Despite the collapse of the Soviet Union three decades ago, the amendment continues to be applied to Central Asian countries such as Kazakhstan. Congress seems to be in no hurry to bury this legislative fossil, although legislation to fix the situation, the Kazakhstan Permanent Normal Trade Relations Act, has been introduced.
The application of U.S. sanctions must be transparent and consistent. Since the U.S. recognized Kazakhstan as a market economy in 2002 and there is free emigration from the former Soviet Union, penalties should have been lifted from complying countries years ago. Repealing Jackson‐Vanik would be low‐hanging fruit, and it could trigger billions of dollars in trade and investment.
Central Asia’s location in the heart of Eurasia, bordering Russia and China and with Iran and Afghanistan farther south of the relatively secular region, makes it one of the world’s most sensitive markets, where Russian, Chinese, European, Indian, Middle Eastern and American capital and goods swirl in competition.
This could easily be a disastrous situation for the host country. Kazakhstan, however, has turned it into a benefit, balancing it with Europe, the U.S., Russia and China. This multi‐vector policy was designed by President Kassym‐Jomart Tokayev when he served as foreign minister in the 1990s.
Kazakhstan’s emphasis on creating a favorable environment for foreign investors and local entrepreneurs has paid dividends. It is wealthier than its neighbors and is tied with Italy (a G7 country) in economic freedom scores. Mr. Tokayev’s initiatives to establish a national privatization office, an anti‐monopoly and competition protection agency, and a national credit rating agency are only a few recent examples. Concurrently, following the idea that “a computer will never ask for a bribe,” Kazakhstan emulates Estonia’s digitalization model by leaning heavily into e‑government initiatives.
As Central Asia’s largest oil and natural gas producer, Kazakhstan helps diversify energy supplies for both the U.S. and Europe. Kazakh uranium could even provide a reliable alternative amid disruptions in the global uranium market.
China has also recognized Kazakhstan’s growing importance and economic movement westward. It is no coincidence that China launched its Belt and Road Initiative in Kazakhstan in 2013, and it was relaunched there last year.
Chinese investment in Kazakhstan has long targeted sectors of the Kazakh economy, such as nuclear energy, which American corporations would love to invest in but need more U.S. government guarantees and credit. Chinese investment has flooded the country, and in doing so, China has introduced its own regulatory and trade principles, including restrictive trade covenants.
Ms. Tai’s visit came at a time when America’s protectionist turn risks exporting bad industrial policies and undermining its ability to compete economically with China in the Global South. Through continuous engagement in Central Asia, the U.S. is defending its national interests in the cradle of the Belt and Road Initiative.
In doing so, the United States has been wooing Kazakhstan. At the U.S.-Central Asia Trade Investment Framework Agreement meeting in March 2023, the U.S. and the five Central Asian states worked out a system for refining the Generalized System of Preferences for Kazakhstan, Kyrgyzstan and Uzbekistan. The preferences system grants favorable trade concessions to geopolitically vital smuggling partners to facilitate American interests.
This past March, Murat Nurtleu, Kazakhstan’s deputy prime minister and minister of foreign affairs, visited the U.S. and met with Ms. Tai. They prioritized trade relations and food security over more intractable issues such as U.S. sanctions on Russia.
Mr. Nurtleu also discussed critical minerals, energy and the global methane pledge with Secretary of State Antony Blinken. The visit also included interaction with Wabtec, a U.S. corporation that acquired a General Electric subsidiary manufacturing locomotives and subsequently announced a $1 billion investment in the Kazakh transportation and logistics industry in 2023.
Ms. Tai’s recent visit was an important step in American presence, competitiveness and investment in Central Asia. Congress would do well to support this commendable outreach and American vital business interests by finally repealing Jackson‐Vanik.
