House Adopts Key Armenia Trade Measure

PERMANENT NORMAL TRADE RELATIONS PROVISION–SPEARHEADED BY REPS. KNOLLENBERG AND PALLONE–ADOPTED AS PART OF LARGER TAX BILL

WASHINGTON–DC – The House approved legislation today which would open the door to increased trade between the US and Armenia by providing permanent normal trade relations (PNTR) status to the Republic of Armenia–reported the Armenian National Committee of America (ANCA).

This legislation would ensure lower tariffs on Armenian imports to the US and give greater Armenian access to US government credit facilities on a permanent basis. The move comes less than a year after Armenia was approved for entry into the World Trade Organization.

"We want to thank Congressman Knollenberg for his tireless leadership in winning approval of the PNTR-Armenia legislation–and to express our appreciation to his Armenian Caucus Co-Chairman Frank Pallone and the many other legislators who made today’s victory possible," said ANCA Executive Director Aram Hamparian.

"Today’s action-fulfilling a long-standing Armenian Caucus legislative priority in the U.S. House-sets the stage for opening up new trade avenues for American and Armenian businesses and expanding the overall level of U.S. commercial relations with Armenia." Introduced on February 4th by Congressional Armenian Caucus Co-chairmen Joe Knollenberg (R-MI) and Frank Pallone (D-NJ)–H.R.528 received the support of over 110 members of Congress. Its companion bill in the Senate–S.1557–was introduced by Senators Mitch McConnell (R-KY)–Paul Sarbanes (D-MD)–and Barbara Boxer (D-CA) on August 1–and currently has 14 cosponsors.

In March–the Ways and Means Trade Subcommittee Chairman Phil Crane(R-IL) announced a 45-day public comment period about the measure and invited interested parties to submit letters regarding PNTR for Armenia. In its March 18th letter to Rep. Crane–Hamparian noted that: "In order for Armenia’s economic growth to continue and for its benefits to reach more people–Armenia needs to increase investment and trade. Armenia is dedicated to expanding its economic relationship with the United States–but–without PNTR–Armenia loses its ability to attract viable export markets in and investment from the United States. At the same time–without PNTR–American entrepreneurs who see Armenia as an emerging economy with potential for investment and trade hesitate to establish ventures that cannot be protected by WTO rules or to import Armenian goods at higher–non-MFN tariff rates."

The PNTR resolution language was adopted–yesterday–as part of HR 3521-the Tax Relief Extension Act of 2003-by a voice vote. The next step will be consideration of the measure by the full Senate.

During discussion leading up to the vote–PNTR original cosponsors Joe Knollenberg and Frank Pallone were joined by Rep. Phil English (R-PA) in enthusiastic support of the measure. Rep. Benjamin Cardin (D-MD) raised a number of concerns regarding democracy in Armenia. Ranking Member of the House Ways and Means Trade Subcommittee Rep. Sander Levin (D-MI)–noted a number of reservations about the process leading up to the adoption of the measure.

The Trade Act of 1974 excluded all Soviet countries from having normal trade relations (NTR) status with the United States. One provision of the Act–known as the Jackson-Vanick amendment–required the President to deny NTR to those countries that restricted free emigration. The policy was adopted–in part–in response to Communist government restrictions on the repatriation of Jews. According to the terms of the Jackson-Vanick amendment–when the President determines that freedom of emigration rights have been reinstated in a country–normal trade relations may be granted. To maintain NTR–the President must report to Congress twice a year that Jackson-Vanick requiremen’s have been met. While successive Presidents have waived the Jackson-Vanick Amendment restrictions on Armenia during the past decade–the passage of the Knollenberg bill–would grant Armenia permanent NTR (PNTR) status–without the need for bi-yearly Presidential determinations.

Permanent normal trade relations (PNTR) status ensures lower duties on Armenian imports to the US–creating incentives for increased trade and investment opportunities between the two countries. As such–the measure strengthens bilateral relations between the two countries and helps reinforce the enduring friendship between the American and Armenian peoples. Increased US-Armenia trade and investment also helps to offset the impact of the Turkish and Azerbaijani blockades–estimated by the World Bank at up to $720 million a year.

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