Order Code 98-545 E
CRS Report for Congress
Received through the CRS Web
The Jackson-Vanik Amendment: A Survey
Updated September 22, 2000
Vladimir N. Pregelj
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

---

The Jackson-Vanik Amendment: A Survey
Summary
The enactment of the Jackson-Vanik amendment as part of the Trade Act of
1974 was directly a U.S. reaction to the severe restrictions the Soviet Union had
placed in late 1972 on the emigration of its citizens, but was expanded in its scope to
apply to all so-called “nonmarket economy” (NME) countries. The amendment
requires compliance with its specific free-emigration criteria as a key condition for the
restoration of certain economic benefits theretofore denied to NME countries in their
economic relations with the United States. These benefits (nondiscriminatory—
most-favored-nation—treatment in trade; access to U.S. government financial
facilities; ability to conclude a trade agreement with the United States) may be
extended to an NME country subject to the amendment if the President determines
that the country is not in violation of the emigration criteria of the amendment, or if
he waives, under specified conditions, the requirement of full compliance with the
criteria. Such determinations or waivers must be renewed periodically.
Although the determinations of full compliance, or its waivers, do not require
congressional approval, they may be rescinded, at the time of their annual renewals,
by the enactment of joint resolutions of disapproval, for which a special fast-track
procedure is provided. Although frequently initiated, congressional attempts to
disapprove such renewals, particularly with respect to China, have invariably been
unsuccessful.
Under these provisions, waivers have been granted to 25 countries, almost all of
which have been subsequently determined to be in full compliance, and some of these
have later, by law or other circumstance, been excluded altogether from the purview
of the amendment, as have several others with respect to which the amendment had
never been used.
In consequence, there are, at present, still 16 countries arguably subject to the
amendment, of which 3 are in compliance with its requirements by waiver and 10 by
determination of no violation, and 3 still not in compliance (and, hence, continue to
be denied the benefits contingent on such compliance).
This report will be updated as events warrant.

---

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Provisions of the Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Application of the Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

---

The Jackson-Vanik Amendment: A Survey
Background
The enactment of the so-called Jackson-Vanik (“freedom-of-emigration”)
amendment of the Trade Act of 1974 was a U.S. reaction to the Soviet Union’s highly
restrictive emigration policy of the time, but particularly to the assessment, begun in
August 1972, of exorbitant “education reimbursement fees” (also referred to as
“diploma taxes”) on its citizens wishing to emigrate to nonsocialist countries..
Although this restrictive policy applied to all such prospective emigrants, it affected
in practice primarily Soviet Jews wanting to emigrate to Israel or the United States.
These fees, which could be as high as several tens of thousands of dollars, were
assessed as a reimbursement to the Soviet state of its expenditures for the free higher
education that the prospective emigrant had received and, because of his departure,
would no longer use for the benefit of the Soviet society. The fees were geared to the
level of education received (a factor of increase) and the length of time elapsed since
obtaining the education, that is, the time during which the Soviet society had
benefitted from that education (a factor of decrease).
The institution of these fees took place at a time when the United States and the
Soviet Union already had negotiated several bilateral economic agreements and were
in the process of negotiating others. Among the latter was a trade agreement,
including a reciprocal grant of “most-favored-nation” (MFN; nondiscriminatory) tariff
treatment. Although the subject matter of a specific bilateral agreement, MFN status,
however, could not be restored to the Soviet Union (or to any other communist
country whose MFN tariff status had been suspended1) without authorizing
legislation, which was then being considered by Congress.
To counteract primarily the Soviet Union’s restrictive emigration policy (but
broadened to apply also to other communist countries), legislation sponsored
principally by Senator Henry M. Jackson and Representative Charles A. Vanik and
cosponsored by a large number of Members of both houses, was introduced in early
October 1972 as a free-standing measure in the House and as an amendment to the
East-West Trade Relations Act in the Senate. The legislation would condition the
restoration of most-favored-nation status to nonmarket economy (NME) countries
(including the Soviet Union) and their access to U.S. financial facilities on their
compliance with the free-emigration criteria. Despite the introduction of this adverse
1 As provided for by the Reciprocal Trade Agreements Act of 1951, the United States
suspended the MFN tariff status (but no other aspects of the MFN policy then in effect) of all
then communist countries except Yugoslavia. Prior to the enactment of the Jackson-Vanik
amendment, Poland’s nondiscriminatory tariff status had been restored by presidential action
in 1960, and Cuba’s suspended in 1962.

---

CRS-2
legislation, a most-favored-nation agreement with the Soviet Union was signed in
mid-October 1972.
Neither the East-West Trade Relations Act nor the separate freedom-of-
emigration legislation, however, was enacted in 1972, but virtually identical language
was included the following year, in the next Congress, as an original provision2 in the
Trade Reform Act of 1973 (eventually enacted as the Trade Act of 1974) and
somewhat expanded during the legislative process, even though the Soviet Union
already in late 1972 had ceased assessing the fees. The Soviet Union objected to the
provision, considering it an intrusion into its domestic policy and, after its enactment,
in January 1975 declined to have the restoration of its access to nondiscriminatory
status as provided for in the agreement and other benefits subjected to its conditions.
Provisions of the Amendment
The Jackson-Vanik amendment (Section 402 of the Trade Act of 1974, as
amended; 19 U.S.C. 2432) sets a policy of free emigration as a condition and key
element of the restoration3 of certain specific economic benefits to a “nonmarket
economy” (NME) country and of their subsequent continuation in force, under the
relevant provisions of Title IV of the Act. These benefits are: the country’s most-
favored-nation4 (MFN; nondiscriminatory) tariff status in its trade with the United
States; its access to U.S. government financial facilities (export credits, export credit
guarantees, and investment guarantees)5; and its ability to conclude a bilateral trade
agreement with the United States (on the basis of which the MFN status is granted).
Neither the amendment nor any other statute in effect at the time of its enactment
contained a definition of a “nonmarket economy country”6 or provided a specific
list or even a functional description of the affected countries, which could be used to
determine precisely the country applicability of Title IV as a whole (containing, in
addition to the Jackson-Vanik amendment, other provisions affecting NME
2 The provision, however, has continued to be referred to as the Jackson-Vanik “amendment.”
3 The suspensions of the nondiscriminatory tariff status of “communist countries,” based on
the 1951 Act, in effect at the time of the enactment of the Trade Act of 1974 and contained
in General Headnote 3(d)of the Tariff Schedules of the United States (19 U.S.C. 1202), have
been specifically continued in force by Section 401 of the Trade Act (19 U.S.C. 2431).
4 Although the term “most favored nation” has been replaced in 1998, by law, in existing and
future U.S. statutes with that of ”normal trade relations (NTR)”, it is still used in this report
for reasons of historical continuity and because of its continued universal use in international
trade relations and agreements, including those to which the United States is a party.
5 Access to such facilities is also subject to other restrictions, which, however, may be—and,
as needed, have been—waived by the President.
6 A formal, statutory definition of a “nonmarket economy country” (which could, in principle,
be used to determine the applicability of the Jackson-Vanik amendment) was not enacted until
the Omnibus Trade and Competitiveness Act of 1988 in the context of antidumping action;
a virtually identical practical definition by regulation has been in use since 1984 in
countervailing action against subsidized imports.

---

CRS-3
countries). As reflected in the implementation of certain provisions of Title IV in
subsequent practice (cf. footnote 21), an NME country has generally been considered
to be any communist country. Yugoslavia, initially counted among Title IV NME
countries, was dropped from that category in early 1981.
Somewhat better defined is the country applicability of the amendment itself
in its role as a means for the restoration of the covered benefits. In its subsection (e),
the amendment specifically exempts from its purview “any country the products of
which are eligible for the rates set forth in rate column numbered 1 of the Tariff
Schedules of the United States on the date of the enactment of [the Trade Act of
1974],” that is, any country which on January 3, 1975, was being denied
nondiscriminatory tariff treatment by the United States.
Moreover, the applicability of the amendment to individual countries is
operationally tied to Section 401 of the Trade Act (19 U.S.C. 2431). Although this
section deals directly with the restoration of the nondiscriminatory treatment, it is
complementary to subsection (e) of the Jackson-Vanik amendment and together with
it indirectly provides a functional definition of the countries to which the amendment
applies. In effect, Section 401 requires that the suspensions of nondiscriminatory tariff
treatment under the 1951 Act continue in force, unless rescinded under the relevant
provisions of Title IV of the Trade Act, including its Section 402. It provides that
[e]xcept as otherwise provided in this title [i.e., Title IV of the Trade Act], the
President shall continue to deny nondiscriminatory treatment to the products of
any country, the products of which were not eligible for the rates set forth in
rate column number 1 of the Tariff Schedules of the United States on the date
of the enactment of this Act.”
In explaining the provisions of Section 401, the relevant Senate report contains
a list naming (in a somewhat simplified form) individually the countries and areas
which were at the time of the enactment of that Act being denied nondiscriminatory
status7, and explains further that that means all then-communist countries or areas
except Poland and Yugoslavia (exempted under Section 402 (e)).8 The official list of
countries denied such status, hence, ineligible for concessional duty rates in column
1 applied, was contained at the time in General Headnote 3(e) of the Tariff Schedules
of the United States (TSUS) under the title Products of Communist Countries. The
provision has continued to apply to the same countries or their successors (except
7 Albania, Bulgaria, China, Cuba, Czechoslovakia, East Germany, Estonia, Hungary, those
parts of Indochina (Cambodia, Laos, or Vietnam) under communist control or domination,
North Korea, the Kurile Islands, Latvia, Lithuania, Outer Mongolia, Romania, Southern
Sakhalin, Tanna Tuva, Tibet and the USSR. The list initially included also “Poland and area
under Polish domination or control” (see also footnote 1).
8 U.S. Congress. Senate. Committee on Finance. Trade Reform Act of 1974; report ... on H.R.
10710. 93d Congress. 2d Session. (S.Rept. 93-1298). November 26, 1974. Washington, U.S.
Govt. Print. Off., 1974. p. 201.

---

CRS-4
those which have since been removed from its applicability by specific legislation or
in some other way9), although most of them are no longer communist.
The list was a consolidation of individual country suspensions of MFN treatment
put into effect in a series of presidential documents promulgated in 1951 and 1952
under the authority of Section 5 of the Trade Agreements Extension Act of 1951, and
still reflected the immediate post-WWII changes of international borders before these
were definitively settled. Although the names of several countries were already
outdated at the time, their list became part of the U.S. tariff law after their
consolidation and incorporation without changes of names as General Headnote 3(e)
(later renumbered as 3(d)) into the totally revised and restructured basic tariff
document, the TSUS (enacted by Section 101 of the Tariff Classification Act of 1962,
effective January 1, 1963). They remained unchanged10 until January 1, 1989, when
the tariff schedules were again radically restructured in the form of the Harmonized
Tariff Schedule of the United States (HTSUS) (enacted by Section 1204 of the
Omnibus Trade and Competitiveness Act of 1988).
In the HTSUS, the country list has been simplified to conform to the current
names of the countries involved, including a belated change of its applicability from
the communist controlled areas of Cambodia (in the HTSUS called Kampuchea),
Laos, and Vietnam to the entire areas of those countries. The provision also became
General note 3(b) with its title changed to Rates of Duty Column 2 (i.e., duty rates
applicable to countries without the nondiscriminatory status).
Although the introductory sentence of the Jackson-Vanik amendment mentions
“the continued dedication of the United States to fundamental human rights,” its
operative provisions condition the restoration of the access of an NME country to
the covered benefits solely on the country’s freedom-of-emigration policy.
The amendment prohibits the restoration of nondiscriminatory status and
access to U.S. government financial facilities to an NME country, and disallows the
conclusion of a commercial agreement with it, if that country:
(1) denies its citizens the right or opportunity to emigrate;
(2) imposes a more than nominal tax on emigration or on documents
required for emigration; or
(3) imposes a more than nominal tax, fee, or any other charge on any
citizen because of his desire to emigrate to the country of his choice.
9 See p. 7 and ff.
10 Being a current list of countries without the nondiscriminatory status (rather than a list of
countries subject to the Jackson-Vanik amendment), the TSUS note (and later the comparable
HTSUS note) has at no time contained the names of the countries whose nondiscriminatory
status had meanwhile been restored conditionally under the provisions of Title IV, although
the amendment has continued to apply to them.

---

CRS-5
The amendment also provides that its prohibitions apply to an NME country
“during the period beginning with the date on which the President determines that
such country [engages in any of the listed freedom-of-emigration restricting practices]
and ending on the date on which the President determines that such country is no
longer in violation of [the amendment’s prohibitions].” In actual practice, however,
there have been no formal presidential determinations of the onset of the application
of the prohibition with respect to any country, and presidential determinations of
cessation of violation have been of temporary nature and have had to be renewed
semiannually (see next paragraph).
The ban on an NME country’s access to the benefits to which the amendment
applies may be removed temporarily if the President initially and then semiannually (by
June 30 and December 31) determines and reports to Congress that the country is not
in violation of the prohibition of emigration-restricting practices. Alternatively, the
President may initially and then annually (in mid-year) waive full compliance with the
free-emigration criteria if he reports to Congress (1) that he has determined that the
waivers will henceforth substantially promote the free-emigration objectives of the
amendment and (2) that he has received assurances that the emigration practices of
the country will lead substantially to the achievement of the amendment’s objectives.
In either case, presidential determinations are subject to disapproval by Congress (see
below, Congressional involvement).
The overall waiver authority, granted to the President by the Trade Act (with
effect on January 3, 1975) for an initial period of 18 months, and any waivers issued
under it, may be extended, if the President recommends such extension to Congress,
for additional 12-month periods, expiring each year on July 3. The waiver extension
recommendation is subject to the same conditions as the initial waiver and must be
made at least 30 days before the prospective annual expiration of the authority (i.e.,
by June 3 of every year). It must be made in a document transmitted to both houses
of Congress, in which the President must state his reasons for recommending the
extension of the overall waiver authority. He also must determine for each country
with respect to which a waiver already in effect is to be renewed that such renewal
will substantially promote the objectives of the amendment, and state his reasons
therefor.
`
Congressional involvement in the implementation of the President’s Jackson-
Vanik authority is limited. Presidential determinations, reports, and/or
recommendations, required for the initial granting and/or periodic continuation of a
country’s eligibility, under the amendment, for the covered benefits, operate
automatically and need not be approved by Congress.11 They are, however, subject
to congressional disapproval, namely, the initial and the December 31 (but not the
June 30) report of “no violation” of (i.e., of full compliance with) the free-emigration
criteria, or the annual mid-year recommendation to extend the waiver authority as
11 The key benefit conditioned on compliance with the Jackson-Vanik amendment — the
restoration of nondiscriminatory tariff treatment in trade — however, is subject to initial
congressional approval (by joint resolution) of a bilateral trade agreement, among other
provisions, extending nondiscriminatory status to the country in question, and to subsequent
triennial presidential renewals of the agreement.

---

CRS-6
such and any extant waiver, may be disapproved by joint resolution of Congress.
Such a resolution can be initiated in either house but, in view of its being considered
a revenue measure, must eventually be enacted as a House measure. Hence,
disapproval of the waiver renewal cannot take place if no disapproval resolution has
been introduced in the House, or if the House resolution has been defeated.
A joint resolution disapproving the initial or the year-end report of “no
violation” must be enacted under its specific fast-track procedure: the operative
language of the resolution is prescribed by law; after its introduction and referral to
the appropriate committee of jurisdiction (House Ways and Means; Senate Finance),
the resolution must be reported within 30 days of session; if the committee does not
report it by that deadline, a motion to discharge it from further consideration of the
resolution may be made under a specially provided procedure; the resolution is
nonamendable and debate on it is limited; if the House and the Senate resolutions are
not identical (e.g., apply to different countries), the final language is determined by
conference; the resolution must be enacted (as a House measure12) within 90 session
days from the date on which the President’s report has been delivered to Congress;
if the resolution is vetoed by the President, it is treated as enacted on the day by which
the veto has been overridden by both houses either within the 90-day deadline or
within 15 session days after the veto message had been delivered to Congress,
whichever is later. Both, the 90- and the 15-session-day period are computed by
excluding the days on which either house is not in session because of an adjournment
of more than 3 days to a day certain or an adjournment sine die.13
A joint resolution disapproving the mid-year recommendation to extend the
waiver authority (in its entirety or, more likely, with respect to individual countries),
is considered and adopted by Congress under its own specific fast-track procedure,
very similar to that for disapproving the “no violation” report, discussed above. This
procedure, set out principally in Section 153 of the Trade Act (19 U.S.C. 2193),
differs from the other one only in that it sets the deadline for the committee report on
the resolution at 30 calendar (rather than session) days after its introduction; allows
amendments to the resolution, but only with respect to the country or countries to
which it applies; and, in view of this change, modifies slightly the Senate floor debate
procedure. The resolution must be adopted and transmitted to the President within
60 calendar days from the date the waiver authority of the prior year would have
expired without the recommendation for extension (i.e., by August 31). If the
resolution is vetoed, the vote to override it must be taken within the 60-day period or
within 15 days of session (computed as above) after the Congress has received the
veto message, whichever is later.14
12 See footnote 15.
13 For details of the procedure governing the consideration and enactment of a joint resolution
disapproving a no-violation report, consult, in addition to the Jackson-Vanik amendment itself,
Sections 152(a)(2)-(f), 154(b), and 407(c)(2) of the Trade Act (19 U.S.C. 2192(a)(2),
2194(b), and 2437(c)(2)-(f)).
14 As in the case of the disapproval of the no-violation report (see previous footnote), much
of the legislative procedure for the consideration of resolutions disapproving the extension of
the waiver authority is not contained in the Jackson-Vanik amendment. The key statute is
(continued...)

---

CRS-7
If a waiver disapproval resolution has been adopted in either house, the same
house may not consider another resolution with respect to the same recommendation
(other than a resolution adopted by and received from the other house).15
A joint resolution disapproving either the initial or the year-end report of “no
violation” of the Jackson-Vanik criteria or the mid-year extension of the waiver
authority takes effect on the 61st day after its enactment and as of that date terminates
the determination of “no violation” or the country’s waiver. Any country’s waiver
can also be terminated at any time by law or executive order, or, at the time of its
annual renewal, by not being recommended for renewal.
The discontinuance of either type of a country’s compliance with the
requirements of the Jackson-Vanik amendment, whether by presidential action or
legislative disapproval, brings about the termination not only of the country’s
nondiscriminatory tariff status but also of its access to the other benefits covered by
the amendment, whether or not authorized under their own specific statutes.
Conversely, the restrictions of the Jackson-Vanik amendment on access to benefits
other than nondiscriminatory tariff status are removed merely by compliance with the
provisions of the amendment and are not contingent on the restoration of the
country’s nondiscriminatory status.
Application of the Amendment
Of the two ways of complying with the Jackson-Vanik requirements, the waiver
provision has been used more frequently and always as the initial way. It was applied
for the first time on April 24, 1975 — still under the initial waiver authority and only
a few months after its enactment — in connection with the extension of
nondiscriminatory treatment to Romania. On March 17, 1978, Romania was followed
by Hungary, and further initial waivers were issued for China (with Tibet) (October
23, 1979); Czechoslovakia (February 20, 1990); East Germany (August 15, 1990);
Soviet Union (including the three Baltic republics: Estonia, Latvia, and Lithuania16)
14 (...continued)
Section 153 of the Trade Act (19 U.S.C. 2193) in conjunction with its Section 152 (19 U.S.C.
2192). Both sections are considered an exercise of the rulemaking power of either house of
Congress and may be changed by either house with respect to its own procedure in the same
manner and to the same extent as any other rule (Section 151(a), Trade Act of 1974; 19
U.S.C. 2191(a)). — Detailed step-by-step procedure for the enactment of a joint resolution
disapproving the annual extension of the waiver authority (focusing specifically on China, but
applicable generally) is described in Legislative Procedure for Disapproving the Renewal of
China’s Most-Favored-Nation Status (CRS Report 96-490).
15 Nevertheless, since a waiver disapproval resolution is considered a “revenue” measure and
as such must originate in the House, the House could not vote on a Senate resolution after its
own resolution had been defeated.
16 Neither the Presidential determination to issue a waiver for the Soviet Union nor the
executive order granting it specifically mentioned their applicability to the three Baltic
republics, then still de facto part of the Soviet Union. Their inclusion in the Soviet Union’s
(continued...)

---

CRS-8
(December 29, 1990); Bulgaria (January 22, 1991); Mongolia (January 23, 1991);
Romania (second waiver; see next paragraph) (August 17, 1991); Armenia (April 6,
1992); Belarus, Kyrgyzstan, Russia, Ukraine, and Uzbekistan (April 16, 1992);
Albania, Azerbaijan, Georgia, Kazakhstan, and Moldova (June 3, 1992); Tajikistan,
and Turkmenistan (June 24, 1992); and Vietnam (April 9, 1998). In every instance,
except as yet in that of Vietnam, the issuance of a waiver was followed by the
temporary restoration of nondiscriminatory status, based on a trade agreement (which
has already been signed with Vietnam but is yet to be ratified by Vietnam’s National
Assembly and submitted to Congress for approval); and in every case, including
Vietnam’s, the waiver opened up the possibility of access to other covered benefits
(some of which are subject to autonomous restrictions which can be — and have been
— overcome by requisite presidential waiver or determination).
Annual recommendations of the extension of the Jackson-Vanik waiver authority
and waivers in effect were being made prior to 1990 regularly for all countries in a
group; since then, they have been made separately for China and for the other
countries still subject to the waiver procedure (at present, Belarus, and Vietnam).
From 1988 through 1991, Romania was omitted from the group recommendation
because, in June 1988, it had formally renounced (with effect on July 3, 1988) its
nondiscriminatory status subject to the conditions of the Jackson-Vanik amendment.
Its waiver was restored on August 17, 1991, in preparation for the restoration of
Romania’s nondiscriminatory status under a new trade agreement with the United
States, eventually concluded in April 1992.
Since the beginning of the program, congressional action to disapprove the
extension of any country’s waiver by means of a joint (prior to mid-1990, a one-
house17) resolution has focused on only four countries. In 1975-1984 (94th-98th
Congresses), 11 such resolutions were introduced in either house with respect to
Romania; one each in 1982 and 1983 (97th and 98th Congresses), with respect to
China; and in 1983 (98th Congress), one with respect to Hungary. None of these
were approved in either house. Seven of them (among them all four Senate
resolutions) died in committee; one was in effect defeated in the House, when a
motion to discharge the Ways and Means Committee from its consideration was
tabled; the remainder were either defeated or indefinitely postponed in floor votes.
No disapproval resolutions were introduced in the 99th and 100th Congresses and in
the first session of the 101st Congress (1985-1989). Since then, except for the
16 (...continued)
waiver was noted only in the President’s letter notifying congressional leaders of his
determination to issue the waiver, with the explanation that it in no way affected the long-
standing U.S. policy of not recognizing their incorporation into the Soviet Union. Under the
same policy, their nondiscriminatory status had been suspended in 1951 individually and
separately from the Soviet Union, with formal acquiescence by their individual diplomatic
representations in Washington, which continued to be recognized by the United States.
17 The type of the disapproval resolution was changed — with some delay — by Section
132(a) of P.L. 101-382 of August 20, 1990, from simple to joint because of the June 23,
1983, decision of the U.S. Supreme Court in U.S. Immigration and Naturalization Service
v. Chadha, which found legislative vetoes (e.g., disapproval of presidential action by
concurrent or simple resolution) unconstitutional.

---

CRS-9
resolutions disapproving the mid-1998, mid-1999, and mid-2000 extensions of
Vietnam’s waiver (defeated in the House, respectively, on July 30, 1998, August 3,
1999, and July 26, 2000), disapproval resolutions have been introduced since 1989
only with respect to the extensions of the China waiver, initially triggered by the
Tiananmen Square incident of June 4, 1989.
Although the incident occurred only a few days after the recommendation of the
waiver extension for all countries, including China (which would have made possible
the adoption of a resolution disapproving China’s waiver by the statutory deadline of
August 31), no disapproval resolutions were introduced in 1989. Since then,
disapproval resolutions of waiver extensions for China have been introduced in every
session: five were introduced in the next year (101st Congress, 2nd session), of which
one was passed by the House but did not come to vote in the Senate.18 In both
sessions of the 102nd Congress, disapproval resolutions were adopted by the House
but indefinitely postponed or not acted upon by the Senate. The disapproval
resolutions introduced every year since then were defeated already in the House, thus
precluding any action by the Senate. Thus, all attempts at disapproving the annual
renewal of China’s waiver have, thus far, been unsuccessful.19
As has been clear ever since the beginning of congressional action to disapprove
the annual extensions of the Jackson-Vanik waiver authority, issues other than
freedom of emigration also have been given as reasons for such disapprovals. This
has been the case particularly with extensions of China’s waiver: violation of human
rights in general (restriction of religious freedom and ethnic minority rights, forced
labor), unfair trade practices, U.S. bilateral trade deficits (focusing on the trade effects
of reduced import-duty rates due to nondiscriminatory treatment), proliferation of
nuclear and other weapons, and some others. In the case of Vietnam, opposition to
the waiver extension has been based on Vietnam’s unsatisfactory emigration policy,
denial of human and religious rights, and lack of proper accounting for the POWs and
MIAs.
At present, Jackson-Vanik waivers are in effect with respect to only 3 of the 15
countries still subject to the amendment, namely: Belarus, China (with Tibet)20, and
Vietnam. Most of the remaining countries at any time subject to the Jackson-Vanik
amendment have been either “upgraded” through having been determined as not in
violation of the amendment’s requirements, but still subject to it, or have been removed
from its application entirely by enactment or other appropriate action (see below).
18 In that Congress and in every Congress since, however, numerous bills have been introduced
to terminate, restrict, or further condition China’s nondiscriminatory status, the principal
benefit subject to the Jackson-Vanik requirements. Only two were enacted by Congress (in
1992) but vetoed by the President and the veto was upheld by the Senate.
19 For detail, see CRS Report RL30225, Most-Favored-Nation Status of the People’s
Republic of China.
20 China’s waiver will be terminated upon the implementation of H.R. 4444, which authorizes
the termination of the application of Title IV and the extension of permanent
nondiscriminatory treatment to China. This action, however, cannot take place before China’s
accession to the World Trade Organization, possibly by the end of the year 2000.

---

CRS-10
Consequently, there remain at present only three countries to which the Jackson-Vanik
amendment ban applies: Cuba, Laos21, and North Korea.
In 17 instances, determinations of “no violation” of the freedom-of-emigration
requirements have been made by the President for NME countries to which
nondiscriminatory status and other covered benefits had already been restored under
the waiver provision. While this change of Jackson-Vanik amendment status in no way
changes a country’s nondiscriminatory treatment or its access to other covered
benefits, it does suggest a symbolic U.S. approval of its emigration policy. It also has
in several instances been the stepping stone to permanent restoration of the covered
benefits.
Such determinations were made for Hungary on October 26, 1989;
Czechoslovakia on October 16, 1991; Bulgaria on June 3, 1993; Russia on September
24, 1994; Romania on May 19, 1995; Mongolia on September 4, 1996; Armenia,
Azerbaijan, Georgia, Moldova, and Ukraine on June 3, 1997; and Albania, Kazakhstan,
Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan on December 5, 1997. Because
of subsequent terminations of the application of the Jackson-Vanik amendment to
several countries (see the next paragraph), the “no violation” determinations (all —
most recently — renewed in mid-2000) apply at present to 10 countries: Armenia,
Azerbaijan, Georgia, Kazakhstan, Moldova, Russia, Tajikistan, Turkmenistan,
Ukraine, and Uzbekistan.
The application of Title IV of the Trade Act of 1974, including the Jackson-
Vanik amendment, has been terminated with respect to eight countries already
determined to be in full compliance, at the time when permanent nondiscriminatory
status was granted to them by specific law. The countries and the relevant legislation
are: Czechoslovakia (on January 1, 1993, split into the Czech Republic, and Slovakia)
and Hungary (Section 2, P.L. 102-182, with effect on April 14, 1992); Bulgaria (P.L.
104-162, October 1, 1996); Romania (P.L. 104-171, November 12, 1996), Mongolia
(Section 2424, P.L. 106-36; June 25, 1999), and Albania and Kyrgyzstan (Sections
301 and 302, P.L. 106-200; June 29, 2000).
Moreover, the application of Title IV (including the Jackson-Vanik amendment)
to the three Baltic republics (Estonia, Latvia, and Lithuania), whose waiver had been
included in the Soviet Union’s waiver, was terminated, after their individual
declarations of independence from the Soviet Union during the course of 1991, by
legislation directly granting them permanent nondiscriminatory status (Title I, P.L.
102-182), with effect on December 19, 1991.22
Application of Title IV to East Germany was terminated upon the unification of
East and West Germany as of October 3, 1990. The termination was put into effect
by the Department of the Treasury’s Office of Commercial Operations Document 90-2
of September 28, 1990 (Customs Bulletin and Decisions, v. 24, no. 45/46, November
14, 1990, p. 4).
21 For controversy involving the applicability of the amendment to Laos’, see pp. 11-12.
22 See footnote 16.

---

CRS-11
Unlike in the legislation restoring permanent nondiscriminatory tariff status to
other countries whose nondiscriminatory tariff status had been suspended under the
1951 law, no specific provision terminating the application of Title IV was included
in comparable legislation in favor of countries altogether without nondiscriminatory
tariff status: in the 104th Congress, Cambodia (Kampuchea) (subsequently enacted as
P.L. 104-203) and, in the 105th Congress, Laos (favorably reported in the Senate, but
not further considered), with the obvious implication that neither had been subject to
the Jackson-Vanik amendment. Indeed, Senate Finance Committee’s reports on the
restoration of Cambodia’s and Laos’ nondiscriminatory status (respectively, S.Rept.
104-264 and S.Rept. 105-83) specifically state that “Title IV ... has never applied to
[either country]” and House Ways and Means Committee’s report on restoring
Cambodia’s permanent nondiscriminatory status (H.Rept. 104-160) similarly states that
“Title IV ... does not apply to Cambodia.”
On the other hand, the opposite position, namely, that the amendment (and by
implication Title IV) does apply to Vietnam, a country in very similar, but arguably not
entirely identical circumstances as Cambodia or Laos, has obviously been taken by the
President when he issued a Jackson-Vanik waiver for Vietnam.
The conclusions, in the reports, of nonapplicability of the entire Title IV to
Cambodia and Laos are questionable. In view of the legal and practical circumstances
which have had bearing on the issue, the only part of Title IV that arguably could not
apply to Cambodia and Laos (and, possibly, also not to Vietnam) is the Jackson-Vanik
amendment in its specific function as the means for restoring to them most-favored-
nation treatment. That is so because, at the time of the enactment of the Trade Act,
the denial of their nondiscriminatory status, the continuing application of which was
mandated by Section 401 of the Trade Act, specifically applied only to those parts of
the three countries that were at the time under communist domination or control. Such
control became total—and in fact subjected the entire country to the denial of
nondiscriminatory status—only after the enactment, on January 3, 1975, of the Trade
Act of 1974 and its exclusive dependence on the Jackson-Vanik amendment (and
related statutes) for the restoration of nondiscriminatory status to communist-
controlled areas.
Although the denial of nondiscriminatory status was expanded in fact (although
not formally), under the “communist-controlled area” provision (which still remained
in force), to the entire territory of the country in question once it fell under total
communist control, this fact was not recognized formally in the law until January 1,
1989. Only in the Harmonized Tariff Schedule of the United States (HTSUS), which
entered into force on that day, was the provision denying nondiscriminatory status
changed to apply to each of the three countries as a whole.
This change arguably created a functional discrepancy between, on the one hand,
the geographically partial 1974 application of the continued denial of the
nondiscriminatory tariff status by Section 401 of the Trade Act (the specifically
provided condition for the restoration of which status is compliance with the Jackson-
Vanik amendment) and, on the other, the actual need for a provision enabling the
restoration of the status to the entire country, created by the changed language of the
HTSUS.

---

CRS-12
These circumstances provide no basis for the conclusion that the entire Title IV
of the Trade Act does not apply, or has never applied, to Cambodia or Laos. Because
of the specific functional connection between Section 401 of the Trade Act, which
deals with the continued denial and restoration only of nondiscriminatory tariff status,
and the Jackson-Vanik amendment as an essential step in the procedure for restoring
it, the above mentioned circumstances can affect only the procedure for restoring
Cambodia’s and Laos’ nondiscriminatory status, rather than the actual current market
character of either country as an NME.
Hence, they cannot affect any other provisions or aspects of Title IV, which apply
to these countries in their broader concept of “nonmarket economy”or “communist”
countries rather than in the narrower one of nonmarket economy countries without
nondiscriminatory status. Nonapplicability — now or ever — of the entire Title IV
to Cambodia or Laos would mean, in effect, that neither country is, or ever has been,
a “nonmarket economy” or “communist” country.
The claim of nonapplicability of Title IV also is contradicted by the actual
implementation of some of its provisions. In fact, both countries were, in the past,
included in the quarterly reports on specific aspects of trade with nonmarket economy
countries, required in its Sections 410 and 411.23
23 Both of these reporting requirements have since been repealed: Section 410 by Section 17
of P.L. 104-295 (October 11, 1996) and Section 411 by Section 1401(b)(2) of P.L. 105-362
(November 10, 1998). These more recent repeals, however, do not put into question the
applicability of Title IV of the Trade Act—and the NME-country characterization—of either
country.

---