The Magnitsky Bill could backfire, US would lose business as a result
December 31, 1969
In a move that is almost certain to strain already worsening relations between the United States and Russia, a Senate panel has moved ahead on the “Magnitsky Bill.”
The bill is said to replace the Jackson-Vanik Amendment which was enacted in 1974 and meant to restrict US trade relations with the Soviet Union for not allowing Jews to leave the USSR.
Though the Soviet Union is no longer, the Jackson Vanik Amendment still exists.
Ahead of Russia’s officially joining the WTO, the US Chamber of Commerce declared that lifting the restrictions associated with Jackson-Vanik was its main priority.
Those interested in trading with Russia want to ensure that the US does not end up on the losing end when Russia’s markets finally open up to the world and vice versa.
Instead of completely doing away with the bill, lawmakers are proposing a replacement. That replacement, however, may have an even worse effect in terms of trade relations, or any relations for that matter, with Russia.
Though the Magnitsky Bill is meant to target those allegedly involved with the death of lawyer Sergei Magnitsky, Senator Ben Cardin, who sponsored the bill, claimed it would be more far reaching.
"This bill is universal," the Democratic Senator from Maryland said.
"It's absolutely motivated by Sergei Magnitsky, but it's universal in its application."
The Russian Government is also universal in its objection to the bill, threatening retaliation if it becomes law.
Because the human rights legislation would be tied to a measure that would normalize trade relations with Russia and subsequently repeal the Jackson-Vanik Amendment, the Senate Foreign Relations Committee approved the provisions of the bill that would impose visa bans and freeze the assets of those responsible for ‘gross human rights violations’ in Russia.
But if the whole purpose of repealing the Jackson-Vanik Amendment is to potentially double US exports to Russia, then the Magnitsky Bill might just have the opposite effect---depending on the steps Russia takes in terms of “retaliation.”
Though Russian officials are certainly not innocent when it comes to committing human rights violations, especially in the Magnitsky case, the very measure could hurt American businesses at a time when the US economy needs all the business it can get. And Russia is well aware of this.