The Jackson–Vanik amendment to the Trade Act of 1974 is a 1974 provision in United States federal law intended to affect U.S. trade relations with countries with non-market economies (originally, countries of the Communist bloc) that restrict freedom of emigration and other human rights.
- Business involvement
- Soviet Union
- Baltic states Estonia Latvia and Lithuania
- Peoples Republic of China
- US legal challenge
The amendment, named after its major co-sponsors Henry M. "Scoop" Jackson of Washington in the Senate and Charles Vanik of Ohio in the House of Representatives, both Democrats, is contained in Title IV of the Trade Act of 1974. The Trade Act of 1974 passed both houses of the United States Congress unanimously, and President Gerald Ford signed the bill into law with the adopted amendment on January 3, 1975. Over time, a number of countries were granted conditional normal trade relations subject to annual review, and a number of countries were liberated from the amendment.
In December 2012, the Magnitsky Act was signed into law by President Obama, repealing the Jackson–Vanik amendment.
In the period from 1972-January 1975, Congress debated and added the Jackson-Vanik Amendment to the 1972 Trade Reform Act, which restricted the President’s ability to provide most favored nation status (MFN) to the Soviet Union and other non-market economies which formed the Soviet bloc. The timing and provisions of the amendment reflected the presidential ambitions and distrust of the Soviet Union of Senator Henry Jackson (D-WA).
After the Soviet Union allowed a number of Soviet Jews to emigrate in the years after the 1967 June War in the Middle East, expectations of freer emigration were raised, but soon shattered as the 1972 Soviet emigration head tax made emigration, for Jews in particular, very difficult. This Soviet edict levied an additional exit tax on educated emigrants, which appeared to have the effect of singling out Jews most heavily. The imposition of 1972 Soviet education tax on emigrants was imposed after the 1972 Moscow summit of superpower leaders Richard Nixon and Leonid Brezhnev. It reinforced critics of the Nixon administration’s detente policy with the Soviet Union for downplaying human rights concerns for human rights. President Richard Nixon's handling of the issue of Soviet Jewish emigration and Nixon’s National Security Advisor Henry Kissinger's reluctance to broach the subject disappointed US Jewish activists. The Soviets announced the abolishing of the tax just before the introduction of the amendment in Congress, arguably in an attempt to prevent it.
Collective frustration over the issue of emigration crossed the Atlantic and became the catalyst for U.S. political action in the form of the Jackson–Vanik amendment to the 1972 Trade Agreement.
At first, Jackson organized the political movement to link trade and emigration in America’s relations with the Soviet Union in concert with Jewish activists, but he soon took matters into his own hands. Senator Jackson drafted what would become the Jackson–Vanik amendment in the summer of 1972 and introduced it to the Ninety-second Congress on October 4, 1972. Three-quarters of the Senate co-sponsored his amendment, neutralizing opposition from President Nixon.
The amendment interfered with the policy of detente that the Nixon administration, and Henry Kissinger, who became Secretary of State in 1973, had worked on since 1969. Jackson’s efforts, rooted in his own domestic political calculations and ideological distrust and antipathy toward the Soviet Union, complicated the Nixon White House’s pursuit of a policy of detente with the USSR.
Richard Perle, Jackson's staffer, said in an interview that the idea belonged to Jackson, who believed that the right to emigrate was the most powerful among the human rights in certain respects: "if people could vote with their feet, governments would have to acknowledge that and governments would have to make for their citizens a life that would keep them there." While there was some opposition, the American Jewish establishment on the whole and Soviet Jewry activists (particularly the Washington Committee for Soviet Jewry and the National Conference on Soviet Jewry) supported the amendment over Nixon and Kissinger's objections.
In 1973 Rep. Charles A. Vanik (D-OH) introduced in the House of Representatives the legislation written in the bill with Senator Henry M. Jackson (D-WA). The amendment would deny normal trade relations to certain countries with non-market economies that restricted the freedom of emigration. The amendment was intended to allow, primarily Jewish refugees and other religious minorities, to escape from the Soviet Bloc. During this time, Vanik was the chair of the House Ways and Means Subcommittee on Trade.
Jackson attached his amendment to legislation the Nixon administration badly wanted. In the House of Representatives, Jackson and counterpart Vanik, lined up cosponsors and House leaders as primary sponsors of the amendment. During this period, Jackson also expanded his base of support among Jewish groups adding other ethnic, economic, and ideological groups as supporters. Labor, ethnic groups originally from Eastern European and Baltic States, human rights organizations and liberal intellectuals were the most significant additions to organized labor and Jewish activists. While building support, Jackson resisted compromise with the administration and the Soviet Union.
Once the Nixon administration began to appreciate the threat Jackson presented to its detente foreign policy and trade with the Soviet Union, a number of attempts were made to thwart Jackson. The administration tried to keep the amendment out of the committee version of the bill during the House Ways and Means Committee’s markup sessions. When it became clear that this was impossible, delay was the administration’s next option, along with the threat of a veto.
The outbreak of the Yom Kippur War in October 1973 further complicated Congressional views of the Soviet Union. Soviet involvement in the conflict may have stoked distrust of the USSR by some Members of Congress, but there were other members of Congress who feared that pressure on the Nixon Administration to advance the goals of the Jackson–Vanik amendment complicated the emergency supply of American military weapons to Israel. Israel prevailed in the Yom Kippur War, and by December 11 the House of Representatives voted by an overwhelming 319-80 to include the entire Jackson–Vanik amendment in the Trade Bill, which passed 272-140. With that, Congress recessed until January 1974.
On January 21, 1974, the second session of the Ninety-third United States Congress began, and the Jackson amendment entered the Senate. Having lost the legislative battle in the House of Representatives, the administration and Soviet authorities turned to negotiations with Jackson. Trilateral talks began in spring 1974 involving Congress, the Executive Branch and the Soviet Union. The prominent individuals involved were Senator Henry Jackson, Henry Kissinger, and Soviet Ambassador to the U.S. Anatoly Dobrynin, a skilled senior diplomat who had served in Washington for decades. Kissinger enjoyed a special status in these negotiations since he alone controlled the communications between Jackson and the Soviet Union. In effect, Kissinger was the only one of the three parties involved who knew what all sides were saying in secret, informal sessions while he also conducted a long-standing “back channel” dialogue with Soviet authorities via Dobrynin. Kissinger’s influence only grew as Nixon was increasingly consumed by the Watergate break-in political scandal, which brought him to resign the Presidency.
In March 1974, Kissinger returned from Moscow with news that the Soviets were willing to cooperate with the Members of Congress. Jackson, however, would complicate matters by making public the demands that had been accommodated to in quiet diplomatic dialogue.
Jackson pursued negotiations with the administration and the Soviet Union on the terms of the amendment. The outline of an agreement was perceivable, but by summer the talks seemed to bog down as Watergate sapped the Executive Branch’s political energy. Nixon resigned August 9, 1974.
In August 1974, when the national deadlock was broken by Nixon’s resignation and Ford's appointment, Jackson had to decide whether or not to concur with an agreement that was not perfect or hold out longer and possibly sink the entire Trade Bill. Given the choice of having the Trade Bill with the Jackson amendment or doing away with both the Trade Bill and the Jackson amendment together, Kissinger was apparently willing to let the two die. So to compromise, Jackson had agreed to grant, at least temporarily, trade concessions, including extensions of credit, to the Soviet Union.
Eventually, Jackson accepted less than perfect terms. Jackson was anxious to achieve a legislative victory after years of battle and apparently decided it best not to ask too many more questions nor press too hard for less ambiguous pledges lest he be left with nothing to show for his efforts.
President Ford signed the 1972 Trade Agreement on January 3, 1975, Jackson amendment and all. On Friday, January 10, the Soviet government sent a letter, heretofore unpublished, which apparently indicated the Soviets’ refusal to comply with the need to provide assurances on emigration or to make technical changes in the 1972 Trade agreement. On Monday, January 13, Kissinger met with Soviet officials and subsequently issued the statement “...that the 1972 Trade Agreement cannot be brought into force at this time and the President will therefore not take the steps required for this purpose by the Trade Agreement. The President does not plan at this time to exercise the waiver authority.”
Harry Stone, vice president and his brother, Irving Stone, president of American Greetings based in Vanick's home turf, Cleveland, Ohio, played a major role in gaining sponsorship for this amendment. Mr. Harry Stone served as campaign chairman to the late U.S. Representative Charles Vanik, a connection that gained significance when Vanik asked Mr. Stone and his brother Irving, then American Greetings president, to encourage congressman Wilbur Mills to schedule a floor vote on the Jackson-Vanik Amendment requiring the Soviet Union to allow Jewish emigration to the U.S. in order to qualify for “most favored nation status” for its exports. Senator J. William Fulbright, chair of the Senate Foreign Relations Committee characterized the amendment as "idealistic meddling" in the amendment's attempts to use free Jews using trade and credit as levers against the Soviet Union. American Greetings was the largest employer in Mills’s Arkansas district. Fulbright, apparently saw the same light as Mills, as American Greetings opened one of its largest printing plants in Fulbright's and Mills's state of Arkansas.
“The role that Harry Stone played in making the Jackson-Vanik bill a reality will go down as one of the most meaningful contributions that a Clevelander has ever made,” says Vic Gelb, an honorary for life director of the Cleveland Jewish News. “It made a world of difference in the history of events and enabled the exodus of Jews from the former Soviet Union.”
The difficulty faced by Senator Jackson in the three-way negotiation process that took place from August 1974 through January 1975, demonstrated some of the institutional constraints on congressional involvement in foreign policy making. The Jackson–Vanik amendment is a case study of how domestic politics shapes American Foreign policy making. It exemplifies the fact that one cannot understand U.S. foreign policy if one does not understand the domestic politics in Congress and the White House that shape policy decisions.
The amendment denies most favored nation status to certain countries with non-market economies that restrict emigration, which is considered a human right. Permanent normal trade relations can be extended to a country subject to the law only if the President determines that it complies with the freedom of emigration requirements of the amendment. However, the President has the authority to grant a yearly waiver to the provisions of Jackson-Vanik, and these waivers were granted to the People's Republic of China starting in the late 1970s and in later decades, to Vietnam and Laos.
The core provision of the amendment was codified as 19 U.S.C. 2432(a), Sec. 402 "Freedom of Emigration in East-West Trade" of the Trade Act of 1974 (Pub.L. 93–618, 88 Stat. 1978), which was enacted January 3, 1975:
The countries subject to the amendment included the Soviet Union (and later the post-Soviet states), the People's Republic of China, Romania, Hungary, Czechoslovakia, East Germany, Bulgaria, Mongolia, Albania, Cambodia, Laos, and Vietnam.
Of Soviet Bloc countries, Poland was exempt from the amendment, but from 1982 to 1987 its unconditional MFN status was suspended due to its actions against Solidarność. Yugoslavia was also exempt; however, in 1991-1992, due to violent events in the former Yugoslavia, the MFN status of Serbia and Montenegro was suspended.
At first the Jackson–Vanik amendment did little to help free Soviet Jewry. The number of exit visas declined after the passing of the amendment. However, in the late 1980s Mikhail Gorbachev agreed to comply with the protocols of the Organization for Security and Cooperation in Europe. Lazin (2005) states that scholars differ on how effective the amendment was in helping Soviet Jews. Some argue that it helped bring the plight of Soviet Jews to the world's attention, while others believe it hindered emigration and decreased America's diplomatic bargaining power.
Since 1975 more than 500,000 refugees, large numbers of whom were Jews, evangelical Christians, and Catholics from the former Soviet Union, have been resettled in the United States. An estimated one million Soviet Jews have immigrated to Israel in that time.
Jackson-Vanik also led to great changes within the Soviet Union. Other ethnic groups subsequently demanded the right to emigrate, and the ruling Communist Party had to face the fact that there was widespread dissatisfaction with its governance.
Former Soviet dissident Natan Sharansky wrote in his 2004 book The Case for Democracy:
"...Kissinger saw Jackson's amendment as an attempt to undermine plans to smoothly carve up the geopolitical pie between the superpowers. It was. Jackson believed that the Soviets had to be confronted, not appeased.
Andrei Sakharov was another vociferous opponent of détente. He thought it swept the Soviet's human rights record under the rug in the name of improved superpower relations.... One message he would consistently convey to these foreigners (the press) was that human rights must never be considered a humanitarian issue alone. For him, it was also a matter of international security. As he succinctly put it: "A country that does not respect the rights of its own people will not respect the rights of its neighbors." (p.3)
Baltic states: Estonia, Latvia and Lithuania
Estonia, Latvia and Lithuania were subject to the amendment because they had been forcibly incorporated into the Soviet Union. They were liberated from the amendment upon the restoration of their independence on September 6, 1991.
Kazakhstan’s Jewish community reportedly requested the US to cancel Jackson Vanik amendment for Kazakhstan. In an article titled “A Relic of the Cold War,” journalist Robert Guttman refers to the Amendment as an “outdated and rather meaningless piece of legislation.” The U.S. Chamber of Commerce argues that the application of Jackson-Vanik on Kazakhstan puts U.S. companies at a competitive disadvantage. The Chamber urges the U.S. Congress to graduate Kazakhstan from Jackson-Vanik.
Kyrgyzstan first received conditional normal trade relations in 1992. In 1997 it was found fully compliant with the Jackson-Vanik provisions, but it status remained subject to annual review. On May 18, 2000, Public Law 106-200 authorized the President to extend unconditional normal trade relations to Kyrgyzstan.
Moldova first received conditional normal trade relations in 1992. In 1997 it was found to be fully compliant with the Jackson-Vanik provisions, but its status remained subject to annual review.
On November 16, 2012 the U.S. House of Representatives passed a bill that would repeal the Jackson–Vanik amendment for Russia and Moldova. After approval by the Senate, the law repealing the effects of the Jackson–Vanik amendment on Russia and Moldova was signed by President Barack Obama on December 14, 2012.
On November 16, 2012 the U.S. House of Representatives passed a bill that would repeal the Jackson–Vanik amendment for Russia and Moldova. After approval by the Senate, the law repealing the effects of the Jackson–Vanik amendment on Russia and Moldova was signed together with Magnitsky bill by President Barack Obama on December 14, 2012.
On March 8, 2006, the U.S. House of Representatives passed a bill permanently exempting Ukraine from trade restrictions imposed under the 1974 Jackson–Vanik amendment.
People's Republic of China
Until the accession of the PRC to the World Trade Organization in December 2001 the PRC was covered by the provisions of Jackson-Vanik. Although the President of the United States, starting in the late 1970s, used the waiver provisions of the amendment to grant normal trade relations trade status, the existence of the amendment meant that there was a congressional effort to overturn this waiver each year, creating a yearly controversy especially during the 1990s after the Tiananmen protests of 1989. Congress specifically removed the PRC from coverage by Jackson-Vanik in the late 1990s as part of its entry into the World Trade Organization, as the provisions of Jackson-Vanik were inconsistent with WTO rules.
U.S. legal challenge
In April 2011, American University in Moscow professor Eduard Lozansky and former Reagan administration official Antony Salvia filed a federal lawsuit in Washington, D.C. against the Obama administration arguing the law is illegal.