By Jim Abrams, The Associated Press
December 7, 2012

WASHINGTON – A Russian trade and human rights bill cleared Congress and headed for President Barack Obama’s signature, opening new export opportunities for American businesses but antagonizing relations with Russia over its treatment of dissidents.

The Moscow government, while welcoming better trade relations, threatened retaliation Thursday over a section of the bill that would punish Russian officials who allegedly commit human rights violations. A Russian parliament official suggested sanctions could be imposed on U.S. officials accused of rights violations in Afghanistan, Iraq and elsewhere while the Foreign Ministry said the legislation “will have a negative impact on bilateral co-operation” and responsibility for that will “completely lie with the United States.”

Sen. John McCain, a Republican and a main sponsor of the human rights measure with Sen. Ben Cardin, a Democrat, contended it would help the Russian people by “sending a signal to Vladimir Putin and the Russian plutocracy that these kinds of abuses of human rights will not be tolerated.”

The 92-4 vote Thursday by the Senate to establish permanent normal trade relations with Russia followed an equally convincing vote in the House last month. The bill eliminates a long-obsolete 1974 provision, called the Jackson-Vanik Amendment, that tied trade relations with the former Soviet Union to the emigration of Jews and other Soviet minorities.

Although Obama and past presidents over the past two decades annually have waived the Jackson-Vanik restrictions, it lingered on the books because of congressional antipathy toward Russia’s human rights record and anti-American policies. This year the issues have included Russian support of the Assad government in Syria.

But acting to eliminate the 1974 provision and making normal relations permanent became a necessity when Russia on Aug. 22 entered the World Trade Organization, forcing it to lower tariffs, ease import restrictions, protect intellectual property and participate in the WTO dispute resolution system.

Until the United States normalizes trade, U.S. traders will be alone among the members of the 157-nation WTO unable to enjoy the increased market access.

Obama issued a statement saying the legislation, which also extends permanent normal trade relations to the former Soviet state of Moldova, “will ensure that American businesses and workers are able to take full advantage of the WTO rules and market access commitments that the United States worked so hard to negotiate.”

The administration and economists estimate that U.S. exports of goods and services, now about $11 billion a year, could double over the next five years under normalized trade relations with Russia — and its 140 million consumers.

The Coalition for U.S.-Russia Trade, which represents manufacturing, service and agriculture interests, says the United States now commands only about 4 per cent of Russia’s import market of $400 billion a year, compared to 40 per cent for Europe and 16 per cent for China.

It says that over the next 20 years Russian carriers will need about 900 passenger aircraft valued at about $100 billion, that Russia relies on imports for about 50 per cent of its $150 billion chemical market and that Russian demand for information technology, agriculture goods, energy technology and medical equipment are growing rapidly.

Sen. Max Baucus, a Democrat and chairman of the Senate Finance Committee, stressed that the legislation can only be a plus. “We change no U.S. tariffs and no U.S. trade laws. This is a one-sided deal in favour of American exporters.”

U.S. Chamber of Commerce President and CEO Thomas J. Donohue called it a “rare bill that will create American jobs without costing the taxpayer a dime.” He said bipartisan co-operation on trade matters, including completion of free-trade agreements with South Korea, Colombia and Panama and reauthorization of the U.S. Export-Import Bank, have been among the “top achievements” of the current Congress.

But it could have ramifications on overall U.S.-Russian relations. That’s because the bill includes a provision to sanction Russian human rights violators by withholding visas and freezing financial assets. The measure, named for Russian lawyer and whistleblower Sergei Magnitsky who died in a Russian prison three years ago after allegedly being tortured, was included in the trade bill as lawmakers balked at normalizing trade without holding Russia accountable for its poor human rights record.

“Jackson-Vanik served its purpose with respect to Russia and should be revoked, but in its place we should respond to Russia’s continued corruption and human rights violations,” said Sen. Orrin Hatch of Utah, the top Republican on Baucus’ committee.

After the Senate vote, Alexei Pushkov, head of the foreign affairs committee in the lower house of Russia’s parliament, said the State Duma may respond by imposing similar sanctions on U.S. officials accused of violating the rights of Russian citizens abroad. An alternative would be to target U.S. officials accused of rights violations in Afghanistan, Iraq, Libya and other nations, Pushkov was quoted as telling the ITAR-Tass news agency.

Associated Press writer Vladimir Isachenkov in Moscow contributed to this report.