Russia joins the WTO in August and is primed for growth. But U.S. companies may find it difficult to benefit because of a Cold War- era law restricting American companies from doing business in the U.S.S.R. It looks like the repeal of it will be passed by the Senate in august. But if it contains a reference to the Magnitsky bill US companies may still face difficulties in Russia. Devote 3 minutes to watching Chrystia Freeland talk to Klaus Kleinfeld, Chairman and CEO of Alcoa about Russia joining the WTO:
As you know, Russia is one of the BRIC countries and the rest of the world is eagerly hoping to benefit from more trade with Russia as soon as it’s WTO membership starts this August .
Russian intelligence establishment still have cold war mentality?
But even when the US cold war legislation is removed, cold war mentality may still remain an obstacle on the Russian side.
If it’s true that the Siloviki i.e. heads of Russia’s elite security and intelligence establishment, including Vladimir Putin, still remain in the cold war and the Kremlin dictated anti-Americanism continue, maybe the cold war isn’t over? On top of it businessmen are going to jail on a regular basis on charges that have frequently been unjust. The last ten years 3 million, yes you got it right, entrepreneurs have been jailed.
As a WTO member, Moscow will be required to cut import tariffs and open up key sectors of its economy to foreign investment. It took 18 years of negotiations and Moscow will now be required to cut import tariffs and open up key sectors of its economy to foreign investment. But many Russians are afraid their country will not be able to compete in the world economy.
It’s believed US exports to Russia could double as a result of WTO entry. Germany is one of Russia’s top trading partners and their ministry of economy estimates that German businesses doing business with Russia could earn an extra billion euros a year.
Jackson-Vanik repeal with or without reference to the Magnitsky bill?
It hence comes as no surprise that the US Senate Committee of Finance approved a bill combining a repeal of the Jackson-Vanik Amendment and a measure aiming to punish Russian officials involved in the death of lawyer Sergei Magnitsky. Can’t help wondering how that’s going to go down with the Silovikis? That the White House is pushing for Jackson-Vanik repeal without reference to the Magnitsky bill doesn’t surprise me at all. The latter seems to be a better bet of avoiding US companies going down the same route as BP in Russia. Would like to point out that what happened to Magnitsky was terrible but is tying the Magnitsky bill to the repeal of the Jackson-Vanik amendment not asking for trouble for US companies in Russia?
Do you believe the Russian Siloviki still have cold war mentality and the Kremlin dictate anti-Americanism? If so is the cold war really over? Is the Cold War-era law restricting American companies from doing business in the U.S.S.R. lamentable or a blessing in disguise for US businesses? Does it benefit companies from other countries? Are you of the opinion that the Jackson-Vanik repeal should be made with or without reference to the Magnitsky bill? Should the United States and the rest of the world be cautious about doing business in Russia?