Tuesday, November 15, 2011

Jackson Vanik amendment

A Policy Brief for the Peterson Institute of Economic Affairs in November 2011  by Anders Aslund and Gary Clyde Hufbauer titled " The United States should establish normal trade relations with Russia"  has brought back into focus the Jackson Vanik amendment in the context of Russia about to join the WTO family.

The brief has argued for strengthening the trade ties between the US and Russia and seeks to impress upon the benefits of according permanent normal trade status (PNTR) to Russia by repealing the application of the Jackson Vanik amendment to Russia. The advantages both to the US and Russia of according of PNTR to Russia has been discussed. 

While the repeal of the application of the amendment is one issue, the larger issue is whether the continuance of the amendment is in itself against the rules of the WTO multilateral system? Since domestic laws are subject to WTO rules and would have to be amended in conformity with WTO decisions, is the Jackson Vanik amendment in itself a violation of the WTO Agreement. The applicability of the amendment to a particular country is one issue but the issue whether the existence of a law that seeks to impose trade restrictions on a country due to "non-trade" issues is prima facie a violation of the WTO Agreement remains to be settled.

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