Tenuous and dramatic as ever, the relationship between the United States and Russia has gone hot once again in the last few weeks. Underlying the controversy over Syria and Russia's related anti-American vitriol is the congressional debate over the Jackson-Vanick amendment, a legislative artifact of the Cold War that restricts U.S. trade with Russia. Congress would do well to repeal Jackson-Vanick both in order to gain compliance with World Trade Organization requirements and as a prudent gesture of goodwill.
Russia's admission to the WTO in December, billed as the start of Washington's "reset" of relations with the Kremlin, represents progress for the United States and the global economy on several fronts. Beyond calling Russia to task by requiring adherence to international standards on domestic protectionism and intellectual property rights, bringing Russia into the capitalist fold is unquestionably a good strategy the country's immense oil and natural gas reserves and its permanent seat on the U.N. Security Council mean that Russia will continue to be an important player in geopolitics in the foreseeable future.
With Russia having made the necessary adjustments to join the free trade club, it is time for the United States to respond in kind. Jackson-Vanick, enacted in 1974 at the height of the Cold War, denies most-favored nation status to countries with non-market economies that restrict free emigration. Designed as a targeted response to the Brezhnev government's "diploma tax," which itself was aimed at stopping the drain of Soviet Jews and other highly educated Russians to the West, the amendment is clearly a relic of a bygone era it cannot possibly serve its original intent, given that the Soviet Union disbanded more than two decades ago and that Jewish emigration from Russia is no longer under scrutiny. Such legislation has no place in modern American trade policy.
As one might expect, however, American domestic politics have prevented any policy change in the last 20-plus years and threaten to further impede progress today. Despite the promises of past presidents to make the politically obvious decision, leaders have failed to make good on their word since the Cold War ended, only President George W. Bush has actually requested the cancellation of Jackson-Vanick, and his efforts went for naught after a 2002 Russian ban on American poultry essentially tabled the issue.
The Obama administration has rightly prioritized the scrapping of Jackson-Vanick, though it will unquestionably be an uphill battle in an election year. At the same time, baseless claims from Russia attributing recent domestic unrest to American meddling and accusing the United States of fomenting revolution have only further poisoned dialogue between the two nations, a dialogue that is already on shaky ground given Russia's continued support for Syrian dictator Bashar al-Assad in his efforts to suppress his country's ongoing rebellion.
While there are clearly political roadblocks to an otherwise simple solution, it is imperative that Congress act to normalize trade relations with Russia. The United States, in fact, will soon be in violation of WTO standards unless the amendment is repealed because membership in the organization requires the granting of most-favored nation status to all other member nations. As a result, American exporters will face higher tariffs than foreign competitors when seeking access to Russian markets. Given that major American companies like Caterpillar, Boeing, John Deere and United Technologies all have interests in Russia, this is a policy issue that will also have concrete consequences for some of the United States' most important companies.
Going beyond the procedural minutiae and economic implications, the repeal of Jackson-Vanick would be wise both symbolically and strategically. While studies have estimated that the amendment's retraction could add a whole percentage point to Russia's annual economic growth rate, such action would also be received internationally as prudent use of American economic primacy. Although critics will undoubtedly attempt to tie the amendment's repeal to rectifying human rights issues in Russia, Our leaders must recognize that trade is a separate issue and seize an opportunity that benefits both sides. The United States must not miss a chance to show the world that it can use its preponderant power in a judicious and benevolent manner.
