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Baucus Brings Montana Rancher before Senate to Highlight Benefits of Russia Trade Opportunity

Press Release

Location: Washington, DC

Montana's senior U.S. Senator Max Baucus held a hearing in his Senate Finance Committee today with Montana Stockgrowers President Watty Taylor to help educate members of Congress on the critical need for legislation that ensures American companies can take advantage of Russia joining the World Trade Organization this summer. Baucus recently returned from a trip to Russia ready to lead Congress in acting on the necessary legislation - which is a combination of passing Permanent Normalized Trade Relations, or PNTR, and repealing a Cold War relic known as Jackson-Vanik. American businesses give up nothing through PNTR, but without it they will lose out on the opportunity to dramatically increase beef sales to Russia and double American exports there, while other countries reap the benefits.

"If the United States passes PNTR with Russia, U.S. exports to Russia are projected to double within five years. If Congress doesn't pass PNTR, Russia will join the WTO anyway, and U.S. exporters will lose out to their Chinese and European competitors. These competitors will expand their exports at our expense. Russia PNTR is a one-sided agreement that benefits American workers and businesses and requires them to give up nothing in return," Baucus told his colleagues at today's hearing.

"Senator Baucus, going to PNTR is going to give us country specific tariff rate quotas that we currently don't have under the bilateral agreement or Jackson-Vanik. Another thing this does is it opens us up to high-quality beef, which is what we are very good at producing in this country. I think we can take full advantage of this. To address some of these other issues, I guess what I would like to say is this - if we don't do it, if we are not trading with Russia, somebody else is," Taylor told Baucus' Senate Committee. "From our stand point as cow calf producers, the profit that is coming to our business is from our export market, whether it be Russia or Korea or whatever. That has substantially helped us and we need it to keep up with the cost of doing business."

What PNTR Means for Montana Beef:

* Under PNTR/Jackson-Vanik repeal, Russia's accession to the WTO will significantly expand market access for American beef, by allowing 60,000 tons of frozen U.S. beef to be sold in Russia under a reduced tariff of 15 percent. In addition, Montana ranchers will also be able to up to 11,000 tons of fresh chilled beef at the reduced tariff. And, the United States will be able to export high-quality beef above the allotted amount at a 15 percent rate as well.
* Russia is already America's 5th largest export market for American beef by volume. The U.S. currently exports 48,000 tons and current tariffs fluctuate from 15 to 60 percent.

Additional background:

American exports of goods and services into Russia are expected to double to $19 billion within five years of Russia's accession to the WTO.

But first, in order for American companies to receive the full benefits of Russia joining the WTO, the U.S. Congress must pass legislation providing Russia with what is known as Permanent Normal Trade Relations (PNTR) and repeal a law left over from the Cold War era known as Jackson-Vanik. As Chairman of the Senate Finance Committee, with sole jurisdiction over international trade, Baucus is leading efforts to ensure PNTR is passed quickly.

Russia agreed to open its markets and follow WTO rules as part of its accession to the WTO. Unlike a free trade agreement, the United States will not have to grant any market access benefits to Russia as part of its accession.

WTO member countries formally invited Russia to join the WTO in December 2011. Russia will become a WTO member 30 days after it ratifies the accession agreement, which it must do by early July.

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