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Russia: U.S. Chamber Of Commerce Chief Praises Economy

The president of the U.S. Chamber of Commerce, Thomas Donohue, has praised Russia's economic reforms and investment climate. Donohue, who recently spent three days touring Russia, said his organization will do its best to push hard for Russia's entry into the World Trade Organization.

Moscow, 25 April 2002 (RFE/RL) -- Thomas Donohue, the head of the U.S. Chamber of Commerce, has offered praise for the progress Russia has made toward creating a market economy. Donohue -- who spent three days in Russia sizing up the country's investment climate -- says the improvements have been significant.

"[First], you can see the emergence of a vibrant entrepreneurial business sector. I was here three years ago, and the improvements that I'm talking about are real and substantial.... [Second,] I've heard a number of positive reports from major American companies doing business here. Yes, there are roadblocks and there are frustrations, but on the whole the business community is optimistic about the long term."

Donohue says there has been "a fundamental and positive" shift in relations between the two countries since the terror attacks on 11 September and Russia's support for the U.S.-led war against terrorism. He says this improvement in relations -- combined with the fast growth of the Russian economy and the implementation of economic reforms -- presents a significant opportunity for expanding trade and investment.

But he cites two areas where he says improvement is needed. Donohue says, first of all, that the U.S. Congress should officially designate Russia as a "market economy" and get rid of the Jackson-Vanik amendment -- a Cold War-era law that links Russia's trade privileges to its policies on Jewish emigration. And he says Russia should get rid of lingering barriers to investment.

"First, the United States must get rid of Jackson-Vanik legislation and designate Russia as a market economy for trade purposes. These are vestiges of the past, and the Chamber of Commerce of the United States will press hard for immediate action on these issues. Now, what should Russia do? First, stay the course on economic reform. Russia must remove restrictions on investments and ensure protection of intellectual propriety rights. Russia must ensure that the court decisions are enforced and make sure economic reform moves to the states and to the bureaucracies. The next question is, 'What should Russia and the United States do together?' The first is to recognize that it is in both of our interests to have Russia join the [World Trade Organization] and for us to work together to make this happen as soon as possible."

Donohue says access to the World Trade Organization (WTO) is important for Russia -- and for the U.S. First, he says it will help Russia complete its transformation to a market economy. Secondly, he says, it will force Russia to become part of what he called a "rules-based system."

Donohue says in order to join the WTO, Russia has to negotiate separate trade agreements with all 144 WTO countries. Russia has already succeeded in negotiating agreements with more than half of the members, but it still has to reach individual deals with the U.S., the European Union, China, Japan, and others.

Donohue says the U.S. Chamber of Commerce, which represents 3 million companies and organizations, will campaign intensively for Russia, as it did for China. "We pushed hard during the Chinese acceptance to [the] WTO to complete negotiations with the Chinese and then to have our Congress approve it. We will help the Russians negotiate their agreement with the United States, and assuming that it is successfully concluded, we will press hard to have it confirmed in the United States in a very short time."

Donohue tried to minimize recent trade disputes between Russia and the U.S. on steel and poultry. The U.S. recently announced it would impose tariffs of up to 30 percent on steel imports from many countries, including Russia.

For its part, Russia recently imposed a partial ban on imports of U.S. chicken products, citing concerns about sanitary conditions in U.S. poultry plants and America's use of antibiotics and feed additives. It later announced it would relax the ban.

Donohue says neither issue should obscure the bigger picture of improving conditions: "The question is about poultry and steel. First of all on the steel problem, the United States, as many people know, has put some quotas and restrictions on the import of steel. It is a political decision. It is the wrong decision, in my opinion. And it will continue to change on a week-by-week basis. I think that the concerns of the Russian government and its companies will be dealt with in the near time. And my own prediction is that for the most part, those restrictions won't be in place for very long. On the poultry issue, I'm pleased that there seems to be a settlement of that matter."

Now, Donohue says, the two countries should work together to eliminate barriers to capital investments, to ensure legal protection for companies and products, and to work on intellectual property problems.