TO EXPLORE PERMANENT NORMAL TRADE RELATIONS FOR RUSSIA HEARING BEFORE THE SUBCOMMITTEE ON TRADE OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTH CONGRESS SECOND SESSION APRIL 11, 2002 Serial No. 107–64 Printed for the use of the Committee on Ways and Means ( U.S. GOVERNMENT PRINTING OFFICE 79–629 WASHINGTON : 2002 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A COMMITTEE ON WAYS AND MEANS BILL THOMAS, California, Chairman PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York E. CLAY SHAW, JR. , Florida FORTNEY PETE STARK, California NANCY L. JOHNSON, Connecticut ROBERT T. MATSUI, California AMO HOUGHTON, New York WILLIAM J. COYNE, Pennsylvania WALLY HERGER, California SANDER M. LEVIN, Michigan JIM MCCRERY, Louisiana BENJAMIN L. CARDIN, Maryland DAVE CAMP, Michigan JIM MCDERMOTT, Washington JIM RAMSTAD, Minnesota GERALD D. KLECZKA, Wisconsin JIM NUSSLE, Iowa JOHN LEWIS, Georgia SAM JOHNSON, Texas RICHARD E. NEAL, Massachusetts JENNIFER DUNN, Washington MICHAEL R. MCNULTY, New York MAC COLLINS, Georgia WILLIAM J. JEFFERSON, Louisiana ROB PORTMAN, Ohio JOHN S. TANNER, Tennessee PHIL ENGLISH, Pennsylvania XAVIER BECERRA, California WES WATKINS, Oklahoma KAREN L. THURMAN, Florida J. D. HAYWORTH, Arizona LLOYD DOGGETT, Texas JERRY WELLER, Illinois EARL POMEROY, North Dakota KENNY C. HULSHOF, Missouri SCOTT MCINNIS, Colorado RON LEWIS, Kentucky MARK FOLEY, Florida KEVIN BRADY, Texas PAUL RYAN, Wisconsin Allison Giles, Chief of Staff Janice Mays, Minority Chief Counsel SUBCOMMITTEE ON TRADE PHILIP M. CRANE, Illinois, Chairman E. CLAY SHAW, JR., Florida SANDER M. LEVIN, Michigan AMO HOUGHTON, New York CHARLES B. RANGEL, New York DAVE CAMP, Michigan RICHARD E. NEAL, Massachusetts JIM RAMSTAD, Minnesota WILLIAM J. JEFFERSON, Louisiana JENNIFER DUNN, Washington XAVIER BECERRA, California WALLY HERGER, California JOHN S. TANNER, Tennessee PHIL ENGLISH, Pennsylvania JIM NUSSLE, Iowa Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Ways and Means are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occur- rences are inherent in the current publication process and should diminish as the process is further refined. ii VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A C O N T E N T S Advisory of March 21, 2002, announcing the hearing .......................................... 00 WITNESSES United States Trade Representative, Hon. Peter Allgeier, Deputy United States Trade Representative ............................................................................... 00 U.S. Department of State, Hon. Alan P. Larson, Under Secretary for Eco- nomic, Business, and Agricultural Affairs, ........................................................ 00 Ad Hoc Committee of Domestic Nitrogen Producers, and CF Industries, Rob- ert Liuzzi ............................................................................................................... 00 American Farm Bureau Federation, and Michigan Farm Bureau, Wayne Wood ...................................................................................................................... 00 Cox, Hon. Christopher, a Representative in Congress from the State of Cali- fornia ..................................................................................................................... 00 Lantos, Hon. Tom, a Representative in Congress from the State of California . 00 NCSJ: Advocates on behalf of Jews in Russia, Ukraine, the Baltic States & Eurasia, Harold Paul Luks ............................................................................. 00 SPI Spirits, Ltd., and Greenberg Traurig, LLP, Richard A. Edlin ...................... 00 U.S.-Russia Business Council, and Boeing Co., Hon. Thomas R. Pickering ....... 00 SUBMISSIONS FOR THE RECORD Bethlehem Steel Corp., Bethlehem, PA; National Steel Corp., Mishawaka, IN; and United States Steel Corp., Pittsburgh, PA, joint statement ............... 00 International Paper, Lyn M. Withey, letter .......................................................... 00 National Cattlemen’s Beef Association, statement ............................................... 00 Russian Federation to the United States of America, His Excellency Yuri V. Ushakov, Ambassador, statement .................................................................. 00 U.S. Chamber of Commerce, R. Bruce Josten, letter ............................................ 00 UCSJ: Union of Councils for Jews in the Former Soviet Union, Micah H. Naftalin, statement and attachment .................................................................. 00 iii VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A TO EXPLORE PERMANENT NORMAL TRADE RELATIONS FOR RUSSIA THURSDAY, APRIL 11, 2002 HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON TRADE, Washington, DC. The Subcommittee met, pursuant to notice, at 10:05 a.m., in room 1100 Longworth House Office Building, Hon. Philip M. Crane (Chairman of the Subcommittee) presiding. [The advisory announcing the hearing follows:] (1) VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A 2 ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS Subcommittee on Trade FOR IMMEDIATE RELEASE Contact: (202) 225–1721 March 21, 2002 No. TR–8 Crane Announces Hearing on Trade to Explore Permanent Normal Trade Relations for Russia Congressman Philip M. Crane (R–IL), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing to explore whether to graduate Russia from the Jackson-Vanik provisions, and extend Permanent Normal Trade Relations (PNTR), and to assess U.S.-Russian trade relations. The hearing will take place on Thursday, April 11, 2002, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m. Oral testimony at this hearing will be from both invited and public witnesses. In- vited witnesses will include representatives from the U.S. Department of State and the Office of the United States Trade Representative. Also, any individual or organi- zation not scheduled for an oral appearance may submit a written statement for consideration by the Committee or for inclusion in the printed record of the hearing. BACKGROUND: Russia’s trade status remains subject to Title IV of the Trade Act of 1974, includ- ing the Jackson-Vanik freedom of emigration provisions. Russia was first extended normal trade relations in 1992 under a waiver from the Jackson-Vanik emigration requirements. Since 1994, the President has found Russia to be in full compliance with the emigration criteria; however, the country’s trade status remains condi- tioned upon annual compliance determinations by the President. The compliance de- terminations are vulnerable to a resolution of disapproval by Congress. There has not been an annual vote in Congress on Russia’s trade status because no Member of Congress has introduced a disapproval resolution. On December 20, 2001, Ways and Means Committee Chairman Bill Thomas, Subcommittee Chairman Phil Crane, and Rules Committee Chairman David Dreier introduced H.R. 3553 to terminate the application of Jackson-Vanik to Russia and thus grant PNTR to Russia. In announcing the hearing, Chairman Crane stated: ‘‘The Administration has placed a priority on forging a new relationship with Russia. As part of that effort, President Bush has personally indicated his interest in seeing Congress end trade restrictions on Russia. At this hearing, the Subcommittee will examine the impact that such action would have on U.S. interests.’’ FOCUS OF THE HEARING: The hearing will explore the prospects and implications of granting PNTR to Rus- sia at this time, the status of U.S.-Russian trade relations, the status of Russia’s World Trade Organization accession, and Russia’s record in complying with the stat- utory requirements of the Jackson-Vanik provisions. DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD: VerDate Apr 17 2002 00:23 May 18, 2002 Jkt 079629 PO 00000 Frm 00006 Fmt 6633 Sfmt 6621 E:\HR\OC\A629A.XXX pfrm15 PsN: A629A 3 Requests to be heard at the hearing must be made by telephone to Traci Altman or Bill Covey at (202) 225–1721 no later than the close of business, Thursday, March 28, 2002 The telephone request should be followed by a formal written re- quest faxed to Allison Giles, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515, at (202) 225–2610. The staff of the Subcommittee on Trade will notify by telephone those scheduled to appear as soon as possible after the filing deadline. Any questions concerning