Following Russia’s invasion of Ukraine last week, U.S. Representative Lloyd Doggett, Chair of the House Ways and Means Health Subcommittee, and U.S. Representative Earl Blumenauer, Chair of the House Ways and Means Trade Subcommittee, have announced their intent to introduce legislation that would end Permanent Normal Trade Relations with the Russian Federation and would initiate a process to formally deny Russia access to the World Trade Organization.
“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,” said Rep. Doggett.
“The United States must use every tool at our disposal, short of armed conflict, to protect Ukraine’s independence. Putin’s unprovoked and unprecedented actions warrant a proportional response that includes terminating PNTR and denying it WTO membership,” Blumenauer said, adding that “Putin and his cronies should not be insulated from the consequences of their unjustified actions.”
That sentiment was echoed by Doggert who said “[a]s 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.”
The proposed legislation would remove most favored nation trade treatment for Russian imports by terminating PMTR, which had been granted in 2012 after Russia completed its 19-year accession to the WTO. Such a move would give the Biden administration more options to impose tariffs or other trade barriers on Russian products. However, Russia is a relatively small trading partner for the U.S., with two-way goods trade totaling just $28 billion in 2019, according to the Office of the U.S. Trade Representative.
The bill also directs the President to “use the voice, vote, and influence of the United States at the WTO to seek the suspension of the Russian Federation’s membership in the WTO.” It is unclear, though how such action would be accomplished in the absence of a formalized process for suspending membership. It could, of course, be argued that Russia is no longer meeting its fundamental obligations under the WTO—or that Putin’s genocidal war justifies the imposition of extreme measures that would otherwise violate the organization’s rules.
In an article advocating for the U.S. and its allies to end normal trade relations with Russia, GW professor Susan Ariel Aaronson points out that the trade agreement’s architects “recognized that there are times when nations must breach the rules to achieve essential domestic policy goals or to protect national security. Hence it provided member states with two outs—temporary waivers or exceptions under the rules.”
In a statement yesterday outlining next steps to hold Russia accountable for its invasion, Senate Finance Committee Chair Ron Wyden said “we need to make sure tariff treatment of Russia reflects its pariah status” and that removing trade relations “will raise tariffs on Russian goods and send a message that unprovoked invasions of a foreign nation will not be tolerated in any arena.”