OCTOBER- DECEMBER 2005 DEDICATED TO
"UKRAINE'S JACKSON-VANIK GRADUATION"
Ambassadors Pifer and Miller Chair Jackson-Vanik Graduation Coalition
Announcement: Jackson-Vanik Graduation Coalition; U.S.-Ukraine
Ukrainian President Victor Yushchenko announced after his January 2005
inauguration that Ukraine's graduation from the provisions of the U.S.
Jackson-Vanik Amendment would be at the forefront of his economic and
foreign policy objectives for 2005.
Last April, following their Washington meeting, U.S. President
George Bush joined President Yushchenko in expressing support for "immediately
ending application of Jackson-Vanik to Ukraine."
This past August, during a visit to Kyiv, U.S. Senators
Richard Lugar and Barack Obama announced that bills had been introduced
in Congress to formally graduate Ukraine from Jackson-Vanik.
And most recently, in October 2005 U.S. Secretary of State
Condaleeza Rice sent letters encouraging swift Congressinal action to
Congressman Bill Thomas, Chairman of the Ways and Means Committee, Charles
B. Rangel, Ranking Minority Member of the House Ways and Means Committee
and to Senator Charles E. Grassley, Chairman of the Senate Finance Committee.
Why is Ukraine's graduation from the provisions of the
Jackson-Vanik Amendment on everyone's agenda?
The 1974 Amendment, named for Senators Henry "Scoop"
Jackson and Charles Vanik, imposed trade restrictions on the Soviet
Union in response to its poor human rights policies, particularly restrictions
on the emigration of religious minorities.
However today, more than thirty years later, Ukraine has
built a strong record of allowing open emigration and has created conditions
for religious minorities to pursue their beliefs freely. Ukraine is
a success story for Jackson-Vanik and it now merits graduation from
In June of 2005, government officials, members of the
Verkhovna Rada and Congress, representatives of non-governmental organizations,
the media and business community members met in Washington D.C. for
the U.S.-Ukraine Foundation's Policy Dialogue Working Session.
Engaged in action-oriented, focused discussion of issues
and problems in U.S.-Ukraine relations and Ukraine's democratic reform,
the working session produced "action plans" of policy recommendations
for both U.S. and Ukrainian government officials.
The action plans repeatedly call for the U.S. Congress
to graduate Ukraine from the Jackson-Vanik Amendment. For this reason,
the U.S.- Ukraine Foundation has declared October, November and December
"Jackson-Vanik Graduation Months."
The Jackson-Vanik Graduation Coalition, headed by former
U.S. Ambassadors to Ukraine Steven Pifer and William Miller, is working
to achieve Ukraine's graduation from the Jackson-Vanik Amendment before
the December, 18 2005 Congressional recess.
We invite the public to participate in the Coalition's
campaign to have Ukraine graduated from Jackson-Vanik by the end of
HISTORICAL BACKGROUND ON THE AMENDMENT
The Jackson-Vanik Amendment, as contained in Title IV
of the 1974 U.S.Trade Act, was a response to the discriminatory emigration
policies of the former Soviet Union and other communist states. The
communist restrictions had the most serious impact on religious minorities,
particularly on the
ability of Soviet Jews to emigrate.
From the perspective of the United States, these restrictions
on the free movement of persons were actionable human right violations
that justified harsh U.S. trade consequences.
The Jackson-Vanik Amendment stated that non-market economies
that continued to impose emigration restrictions on their citizens would
not be granted permanent normal trade relations or "most favored
nation" status by the United States.
Ukraine is still waiting to be formally graduated from
Jackson-Vanik, despite the fact that President Bill Clinton in 1997
found Ukraine to be in full compliance with the Amendment's freedom-of-emigration
requirements. Several former Soviet states have already been graduated,
including Georgia and Kyrgyzstan in 2000 and Armenia in 2004.
Various non-governmental groups, including the National
Conference on Soviet Jewry, the Euro-Asian Jewish Conference and the
Heritage Foundation, agree that over its thirty-year lifespan, Jackson-Vanik
has served the important purpose of securing freedom of emigration for
However, they also believe that Ukraine has demonstrated
its full compliance with the Amendment's objectives and therefore should
be graduated from the trade restrictions it imposes.
Today's Ukraine, colored by the democratic Orange Revolution,
has been applauded by President Bush and Congress for its free-market
reforms and open-governance policies.
Ukraine's graduation from Jackson-Vanik is therefore an
important affirmation of Ukraine's successful democratization and President
Yushchenko's global economic agenda.
The Heritage Foundation's Dr. Ariel Cohen has said, "The
U.S. has supported the triumph of democracy in Ukraine and is interested
in a Ukraine that is stable, prosperous, and integrated in Euro-Atlantic
structures. Washington should demonstrate unwavering support for Ukraine's
pursuit of its democratic
Before the House International Relations Committee in
July 2005, Ambassador Daniel Fried, Assistant Secretary for European
and Eurasian Affairs, U.S. State Department, testified that, "Ukraine
has complied with the provisions of the Jackson-Vanik Amendment to the
Trade Act of 1974 for over a decade. This Administration strongly supports
Ukraine's immediate "graduation" from Jackson-Vanik.
As the Ukrainian people look for tangible signs of our
new relationship, they are perplexed that Ukraine remains tainted by
the legacy of Jackson-Vanik. We urge Congressional action on this matter."
The U.S.-Ukraine Foundation and the Jackson-Vanik Graduation
Coalition believe that graduating Ukraine from the Jackson-Vanik Amendment
this year is precisely how the U.S. should demonstrate its unwavering
support of Ukraine.
JACKSON-VANIK'S TRADE RESTRICTIONS
In addition to the historical human rights concerns that
prompted the 1974 Amendment, it is also important to consider the current
political and trade implications of Jackson-Vanik's continued application
Since President Clinton's 1997 finding of full compliance,
which was highlighted in a July 1998 joint statement by the U.S.-Ukraine
Binational Commission, led by U.S. Vice President Al Gore and Ukrainian
President Leonid Kuchma, Ukraine has received normal trade relations
status under the full compliance provision of the Jackson-Vanik Amendment.
However, as early as 1992, President George H.W. Bush
exercised his presidential waiver authority to extend normal trade relation
treatment to Ukraine. Non-normal trade relations status allows the U.S.
to impose higher tariffs on imports as well as non-tariff barriers such
However, the 1992 presidential waiver of the Amendment's
trade restrictions and the 1997 finding of full compliance have meant
that Ukraine's import and export sectors have nonetheless enjoyed normal
trade relations status and have not been directly harmed by U.S. tariffs
or barriers resulting from
Jackson-Vanik. One important reason for desiring permanent normal trade
relations status, as would be achieved by graduation from the Jackson-Vanik
provisions, is the significance of permanent status to the global trade
Economists show that permanent normal trade relations
status, much like market-economy status, improves foreign investment
opportunities and the bargaining power of domestic business in trade
This is mainly because permanent normal trade relations
and market-economy status both indicate domestic economic stability
and the fact that the country abides by the global trade rules.
JACKSON-VANIK'S POLITICAL IMPLICATIONS
Ukraine's current status (in full compliance, but still
subject to Jackson-Vanik) also carries a negative political connotation.
Continued application implies that Ukraine has not met the requirements
Jackson-Vanik. This is distressing to Ukrainians and friends of Ukraine
who believe - correctly - that Ukraine has fully met the Amendment's
This is why Jackson-Vanik graduation has figured so prominently
on President Yushchenko's agenda with the United States. According to
Peter Savodnik's September 29, 2005 article in the Wall Street
Journal (Europe,) "A Step Towards Normalcy, "Delaying an end
to Jackson-Vanik -- for whatever reason -- would hinder the democratic
transition by depriving Mr. Yushchenko of a much-needed
political win. By lifting Jackson-Vanik this year, before the parliamentary
campaign begins in earnest, Washington would let everyone know that
the Ukrainian president is not alone."
THE CONGRESSIONAL RESPONSE
Six bills were introduced in the 109th Congress to graduate
Ukraine from Jackson-Vanik, three in the House and three in the Senate:
S. 410 by Senator John McCain, S.632 by Senator Richard Lugar and S.
46 by Senator Carl Levin, H.R. 885 by Representative Henry Hyde, H.R.
1170 by Representative Sander Levin and H.R. 1053 by Representative
On November 18, 2005 the U.S. Senate passed bill S.
632 to graduate Ukraine. But now the House of Representatives must also
pass legislation to graduate Ukraine from the Jackson-Vanik Amendment.
The House Ways and Means Committee is currently considering several
possible bills. But some in Congress seem unwilling to move on the issue
of Ukraine's graduation, apparently believing that maintaining the Amendment's
application to Ukraine allows the U.S. to retain leverage when challenging
certain trade issues, including Ukraine's importation of American poultry.
Another concern in the U.S. Congress has been Ukraine's
historically weak intellectual property protection laws. In 2001, such
concerns led the U.S. to designate Ukraine as a "Priority Foreign
Country" under its Special 301process, which placed Ukraine on
a list of the biggest violators of intellectual property standards.
The U.S. subsequently withdrew certain trade benefits from Ukraine.
However on August 2, 2005, the Verkhovna Rada passed a
Laser-Readable Disk Law, which significantly strengthened the intellectual
property regime (IPR) in Ukraine. (The law also meets crucial WTO membership
requirements by creating enforcement mechanisms to counter the illegal
production of CDs and DVDs.) Since August, the Ukrainian parliament
has continued to pass IPR laws to come into further compliance with
WTO requirements. It is now speculated that Ukraine will be prepared
to join the WTO by early 2006.
As a result of Ukraine's efforts, on August 31, 2005,
U.S. Trade Representative Rob Portman announced that all tariff sanctions
that had been placed on Ukrainian exports to the United States were
now being lifted.
Portman commended President Yushchenko and Prime Minister
Tymoshenko for "their personal involvement in securing passage
of these amendments, which is expected to improve Ukraine's protection
of intellectual property rights."
TO GET INVOLVED
The U.S. House is currently considering three bills to
graduate Ukraine from Jackson-Vanik and extend normal trade relations
status to Ukraine: H.R. 1053 by Representative Jim Gerlach, H.R. 885
by Representative Henry Hyde, and H.R. 1170 by Representative Sander
Levin. All bills are awaiting committee consideration, therefore it
is very important that members of the House show there support for these
bills by adding their names as Co-Sponsors.
The U.S.-Ukraine Foundation's Policy Dialogue and the
Jackson-Vanik Graduation Coalition believe that now is the appropriate
time for Congress to graduate Ukraine form Jackson-Vanik. The Coalition
is currently expanding its network of support and developing an action
plan for working with Congress to achieve the goal of Ukraine's graduation
by the end of this year.
The U.S.-Ukraine Foundation urges your participation in
the Jackson-Vanik Graduation Coalition.