U.S. President Barack Obama and Russian President Vladimir Putin were to discuss, among other things, U.S.-Russian trade (or trade barriers) at a bilateral side meeting of the G20 Economic Summit in Mexico on June 18, 2012. The meeting was in part to prepare for Russia's entry into the World Trade Organization (WTO). However, it was also to haggle over problems both nations have with each others' trade policies.
Russia has considered joining the WTO. Russia could become a member before the end of 2012. Still, the two nations must grant each other permanent normal trade relations before that happens. The Obama-Putin meeting may bring about that status.
According to the U.S. State Department, in 2010, U.S. and Russian trade reached $31.7 billion, a jump of 35% from 2009.
Nevertheless, the number breaks down to a trade disparity, with the U.S. importing $25.7 billion in Russian goods, while it exported only $6 billion in U.S. goods to Russia. American exports included poultry, vehicles and machinery, aircraft, and electrical and tech products.
A state department website says that Russia has several barriers that impede imports from the United States. Those include:
The State Department also says that Russia's "lax enforcement" of intellectual property rights hurts American entertainment and technical business and "is an ongoing irritant in U.S.-Russia trade relations."
Meanwhile, a relic from the Cold War between the U.S. and the Soviet Union impedes U.S. trade with Russia. The 1974 Jackson-Vanik amendment mandates annual reaffirmation of trade status with Russia, rather than permanent trade status. The original amendment tied trade to the Kremlin's allowing minorities to leave Russia.
The annual review element tends to make businesses skittish of long-term agreements with Russia.
On June 12, 2012, U.S. Senate Finance Committee Chairman Max Baucus introduced a bill to repeal Jackson-Vanik. "This is an opportunity to double our exports to Russia and create thousands of jobs across every sector of the U.S. economy, all at no cost to the U.S. whatsoever," said Baucus.
Baucus said Jackson-Vanik "served its purpose" in the Cold War, but now it "stands in the way of our famers, ranchers, and business pursuing opportunities to grow and create jobs."
U.S. Trade Representative Ron Kirk said repeal of Jackson-Vanik would keep American producers and companies from being at a "disadvantage in the Russian market compared to their global competitors."
The repeal, however, faces political opposition. A group of senators has expressed concern over alleged Russian civil- and human rights abuses and Russia's continued support of Syrian President Bashar Al-Assad.
Russia is a long-time ally of Syria and supporter of Assad. For 16 months, however, Assad has been using his government troops to crush opposition to his regime. Outside sources have estimated that Syrian troops have killed as many as 10,000 civilians.
Both Obama and U.S. Secretary of State Hillary Clinton have said Assad has sacrificed his legitimacy in the brutalization of his own people, and they have demanded that he relinquish power. Putin, however, has said Assad's status remains up to Syrian domestic influences and not outside forces.
In the civil and human rights arena, the State Department's human rights report for 2011 lists three major areas where Russia fails to meet basic standards. Those are:
Russia has considered joining the WTO. Russia could become a member before the end of 2012. Still, the two nations must grant each other permanent normal trade relations before that happens. The Obama-Putin meeting may bring about that status.
Trade Stats
According to the U.S. State Department, in 2010, U.S. and Russian trade reached $31.7 billion, a jump of 35% from 2009.
Nevertheless, the number breaks down to a trade disparity, with the U.S. importing $25.7 billion in Russian goods, while it exported only $6 billion in U.S. goods to Russia. American exports included poultry, vehicles and machinery, aircraft, and electrical and tech products.
A state department website says that Russia has several barriers that impede imports from the United States. Those include:
- "Tariffs and tariff-rate quotas."
- "Discriminatory and prohibitive charges and fees."
- "Discriminatory licensing, registration, and certification regimes."
The State Department also says that Russia's "lax enforcement" of intellectual property rights hurts American entertainment and technical business and "is an ongoing irritant in U.S.-Russia trade relations."
Ghost Of The Cold War
Meanwhile, a relic from the Cold War between the U.S. and the Soviet Union impedes U.S. trade with Russia. The 1974 Jackson-Vanik amendment mandates annual reaffirmation of trade status with Russia, rather than permanent trade status. The original amendment tied trade to the Kremlin's allowing minorities to leave Russia.
The annual review element tends to make businesses skittish of long-term agreements with Russia.
On June 12, 2012, U.S. Senate Finance Committee Chairman Max Baucus introduced a bill to repeal Jackson-Vanik. "This is an opportunity to double our exports to Russia and create thousands of jobs across every sector of the U.S. economy, all at no cost to the U.S. whatsoever," said Baucus.
Baucus said Jackson-Vanik "served its purpose" in the Cold War, but now it "stands in the way of our famers, ranchers, and business pursuing opportunities to grow and create jobs."
U.S. Trade Representative Ron Kirk said repeal of Jackson-Vanik would keep American producers and companies from being at a "disadvantage in the Russian market compared to their global competitors."
Concern Over Current Russian Policies
The repeal, however, faces political opposition. A group of senators has expressed concern over alleged Russian civil- and human rights abuses and Russia's continued support of Syrian President Bashar Al-Assad.
Russia is a long-time ally of Syria and supporter of Assad. For 16 months, however, Assad has been using his government troops to crush opposition to his regime. Outside sources have estimated that Syrian troops have killed as many as 10,000 civilians.
Both Obama and U.S. Secretary of State Hillary Clinton have said Assad has sacrificed his legitimacy in the brutalization of his own people, and they have demanded that he relinquish power. Putin, however, has said Assad's status remains up to Syrian domestic influences and not outside forces.
In the civil and human rights arena, the State Department's human rights report for 2011 lists three major areas where Russia fails to meet basic standards. Those are:
- Violations of Democratic Processes: The government allegedly interfered in Parliamentary elections in December 2011.
- Administration of Justice and Rule of Law: "Individuals who threatened powerful state or business interests were subjected to political prosecution, as well as to harsh conditions of detention. The conditions of prisons constituted a major violation of the human rights of many prisoners, who were subjected to poor medical care, lack of basic human needs, and abuse by prison officials. These conditions at times resulted in death."
- Freedom of Expression: Government pressure on print and broadcast media limits political discourse.