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Russian admittance to WTO relies on repeal of debated trade restrictions

March 31st, 2012

The Cold War may have ended over 20 years ago, but some U.S. trade restrictions on Russia still remain on the books.

The Jackson-Vanik amendment precludes the United States establishing normal trade relations with a country that is ruled by a communist government. It was also placed on Russia because they restricted emigration of their citizens and having a poor human rights track record.

Russia has been subject to those restrictions since the bill passed in 1974. But over recent years, it has almost never been enforced.

“Every president, regardless of political party, has waived Jackson-Vanik’s requirements for Russia for the past 20 years,” said Max Baucus (D-Mont.), chairman of the Senate Finance Committee.

Russia is expected to become a full World Trade Organization (WTO) member this year. But in order for U.S. businesses to take advantage of Russia’s WTO status this act must be repealed.

If the amendment is not waived and Russia becomes a member of the WTO the U.S. would technically be violating the WTO laws by sanctioning trade with Russia. Since all WTO members must grant each other normal trade relations. This would result in tariffs on American companies.

A group of 173 U.S. companies sent a letter to Congress to repeal Jackson-Vanik.

“This legislation is crucial in order for U.S. manufacturers, service providers, agricultural producers and their employees to take advantage of the many market opening and transparency commitments that form Russia’s accession package to WTO,” according to the letter.

President Obama has been supporting the repeal of the amendment.

It is an economic policy that seems to favor the United States. But not all are convinced it is worth it.

“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,” said Sen. Jon Kyl (R-Ariz.). “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.”

In addition to those concerns, Russia’s recent election has also been criticized for corruption. Vladimir Putin controversially won his second term as president by a landslide.

Human Rights Watch further criticized Russia for detaining over 130 peaceful protesters. Russia is also frequently criticized for its support to other countries that facilitate human rights abuses. For example, Russia currently sells weapons to Bashar Assad’s regime in Syria. The death toll continues to grow to over 8,000. Some have claimed that Russia’s antics warrant stopping trade all together.

“If you are going to subsidize the killing of innocent people we can no longer afford to do business with you,” said Sen. Dick Durbin (D-Ill.). “I hope the Russians will understand, once and for all, that they can’t play both sides of the street, and we in the United States should draw the line.”

Economically, the bill appears to favor the United States, which is good for Obama during an election year.

The bill also seems to present the image of an American anti-Russian sentiment, which could further hinder relations.

Russia also does not have any major incentives to comply with U.S. human rights concerns since the U.S. is the primary beneficiary of the repeal.

Whether or not the U.S. decides that the economic incentives outweigh Russia’s human rights violations remain to be seen.