ANALYSIS: Jackson-Vanik trade curbs still in place for Ukraine (04/17/05)

ANALYSIS

Jackson-Vanik trade curbs still in place for Ukraine

by Robert McMahon
RFE/RL Belarus and Ukraine Report

The U.S. Congress passed the Jackson-Vanik amendment 31 years ago as a measure aimed at permitting the emigration of Jews from the Soviet Union. In that context, it was extraordinarily successful. But long after the collapse of the Soviet Union, it has remained in force for a number of former Soviet states, preventing them from gaining permanent normal trade relations with Washington. Its importance has resurfaced this month as U.S. and Ukrainian officials move to strengthen ties. Ukraine appears ready to join a dozen other former communist states freed from its restrictions.

U.S. Sen. Henry Jackson and Rep. Charles Vanik sponsored their measure in 1974 as a response to severe restrictions the Soviet Union had placed on the emigration of its citizens.

The Jackson-Vanik amendment conditioned certain trade benefits on criteria related to free emigration from non-market economy countries. It proved particularly effective in freeing up the emigration of Soviet Jews.

Most states have now met the free-emigration criteria. The formal lifting of the measure has become part of a rite of passage for reformist countries of the former Soviet bloc.

The latest case up for serious review in the U.S. Congress is Ukraine.

President Yushchenko, addressing a joint meeting of Congress on April 6, appealed for the lifting of the measure as part of a string of economic gestures toward his country.

"Members of Congress, I'm calling on you to lift the Jackson-Vanik amendment, to make this step towards Ukraine," he said. "Tear down this wall."

The United States routinely gives Ukraine and a number of other states (including Belarus, Turkmenistan, Azerbaijan, Kazakstan, Moldova, Russia, Tajikistan and Uzbekistan) yearly waivers exempting them from the measure. But these states still lack permanent normal trade relations, seen as inhibiting foreign investment, long-term contracts and membership in the World Trade Organization.

Latvia, Lithuania, Estonia, Armenia, Georgia, Kyrgyzstan and four Eastern European states have been "graduated" out of the measure over the last 15 years.

There have been mounting calls to add Ukraine to this group. However, some in the U.S. Congress have sought to maintain the measure as a lever to improve Ukraine's performance in intellectual-property protection. Similarly, Russia has sought normalized trade relations, but a dispute over restrictions on U.S. poultry imports has stalled that initiative.

Some supporters of the Jackson-Vanik amendment are now calling for it to be phased out.

One such person is Michael McFaul, a senior fellow and Russia expert at the Hoover Institution, a research body based in the United States. He told RFE/RL the Jackson-Vanik amendment achieved its intended effect and has now become distorted in practice.

"I think it is important to be tough on the Ukrainians on intellectual property law that they do not enforce and on the Russians that have tariffs that we think are unfair. But what I don't think is proper is to link that to legislation that was designed for another purpose," Dr. McFaul stated.

The measure is widely considered a great success. More than 1.5 million Jews are estimated to have emigrated to the United States and Israel since the amendment took effect. But its continued application could raise questions about U.S. abuse of the procedure.

Paul Saunders is the director of the Nixon Center, a Washington-based policy institute. He said that, especially in Russia, failure to lift restrictions related to the amendment is breeding cynicism.

"It can create an impression among some people that we don't live up to our commitments or that, alternatively, that we're just trying to maintain any kind of leverage that we can use against other people whenever we need it for whatever political reason we decide to use at the time," Mr. Saunders said.

The U.S.-funded Congressional Research Service said in a recent report that the amendment is unlikely to be repealed any time soon.

The report's author, trade specialist Vladimir Pregelj, told RFE/RL that Congress has so far indicated its intent to maintain the measure as a trade lever, even while it individually removes countries from its restrictions.

"I think the Congress would prefer to stick on this country-by-country termination [rather] than a wholesale repeal of the Jackson-Vanik amendment," Mr. Pregelj said.

Mr. Pregelj said there are currently six bills in the U.S. Congress aimed at removing Ukraine from the amendment's restrictions.

After a meeting with the Ukrainian president on April 4, U.S. President George W. Bush vowed to lift the restrictions. In addition, the U.S. Senate, as part of a foreign aid bill, this week was considering an amendment to normalize trade relations with Ukraine.

Robert McMahon is a contributor to RFE/RL Newsline.

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