A Gift from America

US has made a present to Ukraine. Even if being half of what it could have been, this kind of support extended to Kyiv is noteworthy. The US Senate unanimously voted for the repeal of the Jackson-Vanik amendment last weekend. The next step is action by the House of Representatives and finally the US President’s signature. Few if any doubt that the senators’ initiative will be supported on both levels. It is just a matter of time. The more so that the US parliamentarians have had ample opportunity to weigh the pros and cons. The Jackson-Vanik amendment was included in the 1974 Trade Act to pressure the Soviet Union to permit free emigration, using punitive foreign trade tariffs and taxes. However, neither the USSR’s collapse nor Ukraine’s independence could make Congress change its attitude.

With the coming of political forces to power in Ukraine that are treated in a marked friendly manner by Washington, one would expect the amendment to be repealed there and then. We still vividly remember the US parliamentarians giving a standing ovation after Viktor Yushchenko’s speech on April 6 this year. And how US congressmen applauded in response to the Ukrainian president’s appeal for cancellation of the Jackson-Vanik amendment: “... take this step toward Ukraine, break down this wall.”

True, the amendment as such had long been on paper only and Congress would renew it every year for another year as proposed by the White House. This fact was even more perplexing because the amendment remaining formally effective meant not so much that the US parliamentarians somehow never got around to making the required decision, as that making the decision had to do with other issues. US Ambassador John Herbst told The Day on July 5 that Ukraine, of course, had many friends in Congress. A great many of them wanted the amendment repealed, but there were other interests to be kept in mind. He cited the US legislative practice whereby an amendment would be repealed several weeks prior to a given country being admitted to the WTO. Ukraine’s WTO membership in the near future is not on the agenda. Then why did Congress make the decision? Maybe they decided to make Ukraine an exception from the rule, the more so that the decision coincided in time with the first anniversary of the Orange Revolution. Needless to say, Kyiv accepted this present with gratification. The Ukrainian foreign ministry stressed that “It is a long-awaited measure that removes a problem from the Ukrainian-US agenda as a hangover of the cold war that did not conform to the spirit of Ukrainian- American strategic partnership.”

It is possible that the positive decision was facilitated by the Ukrainian government’s active endeavors. A coalition of sorts formed in the US recently, made up of former US ambassadors Stephen Pifer and William Miller. Among other things they worked on repealing the amendment. Until recently experts noted the absence of a strong lobby support in the US, but it then appeared as an ex-ambassadorial alliance. After all, the West (the US in particular) had to prove their support of reforms in Ukraine by practical deeds. If not demonstrated on a level such as repealing the amendment, it would be hard to discuss any other projects on a larger scale.

The Day asked former US Congressman John B. CONLAN, currently President of Conlan & Associates LLC, doing investment consulting in Kyiv.

Is it possible that the House of Representatives will automatically support the repeal of the Jackson-Vanik amendment?

It should. I don’t know if they legislate this week. This Thursday is Thanksgiving, so the congressmen will go home for vacation and there will be no meetings. I was originally co-sponsor of the Jackson-Vanik convent bill. I agree that it should be repealed. It has no effect right now because year by year the president is suspending the enforcement of that bill. But psychologically it’s nice to have it permanently removed.

Why didn’t they do so earlier?

Because the Ukraine’s government had no effective lobbying operation in Washington. They think if they just go and give the speech that’s all that is necessary. The congressmen have hundreds of bills and proposals to work on. Until now there wasn’t any organized push by the Ukrainian side. There’s been strong support for Ukraine in America. The problem is the Rada. They don’t pass any WTO legislation, they don’t pass any anti-corruption laws. What kind of a message does this send to the world?

One could describe the Senate’s decision as a gift for Ukraine on the eve of the first anniversary of the Orange Revolution.

Sure. It’s in sense a vote of confidence in the government and the direction the people and the national government are taking here. The changes in Ukraine are positive, but they need to go faster. There is many more changes are needed to bring Ukraine’s government into the twenty-first century. I think that the investment climate in Ukraine is now much better compared to what we had a year ago. I think everyone agrees with this.