The Biden administration should take additional trade actions – including naming Russia a nonmarket economy (NME) – to put pressure on Russian President Vladimir Putin and his allies amid Russia’s invasion of Ukraine, Sen. Rob Portman (R-Ohio) said March 21 in a speech on the Senate floor, as reported by Bloomberg.
“The Commerce Department should reclassify Russia as a nonmarket economy, making it easier to bring unfair trade cases against them,” said Portman, who is also the former U.S. Trade Representative. “It is appropriate to reclassify them, because up to 70 percent of their economy is now run by the government.”
DOC last fall was asked to reclassify Russia as an NME, but relented after pressure from a Russian delegation, Portman contended.
DOC launched the market economy status investigation at the end of July 2021 as a result of antidumping and countervailing investigations into Russian imports of UAN. The U.S. International Trade Commission last August found a “reasonable indication” that such imports are materially injuring the domestic industry. But the agency decided last October to retain Russia’s market economy status.
In light of Russia’s invasion of Ukraine, DOC should “reconsider that decision and ensure that Russia is reclassified as a nonmarket economy,” Portman said, noting that several countries, including China and Belarus, are already classified as NME economies.
“This means these countries don’t have a free market,” Portman said. “Instead, they have policies that restrict the flow of capital, involve government in the running of the economy, and don’t allow wages to be set in free bargaining between labor and management. When a country is a nonmarket economy, it means our trading forces have an easier time being tougher on those countries when they sell products here that are unfairly priced. It’s time to do it.”
Russia gained market economy status from the U.S. in 2002 (GM June 10, 2002), much to the chagrin of some members of the U.S. fertilizer industry, who argued the revocation might make it harder to use antidumping laws to counteract import surges from Russia. The Ad Hoc Committee of Domestic Nitrogen Producers (CDNP), in particular, voiced strong objections to the revocation (GM March 25, 2002).
Additionally, the ITC should “bring the full might of U.S. trade remedy law to bear on Russian companies,” Portman said. He noted that he and Finance Committee colleague Sherrod Brown (D-Ohio) last week sent a letter to the agency on the matter.
“Given Russia’s behavior, including its manipulation of trade flows in pursuit of maligned strategic objectives and exceptional involvement of the state in the domestic economy, we asked the commission to take these into account in cases involving Russia when they violate our trade laws,” Portman said.
Access to U.S. markets is a “privilege, not a right,” Portman said. “The urgency of the moment means we have to find a way to stop preferred access to our market,” he said. “Let’s do it this week.”