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Russia and Moldova Jackson-Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012

Floor Speech

Location: Washington, DC


Mr. PORTMAN. Madam President, I rise today in support of the legislation before us and in support of the comments my Independent colleague from Connecticut just made which had to do with the Magnitsky provision, which I also support. I heard my colleague from Arizona, Senator McCain, talking about it passionately earlier. It is an important part of this legislation. But with regard to the trade part of the legislation, I would like to say that I think this is also a great opportunity for us. I see my colleague from Maryland here who, along with Senator McCain, has taken the lead on the Magnitsky provision encouraging better human rights in Russia, and I think we will see over time that this will have an impact globally.

With regard to the trade side of this debate we are having today, I hope we all recognize that one of the great, untapped opportunities for our economy and for adding jobs is to expand exports. We have a great, untapped potential here because America still is not exporting at the level it should be. We do face stubbornly high unemployment. We do have stagnant growth rates. We are looking at some tough economic numbers even as we head toward the fiscal cliff which could make it even worse. So we need to do all we can to ensure that our workers and our farmers have access to the 95 percent of consumers who live outside of our borders. That adds jobs. When companies consider whether they are going to get into the export business or not, which again creates opportunity here, they want to know if they are going to be treated with certainty, predictability, and fairness in the marketplace. Exporters need to know that if a country doesn't play by the rules, then that country will then face consequences. Those consequences really are what the World Trade Organization is all about. That is why this discussion is so important, because by today or tomorrow, voting to authorize permanent normal trade relations with Russia, we then can take advantage of the World Trade Organization rules as they relate to Russia and to our trade with them.

Russia joined the WTO on August 22, and the United States was a big part of that accession. We worked with Russia for 18 years to ensure that they were willing to go along with certain fairness provisions on trade to be able to enter the WTO, and we need to be sure now that we can take advantage of those provisions. Without passing this legislation, America and our farmers and our workers could get left behind. By joining it, Russia did agree to abide by a certain set of common rules, and when they break those rules, other countries can then take them to court--the World Trade Organization--and help hold their feet to the fire.

It means Russia will be required to better protect intellectual property rights, which is a major concern for U.S. companies. It means Russia must treat fairly the highly technical services sector where the United States has a great opportunity, including telecommunications, insurance, energy services, and retail services. There we have a lot of competitive advantages and we are looking for a level playing field. It means they have to give rules-based treatment to our agricultural exports so they are not trumped by internal Russian agricultural politics. It means Russia has to improve its transparency and the rulemaking process so regulations are not taking place without an adequate comment period and input from job creators, including American companies that want to do business in Russia. These were all concessions that were secured, again, over this 18-year period by the United States and other countries, but primarily the United States took a role here--Republican and Democratic administrations alike--in ensuring that as Russia entered the WTO, we had the opportunity to have a fair trading system with them.

By the way, I was part of that as U.S. Trade Representative negotiating with my Russian counterpart. Secretary Johanns--then Secretary, now colleague from Nebraska--was part of that as U.S. Agriculture Secretary. Others here in the Congress have been part of that as members of the Finance Committee.

So currently we have these trade rules that apply to the rest of the world but not to us because Russia is part of the WTO but we haven't granted this important PNTR status. So of the more than 150 countries in the World Trade Organization, we are the only ones that are outside of this agreement at this point. American exporters will only receive those benefits with total certainty if we pass this bill to provide these normal trade relations with Russia. If we fail to do so, we really hold back American workers and businesses from growing in the Russian marketplace, which, by the way, has 140 million consumers. Our European and Asian competitors would have that reliability and certainty that we would lack. When Russia doesn't play by the rules, our competitors around the globe would be able to take them to the world trade court, but we wouldn't. If we think about it, in a way we are shooting ourselves in the foot if we don't move forward with permanent normal trade relations with Russia.

Russia is now the ninth largest economy. Unfortunately, we are underperforming in the Russian market. The United States, the world's greatest exporter, now only accounts for less than 5 percent of Russia's imports. Our competitors in Europe have a 40-percent share of the Russian market. China holds a 16-percent share of that market. So, again, it is a growth economy; it is an economy where we have tremendous opportunities.

I know Chairman Baucus talked about this earlier today. I watched him on C-SPAN where he talked about the opportunities in this market and about the need for us to help our exporters here in the United States by opening this potential market for our workers and our farmers. We can do much better if we pass this PNTR bill.

This is certainly true in my home State of Ohio. Ohio already exports about $200 billion a year in goods to Russia, and we want to retain those sales and add even more. This bill impacts a number of businesses with a large Ohio footprint.

Caterpillar, the world's leading manufacturer of construction and mining equipment, is one of them. Caterpillar employs nearly 1,000 Ohioans, including in the Miami Valley in Clayton, and is a great example of the certainty the PNTR bill will bring. With Russia's entrance into the WTO, tariffs on American-made Caterpillar trucks exported to Russia will fall from 15 percent to 5 percent. That allows Caterpillar to be much more competitive in the Russian market. For Caterpillar's off-highway trucks, the tariff reductions exceed $100,000 per truck. That is a real difference. It is a substantial margin. But if we don't pass this bill, we have no idea how Russia will treat our U.S. exports and we will have no way to hold them accountable.

Other Ohio businesses that will benefit include Procter & Gamble, which sells more than 50 brands in Russia, including detergents, shampoos, and diapers. They have the leading market share, by the way, in 75 percent of the categories in which they compete.

Eaton, which is a company in the Cleveland area and has thousands of employees in northeast Ohio, exports industrial clutches and brakes to Russia and looks forward, again, to the certainty this bill will bring when working with our customers in Russia. They need that certainty.

GE Aviation in Ohio employs about 9,000 people in Cincinnati and has a great opportunity to compete as Russia acquires over 1,000 new civilian aircraft over the next decade.

Ohio's cattlemen strongly support this legislation. Russia has made some important concessions in the negotiations that will help meet the growing demand for U.S. beef in Russia. Russia is currently the fifth largest export market for U.S. beef. According to the USDA, over 48,000 head of U.S. live cattle were sold to Russia just this year. In 2011 Ohio exported over 3,000 cattle to Russia, and we expect that number to rise dramatically.

The bill also contains some items the Russian Government opposes, including the human rights provisions which were discussed earlier here on the floor, inspired by the treatment of Russian lawyer Sergei Magnitsky. Senators CARDIN, MCCAIN, and others have put the spotlight on the corruption and the lack of transparency in Russia. These provisions will clamp down on human rights abusers, denying them visas and putting them on notice that their corruption won't be tolerated by freedom-loving countries such as the United States. The House passed this bill last month on the anniversary of Magnitsky's death, and it is time the Senate does the same.

We also have some provisions in this legislation that will ensure that our trade negotiators keep Russia's feet to the fire in implementing all the various commitments Russia has made, particularly with regard to agriculture. Russia has not always played by the rules. It has been a point of friction between our countries. We need to be sure they do the heavy lifting back home to bring their laws into compliance, including their pervasive use over time of non-science-based standards to discriminate against our U.S. agricultural exports.

I also wish to note my strong concern with Russia's involvement on another front; that is, their involvement in the continuing Syrian conflict. As a member of the Senate Armed Services Committee, I have watched the Syrian situation with alarm, particularly as we have seen it unfolding this week. Russia has been anything but an ally in this case with the support of the Asad regime. They vetoed three U.N. Security Council resolutions aimed at imposing tough sanctions on the Asad regime. When Russia isn't using their veto power to support their Syrian friends, they are arming the Asad dictatorship with over $1 billion, we are told, in weaponry, including attack helicopters, that they are using to continue their terror against their own citizens in Syria.

Let me be clear. While I fully oppose Russia's actions in Syria, this bill is no gift to Russia. In fact, this bill has teeth. It brings Russia into a rules-based system. It is good for America and our economy and our jobs, and I think it strikes a critical balance by giving critical assistance to American companies that want to export their products to Russia's growing middle class, supporting good-paying jobs here at home, while forcing Russia to play by the rules and, again, providing binding penalties if they fail to live up to these international standards.

While I am pleased we are finally moving forward on this bill, I am also disappointed we haven't made more progress over the last 4 years on trade. We didn't make opening new export markets a high priority in the President's first term. I am hoping that will change over the next 4 years because helping U.S. job creators export shouldn't be a partisan issue. Over 100 bilateral trade agreements are being negotiated today as we speak here on the floor. The United States is a party to none of them. We are a party to one multilateral trade agreement which I support, but we need to get back and engage in these bilateral agreements and open markets for our products. We have been sitting on our hands on the side lines in an increasingly global and dynamic economy. This is the first administration actually since FDR not to ask for the ability to negotiate export agreements and bring them to Congress under expedited procedures, which is now called trade promotion authority. And this is something unique.

This administration has yet to even ask for it over the last 4 years.

Last year, we finally passed the Korea, Colombia, and Panama export agreements. Hopefully, our bipartisan actions today to boost exports to Russia will signal a new chapter for us to engage as a Congress and with the administration in a much more ambitious and proactive trade policy.

I am pleased this bipartisan bill received such broad support from Republicans and Democrats in the House, getting 365 votes, and I urge my colleagues on both sides of the aisle to now support this legislation before us.


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