Lugar offers repeal of Jackson-Vanik for Moldova
U.S. Sen. Dick Lugar has introduced legislation to repeal Jackson-Vanik restrictions on trade with Moldova and establish permanent normal trade relations with the country.
The Jackson-Vanik Amendment, named for its major co-sponsors, Sen. Henry "Scoop" Jackson (D-WA) and Rep. Charles Vanik (D-OH), was a response to the discriminatory emigration policies of the former Soviet Union. It was a response to an 1972 Cold War move of the regime of Leonid Brezhnev, which imposed the so-called "diploma tax" on would-be emigrants who received a higher education in the USSR. The Soviet abusive restriction was designed to combat the brain drain caused by the growing emigration of Soviet Jews and other members of the intelligentsia to the West. The Title IV of the 1974 U.S. Trade Act denied most favored nation to countries with non-market economies that restricted emigration rights.
Until now, the U.S. President had granted waiver to the provisions of Jackson-Vanik for Moldova on yearly bases, as it was the case for all ex-Soviet republics and other communist regimes. These days, the United States enjoys good relations with Moldova and the ex-Soviet republic liberalized its trade policy and emigration regulations, therefore, the 1974 Trade Act has lost its initial purpose in the case of Moldova. This country has been a member of WTO since 2001.
In the recent past, Senator Lugar has also introduced similar resolutions for Kazakhstan and Azerbaijan. An earlier measure was successful in restoring permanent normal trade relations with Ukraine, which has now been invited to join the World Trade Organization.
A copy of the bill is available at:
http://lugar.senate.gov/sfrc/pdf/jacksonvanik_moldova.pdf
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Following is Lugar’s Congressional Record statement:
Mr. President, I rise today to introduce legislation designed to extend permanent normal trade relations to Moldova. Moldova is still subject to the provisions of the Jackson-Vanik amendment to the Trade Act of 1974, which sanctions nations for failure to comply with freedom of emigration requirements. This bill would repeal permanently the application of Jackson-Vanik to Moldova.
Moldova is a small country located between Ukraine and Romania. Throughout the Cold War it was a part of the Soviet Union. It gained its independence from the Soviet Union on August 27, 1991. The United States has supported Moldova in its journey toward democracy and sovereignty.
The United States enjoys good relations with Moldova and has encouraged Moldovan efforts to integrate with Euro-Atlantic institutions. Moldova is an active participant in GUAM (Georgia, Ukraine, Azerbaijan and Moldova) group of countries that has recently concluded a new trade agreement with the EU.
Since declaring independence from the Soviet Union in 1992, Moldova has enacted a series of democratic and free market reforms. In 2001, Moldova became a member of the World Trade Organization. Until the United States terminates application of Jackson-Vanik on Moldova, the U.S. will not benefit from Moldova’s market access commitments nor can it resort to WTO dispute resolution mechanisms. While all other WTO members currently enjoy these benefits, the U.S. does not.
The Republic of Moldova has been evaluated every year and granted normal trade relations with the United States through annual presidential waivers from the effects of Jackson-Vanik. The Moldovan constitution guarantees its citizens the right to emigrate and this right is respected in practice. Most emigration restrictions were eliminated in 1991 and virtually no problems with emigration have been reported in the 16 years since independence. More specifically, Moldova does not impose emigration restrictions on members of the Jewish community. Synagogues function openly and without harassment. As a result, the Administration finds that Moldova is in full compliance with Jackson-Vanik’s provisions.
Since declaring independence from the Soviet Union in 1992, Moldova has enacted a series of democratic and free market reforms. Parliamentary elections in 2005 and local elections in 2007 generally complied with international standards for democratic elections. Moldova has also contributed constructively towards a resolution of the long-standing separatist conflict in the country’s Transniestria region, most recently by proposing a series of confidence-building measures and working groups.
The United States and Moldova have established a strong record of achievement in security cooperation. In 1997 the Nunn-Lugar Cooperative Threat Reduction Program responded to a Moldovan request for assistance. The U.S. purchased and secured 14 nuclear-capable MiG-29Cs from Moldova. These fighter aircraft were built by the former Soviet Union to launch nuclear weapons. Moldova expressed concern that these aircraft were unsecure due to the lack of funds and equipment necessary to ensure they were not stolen or smuggled out of the country. Specifically, emissaries from Iran had shown great interest and had attempted to acquire the aircraft. These planes were not destroyed. They were disassembled and shipped to Wright Patterson Air Force Base because they can be used by American experts for research purposes.
Moldova has made small, but important, troop contributions in Iraq. These contributions include significant demining capabilities and contingents of combat troops. I am pleased that the United States remains prepared to assist in weapons and ammunition disposal and force relocation assistance to help deal with the costs of military realignments in Moldova and to assist with military downsizing and reforms.
One of the areas where we can deepen U.S.-Moldovan relations is bilateral trade. In light of its adherence to freedom of emigration requirements, compliance with threat reduction and cooperation in the global war on terrorism, the products of Moldova should not be subject to the sanctions of Jackson-Vanik. The U.S. must remain committed and engaged in assisting Moldova in pursuing economic and development reforms. The government in Chisinau still has important work to do in these critical areas. The support and encouragement of the U.S. and the international community will be key to encouraging the Government of Moldova to take the necessary steps to initiate reform. The permanent waiver of Jackson-Vanik and establishment of permanent normal trade relations will be the foundation on which further progress in a burgeoning economic and energy partnership can be made.
I am hopeful that my colleagues will join me in supporting this important legislation. It is essential that we act promptly to bolster this important relationship and promote stability in this region.
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