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Mr. BOUSTANY. Thank you, Chairman Dreier.
Let me say thank you, first of all, for your tremendous service to our country in your capacity as a Member of Congress and as chairman of the Rules Committee. I want to thank you for your leadership on international trade and in promoting America's role in international trade. I also want to thank you for your friendship and for your wise counsel. I've enjoyed the time I've been able to travel with you.
Mr. DREIER. We've still got months to go.
Mr. BOUSTANY. We still do, but I'll say this: I'll miss having you here, and I look forward to keeping in touch in the future.
Mr. DREIER. Absolutely, we should do that.
Mr. BOUSTANY. Thank you for organizing this round of speeches tonight to talk about this crucial piece of legislation that we need to pass because what it will do will be to ensure a level playing field for U.S. workers, U.S. farmers, employers who are competing for business in Russia.
Now, we all know that, until Russia came into the WTO, it was a very difficult place to get market access for our businesses, especially, certainly, large companies, but small companies, mid-sized firms. I believe it is vital for Congress to grant Russia permanent normalized trade relations by removing them from the Jackson-Vanik amendment. If we don't do this, if we don't terminate that provision and grant PNTR, Russia will deny or could certainly deny U.S. exporters some of the market-opening concessions it has made to join the WTO, and the United States would not be able to challenge those actions in a rule-based system through the WTO's dispute settlement system.
This is critically important, especially if we talk about small- and mid-sized firms that are in manufacturing that want to export. They need that kind of rules-based system to work within. Otherwise, they don't have the recourse to fight protracted battles in a difficult market like Russia's.
Of course, it's with some trepidation that we undertake this as we know that the relationship between our two countries is somewhat tenuous. We know very well about Russia's human rights abuses. We know about the poor respect for the rule of law. We've heard extensive stories about the corruption. The reality, though, is that Russia has now become a full-fledged member of the World Trade Organization, and to avoid putting the U.S. at a disadvantage, we need to move forward and grant permanent normalized trade relations.
I'll say this: that the best thing we can do as a country from a foreign policy standpoint with our relationship with Russia is to move forward with normalizing trade relations with Russia. If you want to see political reforms in Russia, if you want to clean up the corruption, if you want to see the rule of law flourish in Russia, our commercial relationship with Russia is critical because it will help build a strong, vibrant middle class in Russia, which will help bring about political reforms there and help overall in the world of security. At the same time, it's a win-win because this grants the United States' businesses and farmers access to a market which will help create good-paying, high-paying jobs here in the U.S.
PNTR will also make permanent the trade status the United States has extended to Russia on an annual basis for more than a decade. So we're not doing anything new. We're permanently normalizing this, which essentially grants Russia the same access to the U.S. market that all of our other trading partners enjoy.
This is nothing new or anything special for Russia. Rather, it is far more important for the United States, for our manufacturers, our service providers, our agriculture interests who are seeking open access into the Russian market.
In an attempt to continue a level playing field for international trade, the WTO requires members to extend normal trade relations to all other WTO members on an unconditional basis, unless a country does not want to apply WTO rules to another country. After 18 years of negotiations, Russia officially became a member of the WTO on August 22 of this year. Currently, the United States has a condition that is placed on Russia. It dates back to the 1970s when the Soviet Union had restrictive immigration policies preventing Jews from leaving its territory.
Congress passed the Jackson-Vanik amendment to the Trade Act of 1974. However, since 1992, the United States has certified annually that Russia complies with the Jackson-Vanik amendment's provisions, and we have conferred normal trade relations on an annual basis to Russia. Only by graduating Russia from the Jackson-Vanik amendment, making these normal trade relations permanent will the U.S. be able to be in full compliance with its WTO obligations, enabling U.S. businesses and farmers to enjoy all the trade concessions and commitments that Russia has made in order to join the WTO.
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Mr. BOUSTANY. That's exactly right. This is a Cold War relic, this amendment that was put into place. The gentleman is correct that since 1992, we've on an annual basis waived its provisions, but we now need to move forward. The world has changed.
As we look to move forward with expanding market access for our farmers, our businesses, especially small and mid-sized firms, it's critical that we grant permanent normalized trade relations if we're going to maintain U.S. competitiveness globally. Right now we're slipping. We're losing our competitive edge.
A country like China, for instance, has consummated well over 100 trade agreements just in the last couple of years. We have done three, and it took us 5 years since the Bush administration to put in place three relatively small trade agreements. We need to take advantage of the WTO structure. And with Russia coming on board as the ninth largest economy, we have a huge opportunity to promote American competitiveness and American business interests at no cost to us. Staying out of this hurts us, and that's why we need to move forward.
If we don't act to grant PNTR to Russia, our Nation's dedicated workforce, our determined business community, we'll be left at a competitive disadvantage, vis-a-vis our foreign competitors. Given the slow growth of our economy and the continued high unemployment rate, we can't allow this to happen. And with Europe struggling, this is an important market to help with global growth by helping U.S. growth and jobs in the United States.
I was a cosponsor of the vital legislation to grant PNTR to Russia, to place additional reporting requirements, of course, on both Russia and the U.S. administration. These conditions ensure that Russia implements its WTO obligations and those obligations are enforced.
Some will raise the question of, Wait a minute, we had a problem with China when they came onto the WTO, and we're still struggling with that. We have learned from that process, and we have additional safeguards in this agreement that will help make sure that Russia fully maintains its obligations under permanent normalized trade relations.
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Mr. BOUSTANY. If we're going to work through these commercial types of agreements and eliminate the corruptions, the abuses, the intellectual property theft, we have to make the rules-based system work. And the WTO framework which basically grew out of the general agreement on tariffs and trade in the 1940s is that mechanism, and it works. That's what allows us to make a claim against China, for instance, when they're doing abusive practices. It is an equalizer. It basically puts in place a framework that ensures that trade is conducted fairly and openly. That's what U.S. workers and U.S. farmers are looking for.
It's also very important as a critical piece to maintaining global security. If we focus on international economics, commercial relationships through open navigation of the seas, open trade, we're going to see less conflict in the world. I think this is critical from a security standpoint, and it's critical from a standpoint of economic prosperity for the United States. As the United States continues to face economic challenges, our national exports have remained relatively strong. They've probably kept us out of a recession over the last several quarters.
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Mr. BOUSTANY. I agree with that.
Any of these things that will help promote the development of a middle class in these other countries, whether it be China or Russia in this particular class, creates a new consumer class for American goods.
Now, we're all patriotic. We want to buy American. I love to go to the store, and I'll buy something; and if the label says ``Made in America,'' I feel good. I feel good about it. Most Americans do. But by God, I want a Russian mother to buy something on the shelf that says ``Made in America.'' We need to sell America, sell American goods overseas. That's where 95 percent of the world's consumers are, and our economy has been too much mired in domestic consumption at the expense of not looking into the outside world to export American-made goods to these consumers who live outside the United States.
By normalizing our trade relationship with Russia, we will create the mechanism to do that with Russia. This will increase critical sales of American goods and services to Russia. Not only that, we will create very good high-paying jobs here in the United States. This is definitely a win-win situation.
We spoke about Russia being the ninth largest world economy, importing more than $400 billion in goods and services. And as some of my colleagues may be aware, Louisiana, my State--it's a small State, but it's seventh among the 50 States in total exports because of our location on the Gulf of Mexico and our waterways and our ports.
In the first quarter of 2012, Louisiana farmers and small businesses exported nearly $14.25 billion in goods and services to the rest of the world. In fact, in 2011, Louisiana exported $135 million worth of goods to Russia, which created a lot of good jobs in Louisiana.
Louisiana was a top supplier of PVC plastics to Russia in 2011, with $21.4 million in exports, but exporters in the EU and in China still accounted for more than 60 percent of Russian imports of that particular material. We have an opportunity to grow this if we grant this kind of permanent, normalized trade relations.
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Mr. BOUSTANY. That's exactly right. Louisiana produces a PVC plastic, or looking for opportunities to get into that market, and yet they're being superseded by countries in Europe and China.
In fact, Russia, when it joined the WTO, agreed to reduce its average tariffs on plastic products from 10 percent to 6.2 percent. If we don't do this, we're going to be subject to higher tariffs, putting us at a major competitive disadvantage, and our foreign competitors will take advantage of this. Again, we'll have the mechanisms in place, if we do grant trade relations, to have a dispute mechanism in place to ensure that Russia keeps its commitments to our workers, our businesses back here at home.
Now, there's no reason not to move forward with this, and I hope that we can see some action on this relatively soon, because as each day kicks by, we are losing competitiveness.
One last tidbit of information, Louisiana doesn't have large Fortune 500 companies. We have a couple, but we have a lot of small- and mid-sized firms that are manufacturers, and we are a leader in manufacturing on the small scale in the energy sector with equipment and services that are vital to energy production, energy security globally.
These companies would love to get into the Russian market, to have the right protections of law so that they could sell their goods and services. This would lead to a lot of economic activity in Louisiana. It would help, you know, create good-paying jobs once again, help promote our energy sector, development and manufacturing in the energy sector, of which Louisiana--and the United States, frankly--has been a leader.
Congress must continue to support these kinds of agreements to boost our economy here at home to create job opportunities, good-paying job opportunities right here at home. That's why it's so important to move forward on this.
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