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U.S. could feel effects of amendment meant to hurt Russia

CNN

Almost four decades ago, as the Cold War raged, the U.S. Congress passed an amendment to the Trade Act of 1974 aimed squarely at the Soviet Union’s policy preventing Jews from emigrating from the USSR.

The Jackson-Vanik amendment, which denied favorable trade relations to the Soviet Union, worked. In 1991, Russia stopped slapping exit fees on Jews who wished to emigrate and they have been free to leave ever since.

But the amendment has stayed on the books even though it has outlived its purpose, a Cold War relic that infuriated the Kremlin. In reality, it was only symbolic; since 1994, presidents, Republicans and Democrats have certified annually that Russia complies with the amendment. In fact, the U.S. maintains normal trade relations with Russia.

As part of its “reset” with Moscow, the Obama administration urged Congress to abolish the amendment, to “graduate” Russia from Jackson-Vanik. Now, there’s an economic reason to do it.

Last December, after 18 years of trying, Russia was given the green light to join the World Trade Organization. Russia’s Parliament is expected to ratify and approve entry, and President Vladimir Putin to sign it by the end of July. Once that happens, the Jackson-Vanik amendment could end up hurting the U.S. instead of Russia.

Having it on the books means the U.S. is in violation of WTO rules requiring all members to grant other members “immediate and unconditional free trade.” The U.S. would not be able to take advantage of all the concessions Russia will make as a WTO member – including market liberalization, transparency, committing to intellectual property protection, eliminating nontariff barriers and other provisions – and that would mean higher tariffs for American businesses seeking access to Russian markets.