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Russia: Bush, Putin Vow To Improve U.S.-Russian Business, Energy Ties

  • Jeffrey Donovan

In addition to an arms-control treaty, the U.S.-Russia summit in Moscow was marked by joint statements pledging greater business and energy links between the two countries, despite recent setbacks in the U.S. Congress on Russia's trade status. RFE/RL looks at the agreements, which a senior U.S. official says will help Russia become a "strategic energy source" for the world.

Moscow, 24 May 2002 (RFE/RL) -- An arms-control agreement highlighted the U.S.-Russia summit in Moscow today, but business and energy ties between the former foes also got a boost from U.S. President George W. Bush and Russian President Vladimir Putin.

Among several different agreements, Bush and Putin signed joint statements pledging to take significant steps toward improving their economic cooperation and trade and turning Russia into a "strategic supplier" of oil and natural gas to help secure unstable international energy markets.

In a joint address to the media following a Kremlin ceremony in which they signed the arms-control treaty, Bush expressed hope in the future of Russian-American economic ties and pointed to two Caspian-region energy pipelines as examples that should be followed.

"Russia and the United States are committed to economic cooperation. We have launched a major new energy partnership. Private firms will take the lead in developing and transforming the vast energy reserves of Russia and the Caspian world to markets, through multiple pipelines, such as the Caspian Pipeline Consortium and Baku-Ceyhan," Bush said.

The issue of world energy supplies has been viewed with greater concern in the U.S. since Islamic militants, most from leading oil supplier Saudi Arabia, attacked the country on 11 September. Analysts say it is in America's interest to increase the global supply of oil from more stable sources outside the Middle East.

The joint statement on "The New U.S.-Russia Energy Dialogue" pledges to improve bilateral relations -- as well as global energy security and supply -- through a series of broad cooperative steps.

These include enhancing private-sector projects in exploration, production, refining, transportation, and marketing of energy products. The statement also calls for modernizing Russia's port, transportation, power, and gas infrastructures to facilitate access to world markets of Russian oil and gas. It also pledges cooperation in developing "ecologically safe" nuclear-power technologies.

A senior U.S. official told reporters that Russia is destined to become a major world energy player and already supplies 40 percent of the world's natural gas. He said a major "energy summit" organized by the countries' Energy departments will be held this fall, bringing together government and business to promote cooperation.

He also said he can envision a time when oil from eastern Russia will be transported across the Pacific to Alaska. But he added that the "free market" must ultimately decide where and how to build new energy infrastructure.

Anders Aslund is a leading expert on post-Soviet economics at the Carnegie Endowment of International Peace in Washington. He said a key issue in helping get Russian oil to markets will be to open up the European market, which currently limits its oil supplies from any one source to 30 percent.

"The issue is to get it out, and it's more a matter of the [European Union] opening its markets more toward Russia, and the U.S. can, of course, play a major role here to facilitate closer oil production," Aslund said.

But not all is rosy in trade relations between Moscow and Washington. Speaking just two days after the U.S. Senate voted to retain Cold War-era restrictions on Russian trade, Bush vowed to work hard to break down any such lingering barriers.

"I am determined to work with Congress to remove Russia from the Jackson-Vanik amendment. It is time our Congress responded to my request -- President Putin's desire -- that the Jackson-Vanik amendment be removed pertaining to Russia," Bush said.

The Senate voted last Wednesday to retain the 1974 "Jackson-Vanik" amendment -- originally intended to penalize the Soviet Union in trade for restrictions on Jewish emigration -- largely because of lingering problems over American poultry imports to Russia. Russia banned those imports in March after the U.S. taxed steel imports.

Putin expressed hope that Jackson-Vanik will soon be shelved.

"We are aware of the position of the [U.S.] president and his administration as far as the Jackson-Vanik amendment is concerned. It was the [U.S.] administration's initiative to lift this amendment. We hope that our business communities, both Russian and American, as well as the cooperation on the parliamentary level, will be able to help solve problems of this nature almost as a matter of course," Putin said.

The senior U.S. official also said the U.S. Commerce Department will make a decision by 14 June on whether to grant Russia "market-economy" status. Analysts say it is likely to happen and will go a long way toward helping Russian imports to the U.S. by knocking down certain tariffs.

Aslund, echoing the U.S. official, told a public forum on the summit earlier this week in Washington that Moscow has made great strides in the last year in passing laws on judicial, economic, and land reform. Aslund said the Russian economy, contrary to popular belief, is making important strides.

"This is the perspective on Russia that we should have at the summit: a quickly growing economy that is coming together. And such an economy, of course, doesn't need aid, it needs trade," Aslund said.

And with a boost from Bush, Russia looks likely to get it.

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