U.S.-Russia Economic Cooperation

The United States is working to expand bilateral investment and economic cooperation that can benefit both Americans and Russians. Over the period from 2004 to 2011, U.S. exports to Russia rose an average of 16 percent per year; in 2011 U.S. exports to Russia rose by 40 percent. U.S. companies reported numerous major business deals in Russia, including Boeing’s sale of 50 aircraft to Aeroflot and 40 planes to Russian airline UTAir, a joint venture between Exxon-Mobil and Rosneft to explore for oil and gas in the Arctic, and GE’s joint ventures with Russian partners Rostekhnologii and InterRAO.

In December 2011, after 18 years of effort, Russia was invited to join the World Trade Organization (WTO). This major accomplishment will bring the largest economy outside the WTO into the organization, bind it to a set of rules governing trade, and allow enforcement of these rules through a dispute-resolution mechanism. As President Obama has said, Russia’s accession to the WTO “can open up trade and commerce between our two countries that can create jobs and economic growth for both Russians and Americans.” To ensure that U.S. companies and workers can take full advantage of Russia’s WTO membership, the Obama Administration is dedicated to working with the Congress to enact legislation to terminate the application of the Jackson-Vanik Amendment and authorize the President to extend permanent normal trade relations (PNTR) to Russia.

Our governments are also engaged in a wide range of joint efforts under the Bilateral Presidential Commission in the areas of trade, investment, multilateral economic cooperation, commercial engagement, anticorruption, institutional transparency, and innovation that will benefit the people of both countries.

Russia’s WTO Accession:

• The United States welcomes the successful completion of Russia’s WTO accession negotiations. Russia’s membership in the WTO, expected by late summer 2012, will offer significant opportunities to the United States and Russia.
• Russia’s implementation of established, enforceable, multilateral trade rules can help further expand U.S.-Russia trade. In addition to strengthening both our economies, a stronger U.S.-Russia trade relationship can help improve cooperation on political and security issues.
• In order for U.S. businesses and workers to benefit fully from the trade-liberalizing commitments Russia has made as part of its WTO accession, the U.S. Congress must enact legislation ending application of the Jackson-Vanik Amendment to Russia. President Obama reiterated to President Putin his commitment to working with Congress to terminate the application of the Jackson-Vanik Amendment and to authorize the extension of PNTR to Russia. This step will ensure that America’s manufacturers, farmers, and other exporters are not placed at a disadvantage relative to their foreign competitors in Russia’s growing market.

Russia’s OECD Accession:

• The United States welcomes Russia’s efforts to accede to the Organization for Economic Cooperation and Development (OECD). In April, Russia became a Party to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; and in May, Russia accepted the Nuclear Energy Agency’s offer to join. Many important steps remain for Russia to qualify for full OECD membership, and the United States supports Russia’s efforts to advance this process and assume OECD obligations. The United States has shared experience with Russia in areas such as legislative frameworks on foreign bribery and government-business engagement to combat bribery.
• Russia’s OECD membership would represent another major step in Russia’s broader integration into international institutions. The accession process can help modernize and diversify Russia’s economy, as well as improve its business and investment climate. The OECD accession process, including peer-review mechanisms, can help in solidifying progress in these priority areas, as well as identifying areas where the OECD’s codes of liberalization and Members’ experience may be useful.

Russia as 2012 Host of the Asia-Pacific Economic Cooperation (APEC) Forum:

• The United States is committed to cooperating further in support of Russia’s agenda during its APEC chairmanship in 2012.
• Russia has set four priorities for its host year: expanding trade and investment liberalization and facilitating regional economic integration, strengthening food security, establishing reliable supply chains, and fostering innovative growth – all major priorities of the United States as well.
• U.S. and Russian officials are working together to advance specific initiatives of interest to both economies, including those related to liberalizing trade in environmental goods; promoting effective, non-discriminatory, and market-driven innovation policy; improving supply-chain performance across the region; combating corruption and illicit trade; and enhancing the role of women in the economy.
• As Chair and Vice-Chair of the APEC Anti-Corruption and Transparency Working Group for 2012, Russia and the United States are working together to implement an ambitious work plan that includes implementation of APEC principles on financial disclosures for officials and launching an APEC partnership with the private sector to combat corruption and illicit trade.

Bilateral Investment Treaty:

• The level of investment between the United States and Russia remains below its potential, and the United States supports exploratory technical discussions on a Bilateral Investment Treaty that could provide additional protections to investors in both countries. In April 2012, the United States released a revised model treaty text as the basis for negotiations. Recognizing that international investment is a significant driver of economic growth, job creation, and exports, the United States seeks to pursue technical discussions of a high-standard Bilateral Investment Treaty with Russia to encourage a level investment playing field in Russia with fundamental legal guarantees, including strengthened labor and environmental protections. The U.S. model Bilateral Investment Treaty is designed to facilitate good governance, the rule of law, and transparency.

Intellectual Property Rights:

• The United States is committed to strong enforcement and protection of intellectual property rights (IPR). Both the United States and Russia recognize that IPR is vital to promoting innovation and creativity, attracting high-technology investment, and fostering the jobs necessary for long-term economic growth. As soon as Russia is a WTO Member, it will be required to comply with all of the obligations of the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement, which establishes minimum standards for IPR protection and enforcement.
• The United States recognizes recent positive steps that Russia has taken to address significant losses by U.S. companies due to IPR infringement, including enactment of a law to establish a specialized IPR court by February 2013, and amendments to its criminal code that revise criminal thresholds for copyright piracy. Russian authorities have also taken criminal and civil action against serious copyright infringers. The United States looks forward to working with Russian authorities to address remaining concerns with regard to piracy over the Internet and enforcement in general.
• The United States looks forward to continuing its cooperation with Russia to support vigorous and sustained IPR protection and enforcement. This cooperation will include activities to promote IPR awareness and high standards of IPR protection and enforcement, as well as cooperation on international law-enforcement investigations. The U.S. and Russian governments also seek to enhance their relationship on IPR issues through exchanges of expertise and best practices in the area of IPR protection and enforcement.

Innovation:

• In 2011, the United States and Russia launched a Working Group on Innovation under the Bilateral Presidential Commission. The group met for the first time on March 27 in Silicon Valley. At that meeting, the two sides signed a Memorandum of Understanding regarding their future work, including cooperation on projects with Russia’s Skolkovo Innovation Center.
• To support our common desire to enhance the role of innovative entrepreneurship in both economies, this new dialogue seeks to broaden and deepen U.S.-Russia engagement on innovation in government-to-government channels as well as in collaboration with the private sector. In that vein, the Innovation Working Group includes leading innovative corporations, business associations, universities, and nongovernmental organizations.
• The Working Group intends to focus its efforts on three primary fields of activity: (1) identifying best practices for encouraging entrepreneurship and innovation, including in the areas of intellectual property rights protection, taxation, corporate governance, and technology licensing; (2) identifying policies and practices that support the development of successful innovation centers and regional innovation clusters; and (3) engaging in exchanges and policy support in the development of a commercialization chain linking innovators with the market. The Innovation Working Group will coordinate with the other working groups on issues involving improving the business environment, including bolstering transparency and business ethics.

Visas:

• The United States looks forward to seeing the U.S.-Russia visa liberalization agreement enter into force following ratification by the Russian parliament. The agreement will provide for multiple-entry visas with extended validity of 36 months for business and tourist travelers as a matter of standard practice. This agreement will foster commerce between our businesses and expand ties between the American and Russian people.

Other Fora:

• The United States engages Russia on foreign bribery and corruption-related market issues in other shared fora, such as the G8, UN Convention against Corruption, and the Council of Europe Group of States Against Corruption, and looks forward to advancing these issues jointly in the G20 Anti-Corruption Working Group under Russia’s G20 presidency.