CQ TODAY ONLINE NEWS
June 15, 2012 – 10:07 p.m.
Organized Labor Quiet in Russia Trade Debate
By Joseph J. Schatz, CQ Staff
The Obama administration’s effort to lift Cold War–era trade restrictions on Russia faces plenty of hurdles, but opposition from organized labor so far is not one of them.
That’s a change from many other trade-liberalization efforts over the past two decades, including laws lifting the Jackson-Vanik amendment restrictions for China and Vietnam. The business community pushed those measures to enactment despite stiff resistance from organized labor groups, which were concerned about the treatment of labor unions in those countries and the effect that outsourced manufacturing would have on U.S. workers.
The labor community views Russia as far less of a threat to manufacturing jobs than China and has been more circumspect about the bid to create permanent normalized trade relations with the country. The AFL-CIO, for instance, has raised concerns about human rights and labor rights but is not formally opposing the effort to normalize trade ties.
Human rights and broader concerns about Moscow, including its alleged support for the Syrian government in its crackdown on dissidents, are sure to feature prominently as both the House Ways and Means and the Senate Finance panels hold hearings this week on the administration’s initiative.
Amid cheers from the business community, Finance Chairman
But election year tensions are likely to slow things down.
Many Senate Republicans are reluctant to move quickly on the issue, citing a range of economic and other concerns about Russia. And House Republicans, many of whom adamantly oppose Russian President Vladimir Putin and his policies, are decidedly lukewarm on the issue, putting them at odds with the GOP’s usual allies in the business community.
Ways and Means Chairman
Russia’s WTO Entry Is Incentive
The main driver behind the bid to normalize trade relations is Russia’s entry this summer into the World Trade Organization. If Congress does not lift the Jackson-Vanik provisions, the White House warns, U.S. companies will fall behind businesses from other countries, and will be unable to take advantage of WTO dispute-settlement mechanisms.
Supporters are looking for the business argument to carry the day. And the labor community’s relative silence means that there is little opposition to the underlying Jackson-Vanik bill, Business Roundtable President John Engler told reporters last week.
Celeste Drake, a trade policy specialist at the AFL-CIO, said in May that the union is studying the issue and waiting for input from its affiliates, noting that there could be benefits and drawbacks for U.S. workers. “We think at this point it’s an open question, it’s not a definitive yes or no,” she said at a May event held by the Bipartisan Policy Center.
Weak Export Threat
Organized Labor Quiet in Russia Trade Debate
Labor officials believed that Jackson-Vanik gave them leverage in trade debates with China and Vietnam, but at this point they seem to see the law as an ineffective way of dealing with the concerns in Russia.
In a June 4 legislative alert, AFL-CIO government affairs head William Samuels said that because of international trade agreements, the U.S. “has lost much of its ability to unilaterally impose important economic tools, such as tariff increases or economic boycotts, to address serious human rights violations.”
The labor group instead is focused on the Magnitsky bill on its own, and Samuels cautioned that the AFL-CIO’s support for the Magnitsky bill does not imply support for or opposition to the trade bill itself.
Labor support for a trade deal can smooth the congressional approval process considerably. That was true of the South Korea trade deal, which was approved overwhelmingly last year, thanks to support from the United Auto Workers. The union backed the final deal, along with Ford Motor Co., even though the AFL-CIO opposed it. Ford has significant export and investment interests in Russia, and the company supports normalizing Russia trade ties. The UAW did not respond to requests for comment.
American businesses see Russia more as a target of market opportunity than a potential competitive threat. Unlike China, which saw exports boom from outsourced manufacturing work after the country joined the WTO in 2001, Russia is not expected to become a major exporter of anything beyond oil and energy resources any time soon.
“As a predominant commodity exporter and a much richer country than China, Russia’s cost level is too high to render the country competitive in most manufacturing exports,” Anders Åslund and Gary Hufbauer of the Peterson Institute for International Economics wrote in a recent book calling for normalized U.S. trade relations with Russia.