When the Russian steel company Severstal broke ground on a $550 million expansion of its plant last November in Columbus, Miss., the state’s newly elected governor, Republican Phil Bryant, showed up for the grand opening.
For Bryant, there was something to celebrate: a high-tech plant that provides work for more than 650 employees.
As part of his quest to expand Mississippi’s economy, Bryant is banking on doing more business with Russia, hoping to capitalize on a proposed trade pact with the ninth-largest economy in the world.
But he and other trade backers will have to wait: Even though the agreement has won bipartisan backing, it’s stalled on Capitol Hill, with congressional leaders refusing to allow a final vote.
Supporters are counting on the deal to win final approval when members return to work for a lame-duck session after the elections next week.
Many companies with a presence in Mississippi already have benefited from their ties with Russia, including Alcoa, Caterpillar, General Electric, Chevron and General Motors, according to the Coalition for U.S.-Russia Trade, which is promoting the pact.
According to the coalition, the chemical company BASF, which has a facility in Jackson, exported nearly $740,000 worth of zinc and chemicals to Russia in 2010. DuPont, which makes whitening agents at its plant in Pass Christian and agricultural chemicals at its factory in Pascagoula, has been exporting to Russia since 1974, supplying customers with a broad range of its chemical products. International Paper, which has an industrial packaging plant in Houston, Miss., sells its paper, packaging and market pulp to Russian customers, according to the coalition.
Led by agriculture products, Mississippi exports to Russia have more than tripled since 2007, increasing by 57 percent last year alone, according to the Coalition for U.S.-Russia Trade.
Despite the rapid growth, the state still has a long way to go to catch up to others. Mississippi ranked 29th among states in exports to Russia last year. Texas ranked first, followed by Illinois, California, New York and Washington, according to the Coalition for U.S.-Russia Trade.
“The Russian market presents a tremendous opportunity for U.S. manufactured-good exports from all states, including Mississippi,” said Lauren Airey, the director of trade facilitation policy for the National Association of Manufacturers. And with the United States facing slow economic growth, she said, “we have to do more to reach new markets to take full advantage of trade opportunities.”
If the pact is approved, Mississippi – already the fifth-largest exporter of poultry products in the United States – is expected to send more of its chicken and turkey products to the 140 million consumers in Russia.
“Poultry is our No. 1 ag commodity in terms of value, and creating some new demand is never a bad thing,” said John Michael Riley, an agricultural economist with the Mississippi State University Extension Service. “Mississippi is very conservative, and so anytime you start talking about shipping stuff overseas, it’s hard to say how the state as a whole feels. But I would say the agricultural community would like to see something like this take place because it would open some doors.”
Bryant is among a bipartisan group of 15 governors – including Democrats Jerry Brown of California and Christine Gregoire of Washington and Republicans Nikki Haley of South Carolina and Nathan Deal of Georgia – who are urging President Barack Obama and Congress to approve the trade pact quickly, saying it could double U.S. exports to Russia from $11 billion last year to $22 billion in 2017.
If Congress doesn’t act, the governors said in a letter, U.S. traders can’t expand business in Russia and take advantage of that country’s recent entry into the World Trade Organization, which came this summer after 18 years of negotiations. They said that would give a big advantage to the more than 150 other countries that belong to the WTO.
The stalled pact is partly the result of election-year politics and worries that Russia hasn’t done enough to improve its record on human rights.
The environmental group Friends of the Earth opposes the deal, saying the Vladimir Putin regime “must not be rewarded” for its record on the environment, trade and human rights. U.S. steelworkers say the pact would do nothing to open the Russian market to more U.S. cars but would make it easier for U.S. automakers to move assembly facilities to Russia.
Earlier this year, Republican presidential candidate Mitt Romney called Russia the nation’s top geopolitical foe, but he and Obama back the trade pact. Romney said he’d support it only if it were tied to a plan to address human rights.