The annulment of the Jackson-Vanik ammendment...is a considerable step up to trade relations and boost to new investment in Ukraine
The Jackson-Vanik Amendment, a United States trade act signed in 1975 to coerce the Soviet Union to stop persecuting Jewish emigres, has all but ended for Ukraine, following a March 9 vote to annul it by the U.S. House of Representatives.
Cancellation of the Cold-War package of sanctions marks the third sign of support from the U.S. for the pro-Western administration of Ukrainian President Viktor Yushchenko in the run-up to this month’s parliamentary elections.
The U.S. Senate voted to cancel Jackson-Vanik in November last year, and U.S. President George Bush is expected to sign the legislation soon.
The U.S. recognized Ukraine as a market economy on Feb. 17. Then, on March 6, Ukrainian Minister of Economy Arseniy Yatsenyuk signed a bilateral World Trade Organization protocol with the U.S. in Washington with U.S. Trade Representative Rob Portman.
The House of Representatives shot down Jackson-Vanik on Mar. 9 with a vote of 417-2, in what Portman described as a bipartisan effort.
“It sends a positive and strong signal to our Ukrainian partners who have instituted reforms that increase transparency, provide greater intellectual property protections and stronger enforcement of the rule of law,” Portman said after the March 9 vote.
The decision met with equal warmth from President Yushchenko, who noted in a statement: “the annulment of the Jackson-Vanik amendment shows the strategic partnership between the countries and supports a considerable stepping up of trade relations and a boost to new investment in Ukraine.”
“I am certain that our trade will double,” Yatsenyuk said, adding that the current $1.5 billion in annual trade Ukraine has with the U.S. will surge to $3 billion.
Yet some analysts insist that the lifting of Jackson-Vanik is more about public relations than economics.
“It is our view that the amendment has not been applied to Ukraine since 1997, and that was almost 10 years ago,” said Kateryna Malyuhina, an expert on external trade at Kyiv’s International Center for Policy Studies. But for the most part, the passage of the bill “will improve the status and image of the country as a whole,” she added.Yushchenko’s political opponents, however, are not giving him the benefit of the doubt. Yevhen Kushnyarov, a member of the opposition Party of Regions bloc, said the House vote was being used by Yushchenko and his team as a PR campaign, adding that the decision “provides little, just like the acknowledgement of a market economy,” inasmuch that “Ukrainian exports to the U.S. are paltry.”
