[Congressional Record Volume 152, Number 125 (Friday, September 29, 2006)]
[Extensions of Remarks]
[Pages E1976-E1977]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   WHY CONGRESS SHOULD TAKE A CLOSER LOOK AT RUSSIA'S WTO ACCESSION 
                                PROCESS

                                 ______
                                 

                          HON. DARRELL E. ISSA

                             of california

                    in the house of representatives

                       Friday, September 29, 2006

  Mr. ISSA. Mr. Speaker, as Congress leaves for the upcoming November 
elections, I would like to raise an issue that will gain more attention 
over the next few months--a U.S.-Russia bilateral agreement on Russia's 
membership in the World Trade Organization. As someone who is watching 
the U.S.-Russia WTO negotiations very closely with a keen interest in 
the outcome, I think it is important to acknowledge the obstacles that 
remain. While a successful U.S.-Russia WTO agreement can be imagined, 
the reality of the current situation is that both sides are still apart 
on key issues. I urge my colleagues to keep a watchful eye on these 
negotiations, which will have important consequences for U.S. 
industries, workers and consumers.
  Some say Russia has made progress in its actions, commitments and 
negotiations with the United States over the past year. However, both 
countries were unable to meet the goal of concluding WTO talks at the 
July Group of Eight meeting in St. Petersburg, Russia. The new goal for 
the completion of negotiations is when Presidents Bush and Putin meet 
at the November 2006 Asia Pacific Economic Cooperation (APEC) forum in 
Vietnam.
  The United States and the global community will ultimately benefit 
when Russia becomes a member of the World Trade Organization. Although 
Russia's economy in a developing stage in many respects, its economic 
progress since the end of the cold war and potential for growth are 
positive trends. The complete integration of Russia into the global 
economy is an important step that will help Russia and its trading 
partners. It will also help to support the continuation of positive 
U.S.-Russia relations.
  However, at this stage, significant obstacles to Russia's WTO 
accession remain and must be addressed. Russia's behavior in a number 
of areas and its lack of concrete commitments on important issues is 
contrary to the spirit of free trade and the WTO and must be reversed. 
In essence, the WTO is a set of rules and commitments and a forum for 
dispute resolution, factors that make it fundamentally different than 
most international organizations with extended bureaucracies. In this 
manner, these rules and commitments must be honored if the WTO is to 
have any meaning whatsoever.
  Russia is failing to uphold standards that many in the U.S., Europe 
and elsewhere believe are essential for WTO accession. The area of 
intellectual property is a prime example.
  Due in large part to Russia's failure to enforce its anti-piracy and 
intellectual property protection laws, 421-2 of my House colleagues 
joined me in passing a resolution in December 2005 (H. Con. Res. 230) 
that called on Russia to provide adequate and effective protection of 
intellectual property rights, or it risk losing its eligibility to 
participate in the Generalized System of Preferences (GSP) program and 
to ensure that intellectual property is securely protected in law and 
in practice to demonstrate that it can meet international commitments 
like the WTO.
  Earlier this year, House Ways and Means Chairman Bill Thomas (R-CA) 
and Ranking Democratic Member Charles Rangel (D-NY) as well as Senate 
Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member 
Max Baucus (D-MT) co-signed a letter to President Bush stating that 
they will not support Permanent National Trade Relations for Russia 
unless Russia takes definitive action to address current issues.
  In the energy sector, the Russian government's interference in the 
market and de facto renationalization of selected assets calls into 
question its commitment to free and fair trade. The Council on Foreign 
Relations, task force on Russia listed a number of disappointing trends 
in Russia's energy market, including ``the revocation of longstanding 
Exxon Mobil licenses for the Sakhalin natural gas fields and the 
destruction of the Yukos Oil company as part of a reassertion of state 
control over the energy sector.'' The report also mentioned the cut off 
of natural gas supplies to Ukraine in response to its pro-western 
orientation. With U.S. oil and natural gas prices reaching record 
highs, it is very important that we develop a tough, but open, energy 
trade policy with Russia.
  The United States remains concerned about access to the Russian 
banking, financial services and insurance markets, all of which are 
substantially restricted for foreign companies. The U.S. is advocating 
on the opening of bank branches, but Russia has repeatedly insisted 
that foreign banks be required to open a full subsidiary, not a branch, 
when entering Russia. In the insurance industry, Russia does not allow 
foreign insurance companies to underwrite and reinsure mandatory forms 
of insurance, including motor vehicles, health and government 
institutional insurance. Before Russia passed legislation in late 2003 
to expand foreign ownership to 25 percent, the EU had considered the 
Russian insurance industry essentially closed.
  According to the President's 2006 Trade Policy Agenda and 2005 Annual 
Report, the U.S. remains concerned about market access for poultry, 
pork and beef in the wake of a June 15, 2005 agreement with Russia. The 
issue of how the agreement is being implemented, specifically questions 
that a U.S. quota could be used by other countries, is currently under 
discussion.
  The United States is currently in the midst of its bilateral 
negotiations with the Russian Federation to agree to Russia's 
membership and participation in the World Trade Organization. The 
United States is one of only a few nations remaining that must conclude 
a bilateral WTO agreement before Russia formally accedes to the WTO.
  As this process continues, it is critical that Congress consider 
Russia beyond specific commercial issues and commitments on trade 
issues. Congress should consider that Russia's is regressing in its 
movement towards a more democratic society and free market

[[Page E1977]]

economy because both issues have important ramifications for our trade 
relationship.
  As a member of Congress who serves on the House Judiciary and 
International Relations Committees and Chairs the Energy and Resources 
subcommittee of the Government Reform Committee, I am engaged in the 
formulation of policy on intellectual property, U.S. foreign policy, 
and energy issues. Therefore, I see the U.S.-Russia trade relationship 
from a variety of perspectives. I also see the important relationship 
between market and democracy trends and Russia's WTO accession process.
  I urge my colleagues to pay attention to these larger trends, some 
which are disturbing, as you consider Russia's progress on WTO 
negotiations with the United States and the eventual consideration of 
the Jackson-Vanik legislation and granting of PNTR to Russia. Russia 
must be held accountable under a WTO agreement that protects free and 
fair trade.

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