Business Person On April 1st 2009, U.S. President Barack Obama met with Russian President Dmitri Medvedev for the first time. Obama and Medvedev, who both hold law degrees, represent a new generation of post Cold War leaders. Finally, relations between Russia and the United States are warming up, to the benefit of both countries. Russia's economy has really begun to take off in the last few years as the country has begun to more fully take advantage of their many natural resources. Additionally, Russia is also beginning to diversify their exports to include much more than just oil and gas. American investors in the private sector have helped Russian businesses grow and develop new expertise. Also, Russian businesses are increasingly investing in the American market. This successful bilateral economic relationship is benefiting both countries, and political experts in both countries are hoping that this new economic relationship will help the history of political frigitiy between the U.S. and Russia melt away.

Key to this successful economic relationship is Russia's entry into the World Trade Organization. Russia has been negotiating its terms of accession to the WTO since 1993. Russia's entry into the WTO in November of 2006 is the single largest achievement in the economic relationship between the U.S. and Russia in more than a decade. Finally, issues about agriculture, healthcare, intellectual property rights protection and tariff percentages were successfully negotiated. After these negotiations were solidified, trade between Russia and the U.S. began to increase almost immediately. Since 2006, American investments in Russian businesses have risen by almost 50%. Major American investments include International Paper in Svetegorsk, Alcoa in Samara, Coca Cola in Krasnoyarsk, and General Motors in St. Petersburg. Proctor and Gamble, Intel, and Boeing also have large business centers in Russia.

Russian Economic Forum However, even though Russia has been accepted into the WTO, the country’s legislature must still approve several pieces of legislation in order to become WTO compliant. The biggest thing that is being negotiated about Russia's accession to the WTO is the fact that they do not yet have adequate protection for intellectual property rights. As a result, it is common for confidential information about medicines that have not been patented yet to be leaked. This has a very negative effect on U.S. companies who spend thousands to millions of dollars developing a drug that then do not recevie the patent rights to. In order to really strengthen their economy, Russia needs to diversify its economy and grow more in areas that are related to innovation and technology. But until their own laws support and defend intellectual property, this will not be able to happen. U.S. Trade Representative Susan C. Schwab explains that Russia is already an important importer of American agricultural goods, manufactured products, and many other services, and when Russia’s is fully compliant, their market will open even more, and their worldwide importance will only grow.

Recently, the U.S.-Russia Business Council published a set of recommendations for the Obama Administration as to the best practices for relations between Russia and the U.S. The USRBC is a non-profit association that has over 250 member companies from both the United States and Russia. The group is focused on commercial relations between these two nations. Their recommendations highly encourages the Obama Administration to advocate the repeal of the Jackson-Vanik Amendment when Russia finally becomes totally compliant with all WTO regulations, including those about intellectual property. The Jackson-Vanik Amendment was passed in 1974, and denies certain trade rights to countries such as Russia who have non-market economies and who restrict emigration rights. These trade rights primarily include lower tariffs. Repealing this act would be a significant gesture to Russia of the U.S.'s desire to have better trade relations, and it would disarm Russian critics who say that the United States does not reward Russia when they do adhere to international policies.

The USRBC highly encourages the Obama Administration to do everything they can to help “press the reset button” on relationships between Russia and the U.S. While the amount of bilateral trade occuring between these countries has risen greatly in the last few years, the total figures are still relatively small. Both U.S. and Russian companies are eager to increase levels of trade, but there are still many political roadblocks that need to be resolved for this to happen. So with Russia's emergence as a major market player on the world stage, it is imperative that the U.S. begin now to begin to cultivate and strengthen our relationship with Russia. This can happen by the Obama Administration focusing on issues that can advance both countries' interests. With America supporting Russia's economic diversification, strengthened rule of law, and even-handedness in regulation, we can increase bilateral trade that will ultimately benefit both the countries.