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Russia: One of America's Strongest Allies? - 2001-10-17

Ever since the terrorist attacks last month in the United States, Russian President Vladimir Putin has become one of America's strongest allies in its fight against terrorism. And Washington has let it be known how much it welcomes Moscow's support.

Earlier this week, U.S. Commerce Secretary Donald Evans began a visit to Russia, bringing with him several executives from such major U.S. companies as Boeing.

To many observers in Russia, a country where there has been almost no foreign investment since the economic crisis of 1998, the high-profile visit is not coincidental. They believe it is a direct result of President Putin's strong support for the United States in its war against terrorism.

The Russian president was one of the first world leaders to offer condolences to President Bush after last month's terrorist attacks in the United States. He later solidified that support in a televised address to the Russian people in which he outlined the steps Russia is willing to take in order to support the United States.

Those steps include allowing U.S. forces to use bases in the former Soviet republics of Central Asia as a launching pad for attacks against the Taleban in Afghanistan.

On Wednesday, at the end of his visit to Russia, the U.S. commerce secretary gave perhaps the strongest indication yet of the changed relationship between Russia and the United States. Mr. Evans announced that the United States would "aggressively" support Russia's application to join the World Trade Organization.

While Mr. Evans did not explicitly link U.S. support for Russia's entry into the trade organization with Russian support in the fight against terrorism, he did say that this is an important time in the relationship between the two countries, a time, he said, when all civilized nations are uniting.

Peter Boone is the director of research at the Moscow office of the investment bank Brunswick/UBS Warburg. He acknowledges that the United States does not have absolute control over who gets into the World Trade Organization, but he says it does hold considerable influence in the organization, influence it now appears ready to use in Russia's favor.

"Russia wants to speed up the WTO negotiations. Up until now that has not really been a priority for the U.S., but after Putin's conversations with Bush there have been some signs that the U.S. is going to speed up quite a bit so that Russia could join the WTO sooner," he says.

Membership in the economic organization would benefit Russia in various ways. Right now, for example, the United States places restrictions on imports of Russian steel because it says Russian producers are selling their products at less than what it costs to produce it, a process called dumping. Russian producers say this is not true and call the restrictions unfair. While membership in the WTO would not solve these issues, it would give Russia an important forum to discuss them and more leverage with which to bargain.

Membership in the WTO would also be a sign to foreign businesses that Russia is a stable place. Many foreigners stopped investing in Russia after its economic crisis in August of 1998, when the government defaulted on loans and devalued its currency.

But Russia's list of what it would like from the United States extends beyond entry into the World Trade Organization.

Michael McFaul is a professor of political science at Stanford University in California. He says Russia wants the United States to change a U.S. law that dates back to the Soviet era, a law that focussed on the Soviet treatment of Jews.

"First and foremost would be a change in the 1974 trade act which was amended with the so-called Jackson-Vanik amendment that basically links Russia's most favored nation status to the levels of Jewish emigration out of Russia," he says. "The Russians see this as a legacy of the Soviet Union."

Analysts in Russia say the U.S. administration could also help by promoting Russia as a good place to invest. Vladimir Tikhomirov is the senior economist at the Russian investment bank, Nikoil, which is affiliated with Russia's largest oil company, Lukoil. "What Russia would like is to see more support from U.S. administration in promoting, or in putting forward Russia as one of good places to invest for U.S. business interest," Mr. Tikhomirov says.

U.S. Commerce Secretary Evans also did what he could in this area. In his departing comments to reporters, he praised the Putin government's economic reforms of the past 18 months and predicted that Russia would, within a year, gain official status as a country with a market economy, a status that would dramatically enhance its appeal to foreign investors.

But as far as U.S. officials are concerned, Russia has already come a long way.