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2012-03-29

Jackson-Vanik Amendment and the Rights of Indians

Edward LOZANSKY, President, American University in Moscow

The more I watch the goings-on in Washington regarding graduating Russia from the Jackson-Vanik Amendment (JVA), the more it reminds me of the deal struck almost 400 years ago by a certain Peter Minuit. On May 24, 1626, the guy purchased the island of Manhattan from some Native Americans for goods to the value of 60 Dutch guilders, estimated to be the equivalent of $24.

Not that I am against this graduation, even if it’s become a bit of rigmarole by now. In fact, in April 2011 my good friend Anthony Salvia of the American Institute in Ukraine and I filed a lawsuit against Obama. We demanded that he should graduate Russia from JVA without seeking congressional approval.

According to a careful reading of the statute, the president has constitutional authority to do just that. Significantly, this view is shared by none other than Richard Perle, Senator Henry Jackson’s former chief of staff, the man who actually wrote the text of the amendment and who, I should add, is not at all an admirer of Putin’s Russia.

Nevertheless, Obama’s lawyers fought hard to dismiss this lawsuit. Their argument was based on technical rather than substantive grounds. As it happened, Tony and I could prove only our moral but not material injury from JVA. More importantly, though, the administration basically admitted that, in strict legal terms, we as plaintiffs were absolutely right.

While three administrations have successively claimed the need for congressional action to “graduate” Russia from JVA trade restrictions, it is highly indicative of the soundness of our case that the Department of Justice did not make that claim in its brief to the court! They know that under the law as it is written, permanent removal of trade restrictions does not require any congressional sanction.

As things stand now, the big irony is that with Russia’s accession to the WTO, the amendment, which was supposed to rightly punish the Soviet Union, will now be damaging to U.S. business interests.

Proof? The U.S. Chamber of Commerce, along with 173 U.S. companies, including such giants as General Electric, Deere, Boeing, Ford, GM and Chrysler, sent letters to Congress demanding the normalization of trade with Russia by lifting JVA. One wonders why they did that. Have they suddenly switched from business to charity or human rights activities? Doubtfully, very doubtfully indeed.

The reason is obvious: plenty of U.S. companies are eager to see this JVA graduation because it directly serves their interests. For Russia this is just a moral issue, while for America, it’s more a matter of dollars and cents. If the republicans are stupid enough to kill this graduation I’d like to see their faces when they meet U.S. business lobbyists the morning after.

Realistically speaking, the amendment is sure to be lifted, and sooner rather than later. But when Congress eventually does what it is supposed to have done 20 years ago, after the collapse of communism and the Soviet Union, this will most likely be hyped as a great big gift to Russia, very much like Minuit’s offer of $24 to the Indians.

That’s not the end of the story, though. To show Congress that he was not too soft on Putin, Obama declared the establishment of a new $50 million fund to support “Russian non-governmental organizations that are committed to a more pluralistic and open society.”

In view of Russia’s concern over American meddling in its internal affairs, it is hard to imagine a more dubious move. In fact, even some potential Russian grant recipients have been soured by this idea. Surely, in these difficult economic times, U.S. taxpayers might certainly find better ways to spend these “democracy promotion funds” on the domestic front – just ask any resident of the towns and counties across America that are now close to bankruptcy.