Permanent Normal Trade Relations

Why Permanent Normal Trade Relations with Kazakhstan is in the U.S. National Interest

On June 22, 2015, the government of Kazakhstan celebrated the conclusion of negotiations to accede to the World Trade Organization (WTO) as the organization’s 162nd member. The energy-rich nation began accession talks nearly two decades earlier in 1996. In those negotiations, Kazakhstan committed to enact a host of reforms, and officials in Astana, the capital, completed this work and formally joined the WTO at its Ministerial Conference in December 2015.

To ensure that U.S. workers, farmers, ranchers, and companies benefit from the market-opening reforms Kazakhstan is undertaking as it joins the WTO, Congress must pass a short and simple bill that grants Kazakhstan Permanent Normal Trade Relations (PNTR) status and graduates the country from the Jackson-Vanik amendment’s requirements. Failure to do so will put U.S. goods and services at a unique disadvantage in the Kazakh marketplace and drive new sales, exports, and job-creation opportunities to our European and Asian competitors.

The USKZBA, U.S. Chamber of Commerce and the broader U.S. business and agriculture communities have long supported Kazakhstan’s WTO access. Today, we are urging Congress to grant Kazakhstan PNTR status so that American workers, farmers, and companies can share in the benefits of this historic step forward for Kazakhstan.

What is Permanent Normal Trade Relations?

Congress must approve PNTR and graduate Kazakhstan from the annual Jackson-Vanik certification process if American companies, workers, and farmers are to benefit from Kazakhstan’s new openness as it joins the WTO.

Under WTO rules, every WTO member must grant all other members unconditional Permanent Normal Trade Relations (also known as Most-Favored Nation status). This WTO rule mandates that any advantage granted to one WTO member by another member must be accorded unconditionally to all other members. The United States will be in clear violation of this rule if Congress fails to graduate Kazakhstan from Jackson-Vanik. Kazakhstan would thus be fully within its rights to withhold the benefits of its accession-related reforms from U.S. companies.

What is Jackson-Vanik?

The Jackson-Vanik amendment to the Trade Act of 1974 was devised to press the Soviet Union to allow the emigration of Soviet Jews, prisoners of conscience, and victims of religious persecution. With respect to Kazakhstan, Jackson-Vanik has fully accomplished its objective. With the collapse of the Soviet Union two decades ago, Kazakhstan established freedom of emigration for all citizens. For more than two decades, U.S. presidents of both parties have issued annual certifications of Kazakhstan’s full compliance with the Jackson-Vanik amendment.

Because no other WTO member has a law similar to Jackson-Vanik, all of Kazakhstan’s trading partners except the United States benefit from Kazakhstan’s WTO accession.  Failure to approve PNTR and graduate Kazakhstan from the Jackson-Vanik amendment’s requirements allows Kazakhstan to discriminate against U.S. companies and the workers they employ and deny them the full benefits of Kazakhstan’s market-opening reforms. Meanwhile, European and Asian companies are able to build on their already significant head start in tapping the growing Kazakh market.

Support USKZBA’s PNTR Initiative

The foreign policy goal of bringing Kazakhstan into the global rules-based trading system is finally within reach. The only question now is whether U.S. workers, farmers, ranchers, and companies will be able to secure the benefits of Kazakhstan’s accession to the WTO. The answer rests with Congress, which must approve PNTR and graduate Kazakhstan from the Jackson-Vanik certification process.

As an organization dedicated to representing the interests of U.S. businesses in Kazakhstan, USKZBA is working closely with a coalition of the U.S. Chamber of Commerce, the National Foreign Trade Council, the National Coalition Supporting Eurasian Jewry, the National Association of Manufacturers and the U.S. business community to support Congressional approval of PNTR for Kazakhstan.