Cold War Era
Legislation Could Hinder US-Russia Trade
Andre de Nesnera
March 21, 2012
A relic of the Cold War era between
the United States and Soviet Union could soon be an obstacle to
improving trade between the U.S. and Russia, experts say.
The relic in question is known as “the Jackson-Vanik amendment,” which
Congress passed as a modification to the 1974 Trade Act that regulated
commerce between the United States and nations that were then controlled
by communist governments.
Under Jackson-Vanik, Washington could not establish normal trade
relations with another country unless that country granted its citizens
full and unrestricted rights to emigrate. At the time, the Soviet Union
and its Warsaw Pact allies severely restricted emigration.
“Congress initially passed the law in response to the Soviet Union’s
emigration restrictions, particularly with respect to its Jewish
citizens,” Sen. Max Baucus, chairman of the Senate Finance Committee,
said during a recent hearing. “Jackson-Vanik served its purpose. It
helped millions of Jews emigrate freely.”
“But it is now a relic of the past,” Baucus said. “Every president,
regardless of political party, has waived Jackson-Vanik’s requirements
for Russia for the past 20 years.”
The Obama administration agrees, saying U.S. businesses will suffer
unless Congress repeals Jackson-Vanik. Repeal would open the way for
U.S. companies to continue doing normal business on a permanent basis
with Russia, which is expected to become a full member of the
Geneva-based World Trade Organization (WTO) this year.
The WTO, which oversees the rules of international trade, approved
Russia’s membership application last December and trade experts expect
Moscow to ratify the agreement by July.
As a full WTO member, Moscow must agree to a series of trade rules,
including a ceiling on tariff levels imposed on imported goods and the
protection of intellectual property. In addition, Russia will have to
amend its economic and trade laws to make them conform to international
Most trade experts agree that Jackson-Vanik should be repealed as soon
“First, it applies to a country that no longer exists - the Soviet
Union,” Anders Aslund, a Russia expert with the Peterson Institute for
International Economics, told VOA. “Secondly, the problem in question is
emigration and that has not been a problem for many years.”
Thirdly, adds Aslund, if the Jackson-Vanik amendment is not repealed,
tariffs on Russian goods to the United States could increase to 50
percent, severely curtailing, if not ending, all Russian exports to the
United States. U.S. exports to Russia would also be greatly affected, he
U.S. business leaders are closely watching the issue. They say their
business in Russia will suffer unless Moscow is granted “permanent
normal trade relations,” or PNTR, with the United States. This trade
status can be granted only after Jackson-Vanik is revoked.
“Russia has committed upon accession (to WTO) to significantly reduce
its tariffs on imported agricultural equipment, from 15 percent to five
percent,” Sam Allen, chairman of Deere and Company, told a recent
congressional hearing. “However, it is likely that Russia would not
extend the lower tariff rates to the U.S.-made products until it is
But while American businesses are calling for the swift repeal of the
amendment, others are urging caution.
One of those is Sen. Jon Kyl, who recently addressed his colleagues on
emigration may no longer be the issue, Russia’s blatant disregard for
human rights and the rule of law is every bit as relevant today as it
was decades ago,” Kyl said. “Human rights cannot be divorced from the
discussion of our economic relationship with Russia, particularly since
some of the most egregious cases of abuse involve citizens exercising
their economic and commercial rights.”
Kyl also says Russia is moving away from international norms and values.
“In recent months, Moscow has not only blocked United Nations Security
Council action on Syria, but has continued to sell arms to Assad’s
regime, which is responsible for the slaughter of innocent citizens,”
the Arizona Republican said. “This is not a government that can be
trusted to uphold its international commitments or give a fair shake to
Kyl concluded that there was no need to consider repealing the Jackson-Vanik
amendment anytime soon, adding that a thorough examination of
U.S.-Russia relations was needed first.