Kazakhstan undertaking initiatives to remove trade limitations enforced during the Cold War era
The Jackson-Vanik Amendment, a relic of the Cold War era, continues to hinder the growth of mutually beneficial trade and investment between the Biden Administration and Kazakhstan. This outdated measure, adopted in 1974 to address geopolitical concerns by conditioning trade relations on the right to freedom of movement and emigration, remains a challenge for Kazakhstan's quest for closer economic ties with the U.S.
Kazakhstan shows interest in the B5+1 process, a U.S.-led initiative aimed at reducing trade barriers and attracting more Western investment. However, Kazakh officials voiced concerns about the impact of their Jackson-Vanik status on trade with the United States. This status requires yearly reviews for exemptions, a process that Kazakh diplomats in Washington are working diligently to change.
The CRS (Congressional Research Service) published a report in August stating that the repeal of Jackson-Vanik for Kazakhstan could have a significant positive impact on overall bilateral relations. The Biden Administration supports the move, arguing that it would signal a commitment to economic engagement at a time when the U.S. is seeking to help Kazakhstan diversify economically, reducing reliance on Russia and China.
At a summer investment forum in Washington, Kazakhstan's ambassador to the U.S., Yerzhan Ashikbayev, characterized Astana's removal from the Jackson-Vanik list as "low-hanging fruit." Despite this, multiple bills introduced in past years to address this issue have failed to progress beyond committee reviews. A similar bill, H.R. 3611, currently has 43 co-sponsors, but its fate remains uncertain.
Daniel Witt, president of the International Tax and Investment Center, believes that denying Kazakhstan permanent normal trade relations (PNTR) status is detrimental to U.S. strategic interests in Central Asia. He stated in July that lifting various restrictions, including the Jackson-Vanik amendment, would greatly improve the investment climate in Kazakhstan.
The Jackson-Vanik Amendment requires Kazakhstan to seek an annual waiver to maintain normal trade relations with the U.S. Eliminating this requirement would help stabilize economic ties and promote trade and investment between the two countries. Removing or waiving the Jackson-Vanik impediment for Kazakhstan would require the U.S. Congress to pass legislation granting Kazakhstan a permanent waiver or repealing the amendment as it pertains to Kazakhstan. This process typically involves introducing a bill, committee review, a congressional vote, and presidential signature. If there is no specific bill currently in Congress, efforts to address the Jackson-Vanik amendment for Kazakhstan would likely involve similar legislative steps through future bills.
- The B5+1 process, led by the United States, faces potential hindrances as Kazakh officials voice concerns about the impact of their Jackson-Vanik status on trade with the U.S.
- In the realm of policy-and-legislation, the Biden Administration supports the repeal of the Jackson-Vanik Amendment for Kazakhstan, arguing that it would positively impact bilateral relations and signal a commitment to economic engagement.
