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Zoellick urges U.S. Congress act on Russia trade
By Doug Palmer
WASHINGTON, Feb 6 (Reuters) - U.S. Trade Representative Robert Zoellick on Wednesday urged Congress to end an irritant in trade relations with Russia dating from Cold War concerns about Soviet emigration policy.
In testimony before the Senate Finance Committee, Zoellick said lifting the 1974 "Jackson-Vanik" emigration measure would reflect the changed U.S.-Russia relationship since the collapse of the Soviet Union over a decade ago.
Under the provision, Russia must show it does not restrict emigration before it can gain "most-favored nation" tariff levels -- the levels for which most trade partners qualify. Without MFN status, tariffs would be about 10 times higher.
The provision has been an irritant in trade relations with Russia even though the United States has certified in recent years that Moscow has open emigration policies, and MFN status has been granted.
President George W. Bush first asked Congress in November to lift the restriction. Since then, there has been some activity on the issue in the U.S. House of Representatives, including a bill introduced by Ways and Means Committee Chairman Bill Thomas, a California Republican.
"The Russians are understandably sensitive about Jackson-Vanik, which places their trade relations with us in a different category," Zoellick said.
However, Senate Finance Committee Chairman Max Baucus, a Montana Democrat, has argued for retaining the measure until Russia is a member of the World Trade Organization.
That would give U.S. negotiators the most leverage in negotiating the terms of Russia's entry into the world trade body, Baucus said last month in a letter to Secretary of State Colin Powell.
Washington took that approach with China, which joined the WTO late last year after negotiating a comprehensive bilateral trade pact with the United States in 1999.
But Zoellick told the panel he thought a similar "course would be a mistake" in the case of Russia "and would work against U.S. commercial and foreign policy interests."
"To use Jackson-Vanik in this way would signal that we still treat Russia as a former foe, not a possible friend," Zoellick said.
Meanwhile, Zoellick suggested it could take many years of work until Russia is ready to join the world trade body.
"We hope to make progress this year and over the course of the president's first term (which ends in 2005) to try to get Russia into the WTO," he said.
WTO Director General Mike Moore gave a more optimistic time frame last month, saying Russia could join the WTO sometime in 2003.
Zoellick said the United States expected the WTO to produce a "first draft working party report" on Russia's accession by the end of March.
That will set the stage for further consultations with Russia and other trading partners on what Moscow needs to do to become a member of the WTO, he said.
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