Remarks to Members of the American Chamber of Commerce in Russia

Philip H. Gordon
Assistant Secretary, Bureau of European and Eurasian Affairs
Moscow, Russia
February 17, 2012

Assistant Secretary Gordon: That’s a great plan Dave. Thanks for doing this Tatiana. It’s easily worth an hour of my time to spend with American businesses. One of the priorities of the President and the Secretary, especially recently, is supporting and promoting our business in Europe, and it’s useful for me to hear from you about what you’re doing, what the challenges are, and how we can help.

Just next week, as an example--you know, the Secretary launched an economic statecraft priority a couple of months ago with a speech in New York trying to underscore that promoting American business is a job of the state Department as well as the other agencies and has really been cracking the whip on us to see what we can do on that front--and next week she’s hosting a Global Business Conference in Washington where industry will be represented and have a chance to spend more than a full day with her, the National Security Advisor, and other top officials on the same question; What can we do to promote American investment abroad, foreign investment in the United States, jobs? So this is perfectly consistent with what we’re trying to do. Obviously Russia is one of the biggest and most important markets of all.

You asked to put it in the context of my trip. As always we have a huge bilateral agenda with Russia so there’s a lot of business to conduct. It’s also an effort by me to try to do some stock-taking of where we are in the overall relationship. The overall relationship, we think, three years into the Obama administration is much better than it was when we started, not least thanks to Mike and others who really focused on trying to turn it around. But at the same time, and I won’t bore you with the long list of things we think we’ve accomplished in the areas of proliferation, Afghanistan, and other big global and strategic issues, but at the same time it’s no secret that this recent period has been quite challenging on that global front. Maybe most spectacularly with the Russian veto of the Syria Resolution, but even on other fronts where we were making good progress but it seems to have stalled a little bit -- missile defense and some of the international questions we’re trying to deal with.

So I’m trying to get a sense of what’s going on, what the challenges are, what we can do to put things back on the positive track.

In a way I would say, it seems to me and I’ll be interested in your views, the economic side it’s still moving forward pretty decently. We’ve had a number of big deals involving American companies in Russia in the past couple of years. We’ve got the Visa Agreement done -- three year multiple entry. If we can get that ratified it’s going to be something that should help business on both sides. And then WTO -- no small thing. I think U.S. governments for 20 years have been trying to get this done, and the Russian governments too, with more or less enthusiasm, and we did. So that’s another thing that notwithstanding whatever differences there may be on the geopolitical front, that’s a huge deal that’s going to be mutually helpful.

You raised PNTR, and now as the President has said, the ball’s in our court, we’re ready to move ahead, the deal’s done, but we’re in this perverse situation now that if we don’t lift Jackson-Vanik then everybody benefits from Russia in the WTO except you all, and that’s not where we want to be. I think we can take a bit of time to talk about where that is.

We’re gearing up for an engagement with the Hill. The President’s been very clear Jackson-Vanik’s anachronistic. It should be lifted. It’s in our interest to do so. If logic prevailed this would be easy because where we are now, it’s clearly in our interest to do, but am I going to bet that logic will prevail in our political process, you just can’t be sure. It gets caught up, as you well know, not only in the human rights and democracy question but arguably it’s indirectly at the origin of Jackson-Vanik in the first place. But everything else. I’m not even convinced that something like Syria, which has nothing to do with Russia’s WTO accession, won’t lead some senators to say why should I do that? Why should we be giving them a hand? We constantly, again as Mike experienced, spend our time explaining this is not a gift to the Russians. We’re not doing this out of the kindness of our heart. We’re doing it out of mutual interests including our interests. So work to be done. We hope you all will be very much engaged in that work because that’s going to be what Members of Congress have to hear, that it’s in our business interest to move forward.

I don’t doubt that they will insist on some human rights dimension to the lifting of Jackson-Vanik, but we think we’re in a pretty good place in being able to say what we are doing, what we have done on that front, so that any Senator who wants to feel comfortable that we’re not sweeping democracy and human rights under the carpet can know that’s the case. We’ll see what they demand.

So that I think is front and center. There are other issues like the Bilateral Investment Treaty, Russia’s accession to the OECD, both of which we’d like to continue pursuing. But I think that WTO is probably the biggest of them all.

I’d just end by saying again, I really want to hear what you have to say. I know that doing business here presents its own challenges. I looked at the numbers before I got here on the ease of doing business in different countries, and I think Russia was around 120-something out of 180-some. As I said to some of your colleagues, I was in Ukraine last week and they’re 30 places below Russia so everything is relative, but still, I’m sure that poses a particular set of challenges for you. I’d be interested in hearing what those challenges are and what we can do to help.