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Guest commentary / Normal trade relations with Russia


Ready market for county businesses

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By Eric Schinfeld, Troy McClelland and John Mohr
Published:
This summer, Russia will end its status as the largest economy in the world not yet in the World Trade Organization, opening its markets to a wide variety of increased international trade opportunities.
There's only one problem for businesses in the United States. Unless Congress passes permanent normal trade relations (PNTR) with Russia, U.S. firms will be forced to sit idly by while competitors around the world take advantage of lower Russian tariffs and reduced market barriers.
Russia is the world's 11th largest economy, but only our nation's 31st largest export market. The good news is that things could significantly improve when Russia joins the WTO. As part of its WTO accession, Russia will reduce more than one-third of its tariffs immediately, and will continue to decrease numerous tariffs over the next three years. In addition, they will enhance intellectual property protections, improve food safety standards, open service markets and increase market access for a wide diversity of industries. Unlike a free trade agreement negotiation, the United States would not be required to give any new access to our own markets in exchange for these benefits.
This issue should be of great interest to Washington businesses, because Russia is one of our fastest growing trade partners. From 2010 to 2011, Washington exports to Russia grew approximately 80 percent, compared to a 16 percent growth in overall state exports. PNTR with Russia will dramatically increase this trend, benefitting a wide variety of Washington industries. For example, services companies will have significantly increased access to -- and protections in -- this market, while farmers will have the assurances that WTO membership requires Russia to abide by science-based animal and plant health standards.
In particular, permanent normal trade relations with Russia could greatly advantage Snohomish County. For example, commercial airplane tariffs will be cut in half, meaning that the Boeing Company and its many suppliers will have increased access to a market predicted to need 1,080 new planes valued at approximately $110 billion over the next 20 years. And Russia is one of the Port of Everett's biggest export markets, particularly with the recent announcement of FESCO Transportation Group expanding their Russian service to include rolling cargoes, and the addition of a new carrier, Sakhalin Shipping Company, between Everett and the Russian Arctic.
Yet, with each passing day, Congress has still not acted on this legislation. While we must continue efforts to ensure that Russia abides by international standards of democracy and civil society, delaying PNTR with Russia is actually counterproductive. The United States Ambassador to Russia has testified that prominent opposition figures in Russia are calling on the United States to take this step, because increased U.S.-Russian economic ties facilitates the improvements that they seek.
At its core, Congressional approval of PNTR with Russia is a matter of basic international competitiveness. And for a state like Washington, with an economy so strongly engaged in trade, it has the potential to significantly increase jobs and economic opportunities for a wide variety of our state's residents.
The Washington Council on International Trade, Economic Alliance Snohomish County and Port of Everett strongly support passage of this key trade legislation, and we're continuing to work with the Washington Congressional delegation to build support for its passage.
We urge you to join us by contacting your elected officials to share your support for permanent normal trade relations with Russia.

Eric Schinfeld is the President of the Washington Council on International Trade. Troy McClelland is the President and CEO of Economic Alliance Snohomish County. John Mohr is the Executive Director of the Port of Everett.

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