MOSCOW — After two decades of negotiations, Russia will join the World Trade Organization on Wednesday. The lower trade barriers that come along with membership will open up new opportunities for foreign companies to do business in Russia.
But American companies are guaranteed no such advantages — and may even face higher Russian tariffs than their competitors from other countries.
Because of concerns about the Kremlin’s crackdown on dissidents and its support for rogue governments, Congress has balked at the Obama administration’s request to grant Russia permanent normal trade relation status. That status is important because the WTO requires any country that seeks to benefit from it to apply the same trade rules to all member countries.
Major US exporters to Russia, like Caterpillar, Deere, and General Electric, are worried about the potential impact on their businesses from the congressional inaction. Across all sectors of the economy, Russia will lower import tariffs to 7 percent, from about 15 percent, for the 155 countries in the trade organization. Russian officials say they do not have any immediate intention of applying discriminatory tariffs against US companies, but they could legally do so at any time.
Members of Congress have suggested that granting Russia permanent normal trade relations would, in effect, turn a blind eye to Russia’s support for rogue governments, its defiance of Western efforts to isolate Syria and Iran, and President Vladimir Putin’s crackdown on dissent at home.
“The Obama administration has not articulated a clear and coherent strategy regarding Russia,’’ Senator Orrin G. Hatch, a Utah Republican, said in June. ‘‘Instead, they ask Congress to simply pass permanent normal trade relations and remove Russia from longstanding human rights law, while ignoring Russia’s rampant corruption, theft of US intellectual property, poor human rights record, and adversarial foreign policies.’’
For companies with major Russian exports, an extended congressional delay could be dire. Earlier this year, several chief executives testified to Congress that their market share in Russia and jobs at factories, research and development centers, and head offices in the United States could suffer.
Russia, with its heavy dependence on mining and energy industries, is one of the top 10 export markets for Caterpillar, which has sold $2 billion of machines there over the last five years.
‘‘This will really help them,’’ said Bill Pigman, an American dealer of heavy equipment in Moscow. ‘‘Why do you have to play brinksmanship? Congress is threatening Cat’s toehold in Russia.’’
--more--"
I agree with the protester.
