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The Next Round on Jackson-Vanik
Some twenty years after the collapse of the Soviet Union, the U.S. Congress is finally ready to consider eliminating a Cold-War era trade provision that is still being applied to Russia. The Jackson-Vanik amendment to the 1974 trade law linked normal trade relations to free emigration in non-market economies. Today Russia is neither a non-market economy nor does it restrict emigration, yet Congress has thus far, despite the calls of three successive presidents, refused to consider graduating Russia from the provisions of this amendment. It is time for a change of course.
Those reluctant to graduate Russia have valid concerns—after all, the Russian government’s human rights record is under constant attack. But maintaining Jackson-Vanik restrictions on Russia is simply the wrong response to these concerns. At best, Jackson-Vanik is completely ineffectual in promoting human rights and rule of law in Russia. At worst, it is counter-productive.
The Obama administration’s top trade priority this year is getting Russia graduated from Jackson-Vanik, and timing is crucial. When Russia formally joins the World Trade Organization (WTO) later this year, the United States will be in violation of WTO rules because Jackson-Vanik attaches conditions to the U.S.-Russia trade relationship. This means that American businesses will be at a disadvantage in Russia because the carefully negotiated reduced tariffs will not be extended to U.S. goods and services.
The administration faces an uphill battle in Congress—both Democrats and Republicans have objections to granting Russia permanent normal trade relations (PNTR). Those objections are both economic (intellectual property concerns, market access) and political (commitment to rule of law, respect for human rights). Human rights proponents fear that graduating Russia from Jackson-Vanik would deprive the U.S. of leverage over the Russian government. But Russia has been determined to be in full compliance with Jackson-Vanik every year since 1994, so it currently provides no sanctions on Russia. It could only do so should the Russian government abandon the free-market and start restricting emigration.
Practical considerations aside, the Jackson-Vanik amendment has been mythologized as a piece of legislation that has advanced the cause of human rights and allowed hundreds of thousands of Soviet citizens to leave. But its record is decidedly mixed. Rather than being responsible for freeing countless Jewish and other emigrants from the Soviet Union, the amendment may actually have resulted in thousands of would-be emigrants being denied exit visas.
Emigration numbers varied considerably during the Cold War as Soviet citizens wishing to emigrate became pawns to the U.S.-U.S.S.R. relationship. Immediately after the amendment came into force, emigration from the Soviet Union dropped by 35 percent. Numbers slowly climbed, reaching a pre-collapse peak in 1979 of 51,320. But the next year, emigration declined by 58 percent as the Soviet government sharply decreased the number of exit visas issued. At the very least, this is a decidedly mixed record.
The expectation that Jackson-Vanik would provide some leverage on Soviet human rights practices was not unreasonable. The Soviet Union was eager to build a stronger trade relationship with the United States and mounted a lobbying effort to try to ensure that the amendment was not passed by Congress. General Secretary Leonid Brezhnev met with several Senators in the Kremlin and with more Senators in the Blair House on a June 1973 trip to Washington. The expectation was that the Soviet Union’s economic needs would outweigh its desire to keep dissidents from emigrating. This expectation, however, was not borne out.
Despite Jackson-Vanik’s questionable achievements, it is currently all that the U. S. has in terms of legislation to try to pressure the Russian government to improve its record. But rather than rely on an outdated and ineffective tool, human rights advocates, including those in Congress, should work with the administration to expand the arsenal of effective policy options to address Russia’s backsliding on democratization and human rights. The U.S. government, no matter which party is in control, is going to be concerned about human rights. The Russian government does not like this, but it is clearly an important dimension of U.S. foreign policy.
Both the House and Senate have introduced “replacement” human rights legislation to address ongoing concerns in Russia. The proposed legislation is a response to the death of 37-year-old Russian lawyer Sergei Magnitsky, who was killed in pretrial detention in 2009. A surprising coalition of Republicans and Democrats would like to link Russia’s graduation from Jackson-Vanik to passage of a Magnitsky bill, which would impose a visa ban on 60 Russian officials linked to Magnitsky’s death.
But the Obama administration has declined to support a Jackson-Vanik for Magnitsky quid pro quo. U.S. Ambassador to Russia Michael McFaul recently branded this a “weird linkage” and dismissed the notion that “somehow holding Jackson-Vanik is going to make Russia more democratic or help us with Syria."
Some of the most prominent members of the Russian opposition movement have taken a clear stand on Jackson-Vanik, strongly questioning its linkage with current human rights concerns. “At the end of the day, those who defend the argument that Jackson-Vanik’s provisions should still apply to Russia in order to punish Putin’s anti-democratic regime only darken Russia’s political future, hamper its economic development, and frustrate its democratic aspirations,” their recent joint statement declared. “We, leading figures of the Russian political opposition, strongly stand behind efforts to remove Russian from the provisions of the Jackson-Vanik Amendment. Jackson-Vanik is not helpful in any way -- neither for promotion of human rights and democracy in Russia, nor for the economic interests of its people.”
Nonetheless, the opposition leaders advocate selective sanctioning of Russian officials complicit in human rights abuses and mention the Magnitsky legislation by name. The State Department, however, has already instituted a visa ban on some officials believed to be linked to Magnitsky’s death, and it argues that the new legislation would mandate investigations of assets of Russian officials that would be difficult to carry out. There are also concerns that provisions of the Magnitsky bills are illegal (such as not providing an appeal mechanism for those sanctioned) or of dubious precedent (punishing people who have not been found guilty of a crime). The administration is also concerned that the Russian government would retaliate against the Magnitsky legislation by withholding cooperation on Iran, the Northern Distribution Network to Afghanistan and other strategically important areas.
A Jackson-Vanik for Magnitsky quid pro quo could end up trading one piece of ineffective legislation for another. Still, the administration is going to have to give something to get Congress to agree to graduate Russia from Jackson-Vanik—it is, after all, an election year and Russia is a popular target, especially after its recent actions vis-à-vis Syria. In anticipation of having to put more substance to its human rights efforts, in October the administration submitted a congressional notification for the creation of a civil society fund to provide long-term support for Russian NGOs—but no further action has been taken.
Critics of Russia view Russia’s unconditional graduation from Jackson-Vanik as a sign of weakness on the part of the United States and a victory for Russia. But even most major U.S. Jewish groups, who strongly supported the amendment’s creation, have also come out in favor of repealing Jackson-Vanik. And now it is the United States, not Russia, who will bear the cost of keeping Jackson-Vanik on the books—to the tune of some $9 to $10 billion annually in unrealized benefits from Russia’s WTO accession. Rather than linking human rights to trade, human rights should be promoted as important in its own right, and the U.S. should develop a whole arsenal of tools that are more substantive than symbolic.
Jacqueline McLaren Miller is a Senior Associate in EWI's Strategic Trust-Building Initiative, where she runs the U.S. and WMD programs.