

Admittedly, the subsequent presidents have been suspending its application each year, but it was never repealed. The new project includes the requirement that the U.S. government will monitor the application of WTO requirements in Russia.

The outcome of the voting that was supposed to establish new, rational trade relations between America and Russia had been dubbed obvious. In November, a similar law was passed in the House of Representatives with a huge margin. Additionally, the White House has announced its intention to give prompt attention to the law. It has been lobbied for by the American Chamber of Commerce, which complained that in the huge Russian domestic market of 140 million people, Americans had been outdistanced by the Chinese as well as the Europeans — the market is growing very fast. So in order to let the United States benefit from the growth, it should establish normal, constant relations in the field of trade with Moscow. If it does so, Chairman of the Senate Committee on Finance Max Baucus claims it will double exports to Russia over the next five years. The lack of PNRT (permanent normal trade relations) status makes it impossible for the U.S. to resolve any possible conflicts with the country by the means of the WTO.

What recently irritated Russia, though, was the project that is now being discussed, which would make it possible to use sanctions against those who infringe on human rights (the so-called Magnitsky Act, named after a member of the opposition who died in a Russian prison three years ago).

Prime Minister Medvedev has named the joint consideration of the two acts “a big mistake.” Russia warned that a possible enforcement of the Magnitsky Act would threaten their mutual relations. The U.S. remains persistent.