Russia Legislation No Longer Removes PNTR, Trade Subcommittee Chair Says
House Ways and Means Trade Subcommittee Chairman Earl Blumenauer said that although the House will vote to endorse the administration's decision to ban oil, natural gas and coal imports from Russia, ending Russia's normal trading status will not be part of the legislation. He said he expects a vote before House Democrats leave for a retreat at noon on March 9.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Blumenauer, D-Ore., who spoke with reporters on a conference call March 8, said that even though Canada has already removed Russia from most favored nation status, at this point, the House wants to move in concert with the administration, which wasn't comfortable with the language around permanent normal trade relations (PNTR). "I’m perfectly willing to cut them some slack as they work this through," he said.
"This legislation is not all I would like it to be," he acknowledged. But, he said, he will continue to work on legislation to move Russian imports into Column 2 of the Harmonized Tariff Schedule. He said his staff had not estimated how much that would hike tariffs. Platinum and fertilizer, two of the major imports from Russia, don't have tariffs in Column 2. Oil, natural gas and coal made up more than half of Russia's $16.9 billion in exports to the U.S. in 2020.
"Other than petroleum imports, we don’t do that much business with Russia," Blumenauer said, but removing most favored nation tariffs would illustrate to them that there were consequences to the invasion. "Is it going to break their back? No. But it is a signal that nothing is off limits, and that we’re going to continue moving in that direction," he said.
He said that while some in Congress are talking about a total ban on imports from Russia, he would prefer to leave that option in reserve. "I think there are advantages to moving one step at a time," he said.
A bipartisan, bicameral agreement on legislation on removing PNTR was also going to include conditions under which Russia could be restored to normal trading status. Blumenauer said Congress will work on how to write those conditions with the administration, and declined to say what conditions they had been thinking of.
"Frankly, the last thing on my mind right now is how to ramp them down," he said. "In the short term, that's not something I personally think we need to spend lots of time and energy on -- it's something that the administration looks at, because they have to administer these things. From my perspective, it's more important to get the most robust set of actions out as soon as we can do so, and we'll have plenty of time to figure out how to fine-tune and dial back. I long for the day when that's a challenge we have because they're starting to behave responsibly."
House Majority Leader Steny Hoyer, D-Md., speaking earlier that day on a press call, said America needs to speak with one voice on what the off-ramp would be for the economic punishments imposed by the government. "Obviously, we want to stop the fighting, and we want to get Russian troops out of Ukraine, including Donbas," he said, referring to an area of eastern Ukraine that has been rebelling against the central government for years, with encouragement from Russia. Hoyer said Russia withdrawing from Crimea would be "a return to normalcy," but he acknowledged that policymakers may want to draw the off-ramps more narrowly "if we want to get the violence stopped, if we want to get the killing stopped."
Although the bill will not touch on tariff treatment, it will instruct the U.S. trade representative to work on getting Russia expelled from the World Trade Organization. Blumenauer said work at the WTO is slow and cumbersome, and changing PNTR would be more effective, but including that element is still another message to Russia about how what it's done is outside the pale.