Giving up Jackson-Vanik

The U.S. House of Representatives has repealed the Jackson-Vanik amendment, but has adopted in its place the “Magnitsky List.” The Senate vote could take place by the end of November, and Obama could approve the bill before the end of this year.

It was mentioned previously that the Jackson-Vanik amendment, which interferes with trade relations between Russia and the U.S., would be repealed after the U.S. election.

The Jackson-Vanik amendment was introduced into the U.S. Trade Act in 1974. It restricts trade with nations that prevent emigration or violate other human rights. The amendment was proposed by congressmen Henry Jackson and Charles Vanik, and targeted the Soviet Union. But when the USSR collapsed, the amendment was not repealed. Although the U.S. has, since 1989, extended a moratorium on applying the amendment with respect to Russia, the fact still remains: the amendment persists unaltered to this day.

In August, Russia joined the World Trade Organization and the matter of abolishing the Jackson-Vanik amendment resurfaced on the agenda. The issue stems from the fact that the fixed World Trade Organization trade rules cannot be applied in Russia-U.S. trade precisely because of the Jackson-Vanik amendment. In other words, the amendment is incompatible with World Trade Organization rules.

Therefore it is no coincidence that at this past year’s G-20 summit in Los Cabos, U.S. President Barack Obama assured his Russian counterpart, Vladimir Putin, that the repeal of the Jackson-Vanik amendment was a top priority for the U.S. administration.

“Our commodity circulation is at a lower level than it could be,”* said Obama at the summit.

In March, Obama was already urging Congress to repeal the amendment, arguing that with Russia’s induction into the World Trade Organization, American companies could suffer as a result of the Jackson-Vanik amendment.

However, Russian experts initially speculated that the U.S. would simply replace the Jackson-Vanik amendment with other measures. Department Head and professor at Lomonosov Moscow State University Andrey Khazin, in particular, expressed this opinion in Aktualnye Kommentarii.

“In tandem with the repeal of the Jackson-Vanik amendment, for it will be repealed quite soon, I believe that some sort of discriminatory measures — to a greater extent political, than economic — will be taken against Russia,” said Khazin in an interview with Aktualnye Kommentarii.

According to him, it is still too early to speak of perfect relations between Russia and the U.S.

Expert Maxim Mineav of the Civil Society Fund also noted that the U.S. would not be eradicating all of the current restrictions. In an interview with Aktualnye Kommentarii, he suggested that the Jackson-Vanik amendment would not be unilaterally repealed, but rather, its removal would most likely be linked with the adoption of the Magnitsky Act. “There’s no use in hoping that the Americans will undertake the long-awaited removal of the Jackson-Vanik amendment without some sort of additional action,” concluded Maxim Minaev.

American congressman Brady, as reported by the media, has confirmed that the majority of congressmen believe that in the place of the repealed Jackson-Vanik amendment, an alternate “legislative mechanism to ensure respect for human rights in Russia” is necessary.

Let us recall Hermitage Fund employee Sergei Magnitsky, who was accused of various financial crimes and died in custody in November 2009. This resonated strongly both in Russia and in the West.

As a result of this, American senator Benjamin Cardin has drafted a bill that would impose sanctions upon those officials who are, in his opinion, responsible for Magnitsky’s death. Specifically, the bill proposes to prohibit entry into the U.S. for a number Russians allegedly involved in the death of Magnistsky. It further proposes to freeze their U.S. bank accounts.

Moscow responded with a categorical refusal to accept the proposal — more like an ultimatum — of the American senators. Russia will not accept the replacement of the Jackson-Vanik amendment with some other legislative act, stated Russian presidential aide Arkady Dvorkovich.

*Editor’s Note: This quote, while correctly translated, could not be verified.