News

    Cold War Era Legislation Could Hinder US-Russia Trade

    US President Barack Obama (R) talks to 'super committee' Democrat co-chair Senator Patty Murray (L) and "super committee" member Senator Max Baucus (D-MT) in Washington. (File Photo - November 21, 2011)
    US President Barack Obama (R) talks to 'super committee' Democrat co-chair Senator Patty Murray (L) and "super committee" member Senator Max Baucus (D-MT) in Washington. (File Photo - November 21, 2011)

    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.

    Jackson-Vanik amendment

    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.”

    Economic impact

    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 standards.

    Most trade experts agree that Jackson-Vanik should be repealed as soon as possible.

    “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.”

    Business

    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 said.

    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 granted PNTR.”

    Caution suggested

    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 the matter.

    “While 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 American businesses.”

    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.

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora