Hatch Calls on Administration to Utilize all Available Tools to Ensure Russia Compiles with International Law

In Letter to Treasury Secretary Lew, Ambassador Froman Utah Senator Writes, “While I insist that the Administration begin using the tools already at its disposal with respect to Russia, I am also prepared to work with you, including through legislation, to give you further tools to bring pressure to bear on Russia, if necessary.”

WASHINGTON – In a letter today, Finance Committee Ranking Member Orrin Hatch (R-Utah), called on Treasury Secretary Jack Lew and U.S. Trade Rep. Michael Froman to fully utilize the tools at its disposal to demonstrate to Russia the importance of complying with its international obligations and offered to work with the Administration to put more tools at its disposal if necessary. Secretary Lew is scheduled to testify before the Senate Finance Committee tomorrow morning.

The text of the full letter is below:

As you are aware, I have been concerned about Russia’s failure to comport with standards of international law, propensity to use trade as a political weapon, and willingness to discriminate against U.S. imports. Unfortunately, Russia’s recent actions Ukraine stemmed, in part, from Russia’s use of in Ukraine only reinforce the point. The current situation in restrictions against Ukrainian imports as a reaction to the prospect of closer trade ties between Ukraine and the European Union. Russia even went so far as to target imports from specific companies that advocated for increased trade with the European Union (EU). This pattern of behavior continues today. One of the first retaliatory steps Russia took against the new Ukrainian government was to block imports of Ukrainian pork on the basis of vague and unsubstantiated sanitary and phytosanitary (SPS) issues. Similarly, over the weekend, Russia once again threatened Ukraine with higher prices on exported Russian gas. From banning Moldovan wine to blocking Lithuanian dairy products, Russia routinely uses trade restrictions as a political tool against its neighbors.

I have long believed that the Russian government does not view international trade as a shared and mutually beneficial partnership, but as an instrument for applying political pressure. That is one reason I was so deeply concerned that the Administration’s efforts to quickly graduate Russia from the Jackson-Vanik statute and grant Russia permanent normal trade relations (PNTR) was driven more by a desire to validate the so-called “reset policy” than economic considerations. Russia’s failure to protect and enforce intellectual property rights, and its use of sanitary and phytosanitary measures, import licenses, and automobile investment restrictions to discriminate against U.S. imports are further evidence of Russia’s disregard for international norms and the rule of law. As but one example, in February 2013 – barely two months after the United States granted Russia PNTR – Russia effectively halted imports of U.S. meat products, destroying what had been a $600 million per year market for U.S. exporters.

During the PNTR debate, I insisted that Congress take steps to ensure that the Administration acted to bring Russia into compliance with its international trade obligations. These steps included reporting requirements on enforcement actions by USTR where Russia failed to meet its WTO accession commitments, on Russian SPS measures, and on Russian progress in making commitments with regard to information technology products and government procurement. Congress also required USTR, the Department of State, and the Department of Commerce to increase efforts to support rule of law and civil society, bolster U.S. investor rights, and further anti-bribery efforts in Russia. While I appreciate yesterday’s decision by USTR to suspend trade-related talks with Russia, including with respect to the U.S.-Russian bilateral investment treaty, this Administration must do a better job utilizing the tools at its disposal to demonstrate to Russia the importance of complying with its international obligations.

Russia must be reminded that acting contrary to its obligations come at a cost. I have been, and will continue to, monitor Russia’s actions and how the Administration responds. While I insist that the Administration begin using the tools already at its disposal with respect to Russia, I am also prepared to work with you, including through legislation, to give you further tools to bring pressure to bear on Russia, if necessary.

I also look forward to working with you to support our international friends and allies. As you know, countries around the world are seeking to import U.S. Liquid Natural Gas (LNG). For many countries, particularly those on Russia’s periphery, U.S. LNG will help them to diversify their energy portfolio and reduce their dependence on those who use energy exports as a political tool. Moreover, LNG exports will create jobs and stimulate economic activity in the United States. I hope the Administration will finally come out in favor of increasing U.S. LNG exports, both for the good of our allies and for the good of the U.S. economy.

At your next appearance before the Committee, I intend to raise these issues, and I expect that you will be prepared to provide an update on the Administration’s efforts to improve Russia’s compliance with its international obligations. I also expect that you will be prepared to address why existing tools are not being fully utilized, and what further tools can be utilized to bring pressure to bear on Russia and bolster our friends and allies in the region.

Sincerely,

ORRIN HATCH

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