It Sure Looks Like Congress Will Vote to End Russia’s Favorable Trade Status

By Elizabeth Brotherton-Bunch
Mar 07 2022 |
A container ship at anchor in Port Vladivostok Roadstead in Russia. Photo by Victoria Koltsova, Getty Images

There’s bipartisan agreement to do so, and legislation also would ban Russian oil imports and require the U.S. Trade Representative to seek Russia’s suspension from the World Trade Organization (WTO).

Congress is set to vote as soon as Tuesday on legislation to end Russia’s Permanent Normal Trade Relations Status (PNTR) with the United States, another piece of the ongoing effort to punish Vladimir Putin and his regime for the unjustified invasion of Ukraine.

A bipartisan group of top lawmakers on Monday announced that they reached an agreement on the legislation, which also would ban imports of Russian oil and require the U.S. Trade Representative to seek Russia’s suspension from the WTO. These actions also would apply to Belarus, a Russian ally.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Ranking Member Mike Crapo (R-Idaho) joined House Ways and Means Committee Chairman Richard Neal (D-Mass.) and Ranking Member Kevin Brady (R-Texas) in announcing the bipartisan agreement, noting in a joint statement that taking these actions will send a clear message to Putin that his war is unacceptable and the United States stands firmly with our NATO allies.” They continued:

“While Congress needs to do more, as the congressional leaders with jurisdiction over our nation’s trade policy, we are committed to using the tools at our disposal to stop Russia’s unconscionable and unjust war on Ukraine and to hold Belarus accountable for its involvement.”

Wyden was one of several Members of Congress who introduced legislation to strip Russia of its PNTR status. Speaker Nancy Pelosi (D-Calif.) also voiced her support for doing so in a letter sent to House Democrats on Sunday that outlined efforts to “further isolate Russia from the global economy.”

PNTR is a legal status that essentially allows a country to have free trade with the United States, meaning that its imports are subject to low tariffs. The United States granted Russia PNTR status in 2012, when it joined the WTO.

If the legislation agreed upon by lawmakers on Monday becomes law, tariffs on Russian imports will rise from 3% currently to 33%, according to The New York Times.

U.S. allies like Canada already have moved to revoke Russia’s “most favored nation” trade relations status, and others are said to be considering it. Meanwhile, one of the people who originally negotiated Russia’s PNTR status — former U.S. Trade Representative and now Sen. Rob Portman (R-Ohio) — is among the lawmakers who introduced legislation to revoke it now. Portman said on the Senate floor:

“Free trade with the United States is a privilege, not a right. After Russia joined the WTO in 2012, Congress passed legislation to expand trade between our countries by eliminating tariffs on some of these imports. But as easily as we granted PNTR, Congress can take it away. Invading a sovereign nation, a democracy no less, is certainly grounds for us to take away that privilege, and we have the right to undo it under the WTO rules for national security reasons.”

U.S.-Russia trade is relatively limited compared to other countries; in 2019, Russia was the U.S.’s 40th largest export market and Russia ranked 20th in supplying goods to the United States, mainly sending metals, iron, chemicals, fertilizer and fuels to U.S. shores.

Russia’s fuel exports have drawn a good chunk of attention, as they are a significant source of Putin’s wealth and are helping fund the war, especially given the other sanctions already put in place by the West. All signs point to the United States moving ahead to ban imports of Russian oil, despite hesitation from European allies to do the same.

Of note: The United Steelworkers (USW) union, which is largest labor union operating U.S.-based oil refineries, terminals and pipelines, called on oil companies to stop processing Russian crude oil in U.S. refineries. USW International President Tom Conway said that the union “will begin to oppose with every lever available to us the processing of this Russian-sourced oil, and we call upon our unionized colleagues in other oil-processing nations to also help cut off the income stream Vladimir Putin generates through exporting Russian crude.”

Meanwhile, there is growing coordination between the United States and Europe suspending Russia from the WTO. While there isn’t a specific provision in the WTO agreement to outlines how to do so, “it is possible for two-thirds of the WTO’s 164 members to alter the rights and obligations of members and – if a member refuses to agree – for three-fourths of the members to expel that member from the organization,” according to James Bacchus is a professor of global affairs at the University of Central Florida.

On their own, none of these individual actions are likely to convince Putin to end his brutal invasion. But all are part of the coordinated strategy among the United States and its allies to punish Putin for his inhumane actions and weaken his ability to wage this unnecessary war.