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russia is becoming a new front line in the fight for fairness a growing number of people are getting a global audience results and they expose prime the option and. those headlines next it's r t's interview show spotlight political cooperation between washington and moscow has improved but business relations remain cool off talks with the head of the u.s. russia business is council to find out why. every month we give you the future we help you understand how and what tomorrow brings the best in science and technology from across russia and around the world. join us for technology update on our g.

hello again they're welcome to spotlight the interview show on our t.v. i'm al green olives and today my guest in the studio is ed very round. the united states and russia have done quite a lot over the last couple of years to improve relations when it comes to business cop ration between moscow and washington they still seem to be more words than action what's the problem with the president and c.e.o. of the u.s. russia business. despite being two great powers russia and u.s. still appear to have problems turning into great business partners american made goods only account for four percent of russian imports and russian products make up just one percent of imports to the united states to break the trend who is searching for the new ways to attract investment and has held

a special for. now has a great investment opportunity it's some bushes projects for the olympic city of sochi and skolkovo the russian silicon valley welcome foreign capital and their own are the president and c.e.o. of the u.s. russian business council knows the problems from the inside. mr grown up welcome to the show thank you very much. for being with us well first of all is the a u.s. russia business council satisfied with the results of the saatchi forum i mean in practical terms of a contract signed the deals that were cut so on practically i am glad you had well i'm very happy particularly because one of our member companies boeing. signed a major deal for fifty seven wasn't a major deal that was that was a bar. of happy bob you know it was the council will

account for roughly three point seven billion dollars worth of sales over over the next decade so we consider that a major success otherwise i think some of the things that were said in the various plenary sessions and the. side sessions that i attended were very encouraging. prime minister putin. stated that he would work toward easing of work permits and establish a thirteen percent income tax rate for foreigners working in the country that's a step forward that measures of now been taken to streamline the customs process and bill has been introduced in the duma to to codify the changes that are occurring in in the customs system that's a major has been a major concern of american investors so we're very encouraged by that well the

investment climate panel if i'm not mistaken was attended by prime minister putin yeah well it was said this but dissipation especially convincing for the u.s. business leaders. i think. well one can say on the positive side. he the prime minister. made a. very sincere effort to try to engage with with foreign business people to. listen to their concerns he did acknowledge that there are problems i think that's important first step to solving problems is to acknowledge them i would say my own opinion is that that the tone has changed markedly from from say two or three years ago and i refer specifically to. putin himself and this is a reflection maybe of the different economic. situation that we're

in you you mentioned the problems mentioned above problems to putin. can you can you name the main problems he was he was talking about well i don't know that he went into detail but i'd be happy to provide you with a you know i hate to start out by citing what the problem is i rather begin by saying where we see the opportunities and our membership is. very. keen on. the russian market we have two hundred and forty members almost that are the belong to the council precisely because they see what it is that makes russia a very interesting place to invest whether their natural resources companies are looking at that russia is. unique in downman of minerals of oil and gas timber or whether there are companies in the fast moving consumer goods durable goods area that see a growing middle class with a very strong preference for western goods and services and american companies have

strong brand image or companies that look to russia as a source of engineering and research talent. for those reasons and for others our companies are are very optimistic in the long run one of the drawbacks that the head russians and the russian politicians have been talking about lately is that experts believe that this guy. trade is receiving ten times less foreign investment than it potentially could some of the reasons are explained by spotlights you learn that. the recent international investment for him and sochi resulted in record breaking term billion dollars worth of deals oh i should bulk of the money will flow into sochi itself after the russian city won the bid to host the two thousand and fourteen olympics it's turned into the world's biggest

construction site but the example of sochi is more of an exception the regions which manage to attract foreign investment are still few the great potential of the russian market is often overshadowed by the fear of risks that i see is going to make about the russian economy still not spoiled by the attention of investors neither foreign nor local ones of the russian business climate is claimed to have problems with and sometimes these claims are justified sometimes not we know our problems really well and we will solve them fighting the red tape introducing tax breaks for foreign companies and easing visa restrictions for foreign workers are key to attracting foreign capital all of this is already implemented in the dozen russian regions which receive the status of special economic zones but that seems not to be enough as the international financial corp place to worship at the bottom of its list of investor friendly countries meanwhile russia badly needs foreign investment to develop its high tech industry currently russia's high tech experts

and was only two or three billion u.s. dollars in comparison india's experts oh worth fifty billion in china five hundred billion u.s. dollars. so the c.e.o. . and the heads of a number of great u.s. corporations including well morgan stanley and bank bellowing in j.p. morgan chase and company so what. to put this in in this forum yes well did you manage to talk to the c. has such a forum and what what's their general impression well i can't i did not speak with the people that you mentioned but i can say that from my daily dealings with our member companies and with many of our c.e.o.'s convinces me that they see opportunities. and frankly those that belong to our council those who participate

in the form you could say are sort of a self selected group there are those who see the opportunities here and and have made some commitment to it. there are there are others that remain interested but on the sidelines. why. one of their concerns. i could start by saying that. russia is. fighting against a tremendous comparative advantage which is its natural resource and down. companies that have historically had the greatest interest in investing here were in the oil and gas sector minerals. and it's hard to fight against what is such a strong compelling reason for investment to try to diversify the economy. and almost paradoxically many of our member companies say that the heavy dependence

of russia on a handful of primary commodity exports is a cause of concern to them and it results in a high degree of volatility in the economy. and one might say what some of referred to is the dutch curse. having too much dependency on those sources natural resources for government revenues foreign exchange earnings tends to crowd out other sectors well oh better introduce do would reset into russia american relations well i do really see any real reset in politics maybe there is reset in our economic cooperation can you see any real reset in the relationship oh yeah well it kind of relation. well first the reset it was a good one well it's not so hard it is hard because the reset was announced as we

were beginning just beginning to come out of the worst recession we've seen since the one nine hundred thirty s. . so how do you disagree gape the economic trends that we're seeing after the advent of this new relationship from what's happening in the broader global economy it's really hard to say. have i seen a change. an attitude absolutely. and i think most business men believe that the given the nature of. the challenges they face in the russian economy government involvement. host government and home country government involvement is very important and now with this new commission the joint presidential commission that was established a little more than a year ago when president obama came to moscow we have a channel of communication and a means of addressing. the problems that may come up and the more systemic or

institutional conditions that pose obstacles to foreign investment i would say that in itself is very important we've seen a number of other agreements or ammo you signed just last june when president medvedev came to washington. several companies have announced important deals in russia since the reset was announced and now was that because the relationship has changed in some manner or was it because the world economy is beginning to turn around. hard to say i think it's a little bit of both so if you if you say that at the attitude it has changed which is very important then well then if we talk about reset in business relations between moscow washington it's rather yes than that i think so i think it i think we can see that the reset is real says ed rona president and c.e.o. of the u.s. russia business council spotlight will be back shortly right after a break we'll continue this interview in less than

a minute santa doesn't always stay with us. when the news is not enough. we need something really crucial. when you want to get down to brass tacks and special coverage. for. discussion on expert opinions on the person issues of the region. interests. question more.

play. live. welcome back to spotlight oh now we're not i'm just a reminder that my guest in the studio today is advair rona president and c.e.o. of the u.s. russia business council we started by talking about the economic forum in sochi that that took place in russia recently and now moving to to russia u.s. relations in general we don't do a reset you said that reset rather yes that now it is happening in business relations but russians one of the favorite subjects of the russians and i guess for business talks is the jackson the vatican you know that this is like a favorite subject is it sort of a sign is it

a symbol like that america's like to keep up the cold war of like being tough do we really need to remove it and if yes why don't we you i mean. you read ministrations since clinton three successive administrations united states have said that if they want to get rid of jackson banneker at least. eliminate its applicability to russia who is not being in business no. slots say there are some interests that may have a reason to want to keep jaxon van eyck as a form of leverage. and there's a little political that business will relate to business aims. and there are also those who feel that. russia shouldn't be rewarded. if that's the right way of conceptualizing it when it hasn't

lived up to some of its other commitments under the helsinki accords. no one today believes that there is any problem with emigration from russia and and the very the the literal wording of the jackson van ic amendment refers to movement free movement of peoples out of the country if that condition no longer applies in fact russia has a visa free travel regime with israel why keep it. practically speaking as it have an effect it's been waived every year since if i recall correctly nine hundred ninety two. it's market provisions there's another put component of that law which refers to having a market based economy that has been permanently waived so all that's left is to is to sweep away this remaining language about movement of people. and.

i can only attribute it to this point to a lack of political will. if he doesn't have a. battle hillary. may be a little bit of both. despite the reset despite the reset but what what practical effect would it have immediately not much we waive it every year would it alter our trade patterns within a year year and a half probably not for russia it is a little bit flat for the book but it has a great symbolic meaning. the u.s. r.b.c. has a public position supporting in the immediate permanent exemption of russia from jacksonville and i've testified on capitol hill in front of the house foreign affairs committee to that effect. what will be critical is when russia gets into the w.t. i would note that i said when. if the united states is to be able to take advantage

of the opportunities that russia's membership creates it will have to grant russia permanent normal trade relations p.n.t.r. in the lingo and in order to do that we have to remove jaxon van ic. if we don't. then. we will not be able to compete in the russian market on a level playing field with with with our competitor other countries you've mentioned w.p. i will this was actually my my next question because jets invented and then the russians and the russian russia's entry into the w t o were where they contradict each other so russia seems to have done everything to to to to meet the conditions that lovelies the us business has put in front of them and so you said when russia will join the devil two questions is russia really russia's presence

in the organization really welcomed by the he has business and what and when i don't think that will happen to me what do you expect will let me say first of all unequivocally u.s. business wants to see russia in the w t o. and and of course i wouldn't be taking a position advocating that if it weren't supported by our membership i'd like to maybe. take issue with what you said earlier that there are no remaining issues there are some remain really choose yes as part of the bilateral negotiating process there were six side agreements signed. and several of them are still. the implementation of those agreements is still pending let's talk about it because every time you have russian business and russian politicians here sitting in this and they see they say we've done everything well all the conditions that we had from washington everything's done way ready so this is not exactly true. not not

not from our perspective and i would say enough from a factual preserve if i can name several of them one is a mutual recognition of the sanitary feature sanitary standards of both countries veteran ery authority agent. give me the chicka chicka and it worked and the others are not other. that has not been resolved and. we can go into more detail on that but i don't want to be talking about chicken all it seems to be that is if they keep it that what you're. another is. full implementation of intellectual property rights and although russia has made major strides direction there are still major concerns about heat or net piracy about respect for data acquired through pharmaceutical testing submitted to regulatory authorities trade secrets russia adopted part four of the civil

code we maybe have to see how that is functioning. there are new measures that we understand have been new deuce in the duma so we hope to see some progress in that area in crippen it was a site agreement affecting the use of communications particularly in the internet realm and mobile telephone systems. and this site agreement allows. for exemption of many of these of these technologies from. authorisation or registration by. the f.s.b. . this was this was agreed through the executive authority both countries practical terms this is why blackberry still isn't that great in russia is that right there's something wrong with encryption the if is be and well that's one example and there

are others that no one can. import or. commercialize those products if they have not been. approved by the f.s.b. and this is now been level raised to the level of of legislation. last month the along the f.s.b. codified that now the question is can the side agreement be implemented at the executive level if there is a law in place it may in order to fulfill its commitment in the bilateral negotiating process russia may have to go back and change the f.s.b. law to do to exempt those areas another is russia's so-called buying things tariff bindings under the bilateral negotiating process. they reached us agreement on a broad range. many of those were breached with the implementation or nachman of or against by decree the imposition of emergency measures in january of two

thousand and nine those were supposed to have a nine month sunset period those remain in effect significantly higher tariffs for a range of products but another major issue and it won't be just between the u.s. and russia is russia's the creation of a customs union with kazakhstan and belarus this is resulted in significant changes to russia's customs code and those have to be reconciled with the commitments that russia has made through the negotiation process in geneva and this week indeed they're there they're holding working party meetings to try to do that that's a very. complex process and it may take it may take considerable time but despite the complexity you you you still don't say if russia you say when russia joined to do believe so the time the time is right i'm an optimist so so it means you think you will see that happen in their lifetime. i certainly hope so

ok and now our people specific questions well the the comic a philip said lukoil comic a philips is going to divest its investments in the russian oil company is it a side of distrust. the u.s. investor is in it to do two to two to russia's economy well conoco phillips is a member company and so i won't comment about the specifics of their decision. but let me maybe address a broader issue related to foreign participation in the oil and gas sector. it was one of the areas where you had the the early movers the companies investing very large amounts of money in greenfield projects. which had a very long lead time and i think i can mention here the p.s.a. projects in sokal and. so this is an is an area where western companies u.s.

companies in particular have a strong technological advantage and a lot of capital that it can bring to the table in an area where russia needs that that technology and the money for the next generation of oil and gas fields. two years ago at the height of the oil price eichel russia adopted amendments to the subsoil law that effectively. barred foreign companies from participating in fields that had the size and significance that was material to them. and and so the result we see is companies. showing much less enthusiasm thank you thank you very much for being with us i'm afraid the time is up just a reminder that my guest today was editor rhoda president and c.e.o. of the u.s. russia business council and that's it for now from all of us here if you want to

have your say on spotlight just drop me a line will be back with more for his panel comments on the what's going on in and outside russia until then they are to take care thank you.

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