Blumenauer, Doggett Introduce Bill to Remove Russia From Normal Trading Status

House Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., and Rep. Lloyd Doggett, D-Texas, introduced legislation to end permanent normal trade relations with Russia, and they are seeking to remove Russia from the World Trade Organization as well. “In seeking multiple ways to respond to Russia’s unprovoked invasion of Ukraine, we should close every possible avenue for Russian participation in the world economy,” Doggett said in their Feb. 25 press release. "As Putin undermines the stability carefully built since World War II, he and his oligarch pals should not benefit from the trading system created to ensure that stability and peace.”

Blumenauer said, "The United States must use every tool at our disposal, short of armed conflict, to protect Ukraine’s independence. ... Putin and his cronies should not be insulated from the consequences of their unjustified actions and I intend to use my position as the chairman of the Ways and Means Subcommittee on Trade to ensure that."

A spokeswoman for Ways and Means Chairman Richard Neal, D-Mass., told International Trade Today: "The Chairman is open to any ideas and will be conferring with Committee members on steps forward next week when the House returns to Washington."

On Feb. 24, the Coalition for a Prosperous America, a domestic industry group, called for both Russia and China to no longer have permanent normal trade relations with the U.S. Charles Benoit, CPA's trade counsel, wrote that PNTR is a "free pass for dictators." He said that the U.S. first offered normal trade relations to the Soviet Union in 1990, but it was not permanent, and therefore, he said, Russia was accountable.

"That all changed on December 14, 2012, when President Obama signed into law H.R. 6156, which made Russia’s NTR status permanent," he said. Benoit noted that NTR tariffs average 3.4%. He acknowledged that we don't import a lot from Russia, about $20 billion a year, with $13 billion of it fuel, $2.2 billion platinum, and $1.4 billion iron and steel.

"Repealing PNTR for both Russia and China (which, let’s remember, annexed Hong Kong last year) should be viewed as a minimum for anyone who considers themselves a hawk. Doing so would shift them both back to the Trade Act of 1974’s Title IV framework, which could be simultaneously amended with some new criteria. Like, ‘no conquering foreign lands’," he wrote.

Chad Bown, of the Peterson Institute for International Economics, said, "I did the calculation to see what the average tariffs would be if the US shifted Russia’s treatment from being a WTO member to being subject to the US 'column 2' tariffs. The result was an increase in the US tariff from an average of 3% to 33%. "However, tariffs would likely have very little economic impact on Russia, since Russia exports very little to the United States overall, and very few products -- namely oil, metals, fish and fertilizers," he said in an interview.

Benoit said it also would make sense to take executive action and embargo "certain classes of products" from Russia.

Although the legislation proposes that the U.S. delegation to the WTO work to get other countries to agree to expel Russia from the organization, there is nothing in the charter that describes how a country would be expelled. According to a Politifact story, no country has ever been expelled from the WTO or the General Agreement on Tariffs and Trade (GATT) before it.