An Antiquated Amendment: Jackson-Vanik Needs Repeal
Last month, the Senate Finance Committee held a preliminary hearing on repealing the Jackson-Vanik Amendment and establishing Permanent Normal Trade Relations (PNTR) with Russia. Absent repeal, the Jackson-Vanik Amendment would put American businesses at a distinct disadvantage vis-à-vis foreign competitors in the Russian market. Grover Norquist, President of Americans for Tax Reform, has written a letter to the United States Senate urging the repeal of the Jackson-Vanik Amendment and the passage of PNTR with Russia.
Originally passed in 1974, the Jackson-Vanik Amendment tied trade relations with the Soviet Union, to the emigration rights of religious minorities within that nation. This vestigial legislation is a relic from a past conflict with a country that no longer exists. Over the last few years, millions of jobs have disappeared drastically increasing the need to open new markets to American goods. As Russia prepares to join the World Trade Organization (WTO) this summer, it is imperative that American goods enjoy the same economic liberalization benefits as Asian and European goods. Unless repealed, the Jackson-Vanik Amendment would allow Russia to deny American exporters equal access to its market under WTO rules.
Permanent Normal Trade Relations with Russia would open up new markets for U.S. manufacturing and agricultural products while providing consumers with lower priced products at home. Repealing the Jackson-Vanik Amendment and establishing PNTR with Russia has the potential to double or triple U.S. exports to Russia, according to the U.S. Chamber of Commerce. With the world’s eleventh largest economy and more than 140 million consumers, Russia has already established itself as a lucrative market for a broad range of goods and services. Demand for quality products will only increase after Russia joins the WTO. Russia is the last major economy to join the WTO making this an opportunity America cannot afford to squander.
A recent study conducted by the Heritage Foundation demonstrates that nations with low trade barriers are more prosperous. Policymakers should be mindful of this as they seek pro-growth solutions to America’s economic challenges.