Russia-US Ties Strained by Trade Issues, Suspicions

By Sergei Blagov | July 7, 2008 | 8:17 PM EDT

Moscow ( - Russia will host a G8 summit for the first time this summer, at a time when relations with Washington are strained by the retention of a Cold War-era U.S. measure affecting trade ties, slow progress of negotiations for Russia's accession to the World Trade Organization, and suspicions of U.S. ambitions.

Visiting Russia this week, U.S. Senate majority leader Bill Frist made it clear that Moscow's stance on Iran's nuclear program and as well as pressures on democracy in Russia would be factors in discussions on whether trade restrictions can be scrapped.

An amendment to the Trade Act of 1974 (known as the Jackson-Vanik amendment) links U.S. trade relations with many former communist countries to the rights of their citizens to emigrate freely. If a country is found to be restricting migration rights, the U.S. president must issue an annual waiver for permanent normal trade relations (PNTR) to continue.

Three decades ago, the amendment linked normalization of trade relations with Jewish migration from the then Soviet Union. Russian politicians argue that the problem has long ago become irrelevant, but U.S. lawmakers are understood to be reluctant to rescind the amendment because it provides for extra pressure on Russia with regard to other political and economic issues.

Russia was stung by last month's House of Representatives vote to lift the amendment with regard to Ukraine, a move that authorizes President Bush to go ahead with PNTR.

A former constituent part of the Soviet Union, Ukraine is now expected to join the 149-member WTO ahead of Russia.

A U.S.-Russia agreement to join the WTO has been hampered by intellectual property protection issues, limited access for certain U.S. agricultural products and civil aircraft, branching rights for U.S. financial and insurance companies, and Russian agricultural subsidies.

Senior Russian lawmaker Konstantin Kosachev, head of the State Duma (lower house) international affairs committee, said last week the U.S. was practicing double standards by retaining the Jackson-Vanik amendment with regard to Russia, but lifting it in the case of Ukraine.

"In the past few years about 100,000 Jews [who earlier left] have returned to Russia, and any kind of argument that Jews cannot leave our country is ridiculous," he said.

Russian Foreign Minister Sergei Lavrov said the U.S. "owes" it to Russia to lift the Jackson-Vanik restrictions and support at the WTO.

He rejected the possibility that Moscow would soften its position on the Iranian nuclear problem in exchange for an agreement with Washington on WTO accession.

"Bartering anything for the WTO, particularly Iran -- such an idea has not even occurred to us," he said.

Despite the disagreements of the amendment, at a news conference in Moscow Monday Frist did voice support for Russia's accession to the WTO.

He also backed the administration plans to attend the G8 summit in St. Petersburg next July. Russia holds the rotating chair of the group, which brings together Russia and the seven leading industrialized economies - the United States, Britain, Canada, France, Germany, Japan and Italy.

Republican Senator John McCain has urged Bush to boycott the summit, citing human rights concerns and democracy rollbacks under President Vladimir Putin.

The criticism is not well-received in Moscow.

Mikhail Marguelov, head of the Federation Council (upper house) international affairs committee, dismissed McCain's call as "routine day-to-day Russophobia."

"Something extraordinary, like a recall of ambassadors, would have to happen between Moscow and Washington to force President Bush to cancel his trip to St. Petersburg," Marguelov said.

In another sign of deepening suspicions about the U.S., Russian security figures were disturbed by a recent magazine article suggesting that the U.S. had the capability of carrying out a nuclear strike against Russia and China without risk of serious retaliation.

The Russian media quoted the authors of the article in Foreign Affairs - a publication of the Council of Foreign Relations - as saying Russia's strategic nuclear forces were currently hardly fit for combat and that, for the first time in nearly 50 years, the U.S. is on the verge of nuclear domination.

"Of course, this is not true," declared Viktor Mikhailov, head of the Strategic Stability Institute and a former nuclear energy minister.

"The level of our nuclear weapons is very high, one of the best in the world."

A former chief of staff of strategic missile forces, General-Colonel Viktor Esin, said the U.S. anti-missile defense systems would not be able to limit the effectiveness of Russian strategic nuclear forces until 2020 at the earliest.

Leonid Ivashov, a retired general and vice-president of the Academy of Geopolitical Problems, called the publication "an attempt to put pressure on Russia" and prevent it from forging closer ties with China.

He said the article was "a good reminder" that Russia needed to improve its missile-attack warning system and upgrade all the three components of Russia's strategic nuclear forces.

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