Even with Russia acceding to the WTO, the US has so far failed to extend most-favoured nation status (MFN) over the USSR--not Russia, mind you--not allowing free emigration in the early seventies. It's antiquated geopolitics. Obviously, Russians have been able to go wherever they damn please since the collapse of the Iron Curtain. But, hypocritical American lawmakers have not done away with the Jackson-Vanik amendment yet. Worse, American lawmakers have made an issue about granting WTO MFN status on resolving another unrelated human rights issue to their satisfaction. The utter stupidity of this legislative move arises not only from maintaining vastly outmoded rules but also not honouring trade-related MFN due to all other WTO members. The US ambassador to Russia thus tries to do some damage control while being placed in a tight spot:
The Cold-War era Jackson-Vanik Amendment, which imposes trade restrictions on Russia, could be abolished by January 2013 as more and more US politicians realize the importance of this step, US Ambassador to Russia Michael McFaul said. “More and more people in the United States agree that this must be done,” McFaul said in an interview with Ekho Moskvy radio on Wednesday. “Let’s hope it will happen before January [2013]. However, there is still a big group of people who would like to link the scrapping of Jackson-Vanik issue with the adoption of the Magnitsky list,” the diplomat said.This latest bout of incredulity began midyear when some American senators with nothing better to do thought of a ridiculous gambit:
In July, the United States Senate Finance Committee approved a bill linking the abolishment of the Jackson-Vanik Amendment and a measure aiming to punish Russian officials involved in the death of Russian lawyer Sergei Magnitsky. A probe into his death revealed that the lawyer, who was suffering from untreated pancreatitis and a heart condition, did not receive proper medical treatment in prison. Rights activists pointed to multiple violations of his rights during his arrest and in detention, including signs that he was beaten by prison guards hours before his death. Russia insists that the two issues must not be tied together.At any rate, this week will see whether (a) the Magnitsky law supersedes the Jackson-Vanik agreement and (b) MFN status is granted to Russia. If worse comes to worst and MFN status is not granted, then Russia will have the right to slap tariffs on American products. In other words, Russian WTO accession would have actually worsened US-Russia trade relations due to inane lawmaking:
The House Rules Committee is scheduled to vote on a rule regarding H.R. 6156, “the Russia and Moldova Jackson-Vanik Repeal Act of 2012,” on Tuesday afternoon, with a vote to approve permanent normal trade relations (PNTR) with Russia expected later this week. The bill would then be sent to the Senate, where the Finance Committee approved a different version of the measure in July.What appetite does the US have for a trade row that hurts US businesses too? While you hope trade creation occurs, remember that you're talking about a bunch of folks hellbent on flushing the US down the toilet of history with extreme prejudice--American lawmakers.
Farm organizations and business groups hoped Congress would have acted shortly after Russia joined the World Trade Organization three months ago. Under World Trade Organization (WTO) rules, Russia could raise tariffs on U.S. exports to Russia if Congress does not approve PNTR.
November 17 UPDATE: It has come to pass that Jackson-Vanik will likely be dismantled at long last as the House has made a move to given Russia MFN status or PNTR in American trade lingo. However, as the bill moves to the Senate, the Magnitsky law has unfortunately been tied to it:
The bill, which the House approved 365 to 43 and which now goes to the Senate, did accomplish a goal that Russia has long sought. It repeals the Cold War-era Jackson-Vanik Amendment, which tied trade relations to the free immigration of persecuted religious minorities, principally Jews. Since the fall of the Soviet Union more than 20 years ago, Russia has had no exit restrictions, and the amendment has been a source of constant irritation...So it's not quite the outcome the Russians were hoping for--or American exporters to Russia for that matter.
But the Magnitsky Act was tied to it. It requires the United States to place financial and visa restrictions on a list of officials associated with the torture and death, three years ago Friday, of Sergei Magnitsky, a whistleblower who uncovered a $230 million tax refund fraud. Russian officials have denounced the act as interference in domestic affairs.
