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U.S. Senate Mulls Jackson-Vanik Repeal

The U.S. Senate Committee on Finance's chairman, Max Baucus, is among those calling for the Jackson-Vanik Amendment to be scrapped.
The U.S. Senate Committee on Finance's chairman, Max Baucus, is among those calling for the Jackson-Vanik Amendment to be scrapped.
WASHINGTON -- The U.S. Senate Committee on Finance has held a hearing to consider the permanent normalization of trade with Russia, a move that the Obama administration and business leaders are pushing for but which raises the sensitive issue of Moscow's human rights record.

Committee Chairman Senator Max Baucus (Democrat-Montana) urged his fellow lawmakers on March 15 to repeal the Jackson-Vanik Amendment -- Cold War-era legislation that denies Russia permanent normal trade relations (PNTR) -- for the sake of the still-fragile U.S. economy.

Doing so, he claimed, could result in a twofold increase in the volume of U.S. exports to Russia, which are currently worth around $9 billion annually.

"If the United States passes PNTR with Russia, U.S. exports to Russia are projected to double within five years," he said. "If Congress doesn't pass PNTR, Russia will join the WTO anyway, and U.S. exporters will lose out to their Chinese and European competitors."

With support from the administration of U.S. President Barack Obama, Russia completed its 18-year quest for membership in the World Trade Organization last year. The Duma is set to ratify membership in the coming months.

If the United States does not lift its trade barriers, it will not benefit from reduced tariffs and dispute arbitration that Russia's WTO entry affords.

Ronald Pollett, the CEO of General Electric in Russia and one of several U.S. business executives who testified at the hearing on March 15, said normalizing trade with Russia would triple his company's sales there by 2020.

Symbolic Role

Nonetheless, while few U.S. lawmakers deny the economic advantages that would come with overturning the legislation, many are reluctant to do so without implementing new measures to hold Moscow accountable for its troubling human rights record.

Conceived in 1974, Jackson-Vanik was meant to pressure the Soviet Union into lifting its restrictions on Jewish emigration. Having largely served that purpose, its provisions have been waived by multiple administrations. However, it continues to serve a symbolic role, representing the U.S. position on Moscow's rights transgressions.

Several U.S. lawmakers have rallied around the Sergei Magnitsky Rule of Law Accountability Act as a potential trade-off for repealing Jackson-Vanik, which has drawn the Kremlin's ire.

The act would deny visas to and block the U.S. assets of some 60 Russian officials implicated in the prosecution and 2009 pre-trial detention death of Russian lawyer Sergei Magnitsky.

Magnitsky, who was targeted after exposing a scheme in which top officials tried to defraud the Russian government, has become an international symbol of corruption and human rights failures in Moscow. Russia has only prosecuted two low-level officials in connection with his death.

'Dual-Track Approach'

New Jersey Senator Robert Menendez (Democrat) maintained that he would like to see a "dual-track approach" from the business community that would "address everyone's needs and concerns."

Menendez said he hoped such an approach would mean a way forward on repealing Jackson-Vanik but also give Russia an incentive to improve its human-rights record.

"We need a vehicle like the [Sergei] Magnitsky bill, for example, that sends the message to Russia that we are serious about human rights," he said.

In a move viewed by some as an effort to appease the Magnitsky bill's proponents, the Obama administration announced in July that it had imposed visa bans on Russians implicated in Magnitsky's death. It opposes passage of the more far-reaching legislation.

In recent days, Russian opposition figures have weighed in on the debate.

Aleksei Navalny, Boris Nemtsov, and others have advocated for the amendment's repeal, saying that doing so would help Russia modernize economically. But they also say that the Magnitsky Act would help draw attention to Russian rights abuses.

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