581 



New legislation would be required to extend MFN treatment to the 

 Soviet Union. Such legislation is certain to run into strong congres- 

 sional opposition. Many congressmen have opposed trade concessions 

 to the Soviet Union because of repressive Soviet domestic policies. 

 Soviet policy of restricting emigration of Soviet citizens has become 

 the focal point of recent efforts to block MFN status for the Soviet 

 Union. The proposed "Jackson Amendment." endorsed by a majorit}' 

 of the members of the Senate, ties trade concessions to Soviet domestic 

 policies : 



... no nonmarket economy country shall be eligible to receive most-favored- 

 nation treatment or to participate in any program of the Government of the 

 United States which extends credits or credit guarantees or investment guaran- 

 tees, directly or indirectly, during the period beginning with the date on which 

 the President of the United States determines that such country — 



(1) denies its citizens the right or opportunity to emigrate; or 



(2) imposes more than a nominal tax on emigration or on the visas or 

 other documents required for emigration, for any purpose or cause whatso- 

 ever ; or 



(3) imposes more than a nominal tax, levy, fine, fee, or other charge on 

 any citizen as a consequence of the desire of such citizen to emigrate to the 

 country of his choice. . . . 91 



The issues of tariff discrimination and most-favored-nation treat- 

 ment were among those discussed at the 1972 U.S. -Soviet trade 

 negotiations. Tariff negotiations between the United States and 

 Communist countries tend to be more complex than others because of 

 the differences in the conduct of foreign trade in the two economic 

 systems. 



Since 1923, U.S. policy has been to extend MFN treatment to its 

 trade partners automatically and unconditionally. Such treatment as- 

 sures equal access to the domestic market for all trade partners. Gen- 

 erally, the United States expects only equivalent treatment, assuring 

 non-discrimination against U.S. exports. The Soviet Union also ac- 

 cords its trade partners MFN treatment. However, under the Soviet 

 system of state-directed foreign trade, a grant of MFN tariff treatment 

 does not guarantee access to its domestic market. Soviet enterprises 

 do not purchase freely abroad according to their production needs 

 and cost limitations. Imports are planned by government agencies and 

 are purchased by government-controlled foreign trade enterprises. 

 Thus, Avhen the Soviet Union reduces its tariffs on U.S. exports, pur- 

 chases of American goods do not automatically increase. 



Consequently, in trade negotiations with the U.S.S.R. the United 

 States has traditionally taken the position that MFN status is a nego-. 

 tiable trade concession which requires some special form of reciproca- 

 tion from the Soviet Union. Soviet leaders, however, regard MFN 

 status as a symbol of good will and friendship; they believe that the 

 Soviet Union is entitled to the same treatment as other U.S. trade 

 partners. For this reason, they have taken the position in trade nego- 

 tiations that MFN status is not a matter for quid pro quo bargaining, 

 but a natural concomitant to improved diplomatic relations. 



As part of the comprehensive trade agreement between the two coun- 

 tries, concluded on October 18, 1972, the President agreed to submit 



81 Amendment Xo. 1691 to S. 2620, 92d Cong., 2d sess., Oct. 4, 1972. 260 members of the 

 House of Representatives cosponsored similar legislation (the "Mllls-Vanlk Amendment") 

 In the first session of the 93rd Congress (H.R. 3910). 



