Congressional Quarterly Weekly- 08.10.2008

Russia Longs to Graduate At the Top of Trade Class

By Finlay Lewis

President Obama has repeatedly stressed that he intends to “reset” the relationship between the United States and Russia. But for that to happen, he first needs to perform a rewind-and-erase task that has eluded his two immediate predecessors: ditching the Jackson-Vanik amendment, a Cold War relic that used trade to punish totalitarian regimes if they denied their citizens emigration rights.

The law held out the most-favored-nation trade status (i.e., non-discriminatory access to vast and lucrative U.S. consumer markets) as an inducement to enact more liberal emigration policies. China, another Communist power that fell under the law’s strictures, received annual presidential waivers to bypass its conditions until 2002, when trade relations were formalized after China won entry into the World Trade Organization (WTO) in 2001.

But similar progress has been stymied for Russia. The measure was enacted as an amendment to a 1974 trade law under the sponsorship of two Democrats, Sen. Henry M. Jackson of Washington (House 1941-53; Senate 1953-83) and Rep. Charles A. Vanik of Ohio (1951-81), and the Kremlin has been in full compliance since at least 1994, three years after the Soviet Union collapsed. But Congress never managed to get a floor vote for a bill to formalize Russia’s release from the strictures of Jackson-Vanik, a process known as graduation.

Bids by Presidents Bill Clinton and George W. Bush to get such a measure on track proved to be poorly timed. The first Clinton effort, in 1999, coincided with a major showdown between Russia and NATO over the Kosovo invasion. Bush tried again in the months after the terrorist attacks of Sept. 11, 2001, but he dropped the plan when Russia angered American farm groups by erecting trade barriers against U.S. poultry products.

The idea resurfaced in 2003 but fizzled after U.S. troops discovered Russian military supplies in the hands of Saddam Hussein’s forces following the invasion of Iraq — hardly an optimal time to shop a Russia trade measure in Congress. Bush pledged to push for Russia’s graduation at summits with President Vladimir V. Putin in 2006 and 2008, but alleged unfair Russian trade practices in the marketing of some agricultural products, combined with ongoing violence in the Russian republic of Chechnya, discouraged the administration from trying to persuade a manifestly reluctant Congress.

Perhaps mindful of these past miscues, Obama has kept almost entirely quiet — in public, anyway — about any plans for a Jackson- Vanik repeal. However, senior Russian officials have not been shy about putting words in his mouth. After Obama met separately with Putin, now the prime minister, and President Dmitry Medvedev in Russia last month, Sergey Lavrov, Russia’s minister of foreign affairs, told a TV interviewer that Obama “understands the awkwardness of — let’s put it mildly — this situation for the American side and has given an assurance that removal of this amendment will be one of the priorities of his administration.”

Still, the status quo clearly rankles — especially since not only China, but also lesser economic powers such as Mongolia and Vietnam got clean Jackson-Vanik bills of health. In January, Putin went out of his way as he spoke at the World Economic Forum in Davos, Switzerland, to mock U.S. lawmakers who argued to keep Russia under Jackson-Vanik because of Russian trade barriers against American poultry. To underline how little such objections had to do with the amendment’s original intent, Putin quoted former dissident Natan Sharansky, saying that he “had not served time in a Soviet prison for chicken meat.” Sharansky, who eventually emigrated to Israel, has emerged as a high-profile supporter of Russia’s graduation.

Symbolic Politics

But more than standard trade sniping — or unfortunate timing — has stayed Congress’ hand in lifting the Jackson-Vanik strictures, observers say. The law stands as a landmark in the battle to secure human rights legislation and has compiled a remarkably successful track record.

Alan P. Larson, then undersecretary of State for economic, business and agricultural affairs, told lawmakers on the House Ways and Means Subcommittee on Trade in 2002 that about 1 million Russian Jews had made their way to Israel between Jackson-Vanik’s enactment and the date of his testimony. Some 573,000 refugees, including Jews, evangelical Christians and Catholics, had left the old Soviet Union for the United States during the same period. Russia and Israel now authorize visa-free travel between the two nations — an unthinkable development when Jackson-Vanik was signed into law 35 years ago.

Indeed, since Russia has long fulfilled the liberalization criteria of the law, the endurance of the trade penalty is not a question of policy, observers say. “Above and beyond anything else, it is symbolic politics,” said James F. Collins, the U.S. ambassador to Russia from 1997 to 2001. “This is seen as a kind of slight of Russia — a treatment of Russia that doesn’t accept its proper international standing . . . that doesn’t recognize that Russia is not the Soviet Union.”

During his visit to Russia, Obama affirmed that his administration accords Russia the full respect due a great power and said he looks forward to building a deeper commercial relationship. But Obama’s powerful Russian audience probably won’t take such reassurances to heart until Jackson-Vanik is off the books. As Vladimir Lukin, then-deputy speaker of Russia’s lower house of Parliament, told The Wall Street Journal prior to a 2003 Bush visit to Russia, “This whole history of Jackson-Vanik is already so laughable, it’s legendary.”

That perception is precisely why unshackling Russia “has an outsized importance,” said Stephen E. Biegun, executive secretary of Bush’s National Security Council and now Ford Motor Co.’s vice president for international affairs. “This one is low-hanging fruit. It is a tangible sign beyond good wishes and rhetoric that the United States is interested in investing in a constructive relationship with Russia. That makes it bigger than just Jackson-Vanik. There are very few issues we and Russia work on . . . that we can make progress on as dramatic as this.”

Sandy Berger, Clinton’s national security adviser, likewise acknowledges that Jackson-Vanik remains freighted with symbolic importance, for better and worse. It has “become the Rorschach test for everything involved in the U.S.-Russia relationship,” he said.

What It Takes

Still, should Obama seek Russia’s release from the law, he’s not assured of any slam dunks on Capitol Hill, due to both the symbolism of the law and to a good deal of residual Cold War-era suspicion of Russian ambitions.

“There might be some time in the future, if there were to be a grand bargain where we really made some progress on human rights and worked through the really big issues which we have on nuclear disarmament and the missile defense system, where we might make it part of a larger arrangement,” Sen. Arlen Specter, a Pennsylvania Democrat, said of future efforts to graduate Russia out of the law. “It is unfortunate that the international checkers game looks for a lot of concessions in return for concessions, but that is real politics,” added Specter, whose parents were Soviet Jews.

More mundane trade concessions would help as well, including lowering the poultry barriers. During his own recent visit to Moscow, Commerce Secretary Gary Locke said that move, together with lifted restrictions on the pork trade with the United States, would mark a “significant first step” toward persuading Congress to embrace graduation.

Another way to get Congress to plow through the Jackson-Vanik legacy would be to jump-start Russia’s on-again, off-again negotiations to join the WTO. The WTO insists that all its members trade with one another on equally favorable terms — meaning that the United States could be locked out of some potential trade benefits after Russia’s admission if it continues cleaving to Jackson-Vanik.

Sharansky’s support for graduation may signify a split among human rights advocacy groups. Mark B. Levin, executive director of the National Conference on Soviet Jewry, said his group supports graduation on the strength of Moscow’s free emigration policies, although he acknowledges that its human rights record on other issues is not spotless. However, Tom Malinowski of Human Rights Watch says that such a move might “send the wrong signal” in light of Russia’s still-woeful human rights record — citing as a case in point the July killing of a Russian human rights activist in Grozny.

But after chafing under the law for 35 years, Russian leaders would interpret fresh human rights monitoring as simple congressional caprice. After all, they’ve observed, Congress voted in 2000 to lift Jackson-Vanik from China and grant it permanent normal trading relations as a step toward WTO membership, despite Beijing’s 1989 Tiananmen Square crackdown. And, of course, that arrangement has proven wildly profitable for both trading partners: In 2008, U.S. exports to China totaled nearly $70 billion, versus $9.3 billion for Russia. On a much smaller scale, the former Soviet republic of Ukraine won its liberation from the law in 2006 as part of its accession to the WTO — even as human rights groups denounced the spread of anti-Semitism within its borders.

In order to turn around a policy debate that’s become this politicized, observers say, Obama would need a strong push from his own domestic constituencies to make scrapping Jackson-Vanik a real priority. “I don’t think there is a great groundswell of opinion that says Jackson-Vanik is relic of a bygone era when American-Russian relations were abysmal,” said Ross K. Baker, an expert on Congress at Rutgers University. “Nobody wants to plant their flag on that mountaintop.”