Remarks by U.S. Trade Representative Ron Kirk and U.S. Ambassador to Russia John Beyrle at St. Petersburg International Economic Forum

June 5, 2009

Alexander Shokhin (President, Russian Union of Industrialists & Entrepreneurs), USTR Ron Kirk, Andrew Somers (President, AmCham) and U.S. Ambassador John Beyrle at the International Economic Forum in St. Petersburg

Ambassador Kirk: I felt it was very important to be here. Now more than ever, it's clear how interconnected our nations are in the global community. International trade can help to drive the world's economic recovery. Declines in trade have already cost millions of jobs around the world. Now nations must not turn inward. We must work together to sustain and grow a robust, rules-based global trading system.

To work together, to grow and expand. So it’s in that vein that, and that spirit that we have used our occasion to be here to further our talks with our friends from Russia about Russia becoming a part of a rules-based global trading system and joining the WTO. As President Obama expressed at the recent G20 summit in London, the U.S. is eager to see in seeing Russia take the final steps necessary to enter into the WTO and to evidence our commitment, we had a full team from our U.S. trade reps. Meeting with their Russian counterparts in Geneva last week to go over specific issues we believe need to be addressed. And I’m especially pleased that on this trip I had the opportunity to meet with First Prime Minister Shuvalov and Minister Nabiullina as well as a number of other important bilateral meetings which will help us further our dialogue. And while some of the work that remains to be done may seem more technical and tedious, it is important work that has to be finished in order for us to complete our mission, but I am pleased that both our colleagues and our colleagues in Russia and my colleagues in the United States believe that we are making satisfactory and substantive process. We believe that at the end of the day, this work will require a difference in the way that Russia does business, particularly bringing a greater degree of transparency to a number of these ministries, but we believe the upside has great potential, not only for Russian businesses, but for all Russian consumers as well. And in order to expedite that into your questions I just want to make one final point; the matters that remain to be resolved are important and they are steps that must be taken in order for Russia to become a member if the WTO. But these steps are at the core of our global trading system, and that is that for free enterprise to flourish for business to have the best opportunity to grow, and create jobs for families here in Russia, they must have the comfort of operating in a rules-based trading system. Now I would further emphasize that what we are asking Russia to do is what everyone who has joined the World Trade Organization has been asked to do. So finally, I am pleased that this particular forum accorded us the opportunity to engage in what I perceive to have been very constructive interventions with our colleagues from Russia. So with that, I’ll be happy to entertain your questions.

Question: I would like to ask two question. One is for Mr. Kirk and the other is for Mr. Beyrle. Yesterday, you were not available to make any particular agreements with Mr. Shuvalov and Minister Nabiullina. And when can we really expect Russia to become a member of the WTO? And now my question for Mr. Beyrle, during the meeting in July, our presidents are going to meet, so are the leaders ready to sign any type of agreement and is the project of a new agreement help discussions of nonproliferation and weapons of mass destruction.

Ambassador Kirk: Let me say my meeting with Mr. Shuvalov and Minister Nabiullina were very productive, we worked to elevate our discussions and negotiations from a pure technical level of what has to be accomplished to a higher level of what has to be done at the ministerial level for this to happen. I think in fairness to Mr. Shuvalov and Ms. Nabiullina, I would like to keep the substance of those talks, I think appropriately, between us, but I would say this, I think they have made no secret of their desire to have Russia admitted to the WTO, if possible, by the end of this year. We believe that the substance of our work will drive the timing of any decision of Russia’s ascension. But, I want to emphasize that the U.S. believes it is well past time for the largest economy in the world outside the WTO to become a part of the global trading community.

Ambassador Beyrle: With regard to President Obama’s visit to Russia in July, we’re all very much looking forward to this visit, and I can say that work to turn it into a productive and constructive set of discussions is already well underway. When the presidents met in London on April 1st, they laid out a very ambitious agenda and identified a number of areas in which the U.S. and Russia have converging interests, such as nuclear proliferations, such as reductions in our nuclear arsenals, which you referred to. The work to turn the very ambitious desires of the President into concrete accomplishments is well underway, and I have doubts that when the presidents meet in a month, we will have substantial progress to announce at that time.

Question: To what extent did you manage [to talk about?] Russian industries and Russian exports and what kind of goods are most interesting for the American market and could be competitive there?

Ambassador Kirk: If I think I understand your question, you asked about which Russian exports might be of most interest to the United States. I think obviously, in the past this relationship which is about $36 billion which in terms of its potential is very small, has been in the raw materials, and petroleum, but we think given Russia’s rich cultural and scientific history, there could be an extraordinary upside in the entrepreneurial areas and software, intellectual properties and those industries going forward. And if I might add, we think that is one of the reasons why the work that we are asking Russia to complete to change and modernize its intellectual property rights laws is not just for the protection of U.S. businesses. As Russia begins to develop and diversify your economy, and grow more of an entrepreneurial base, that will be just as important to your artists, to your entrepreneurs, your businesses, that they would then have that same protection.

Question: You said that President Obama might support Russia’s accession to the WTO by the end of the year. After your talks, how real, really, is Russia’s accession to the WTO by the end of the year? By that I ask for today, as of today. My other question is you mentioned specific issues, for us there are a few steps Russia must take. From the U.S. point of view, could you name a few please, because it’s very, very general.

Ambassador Kirk: Sure. Let me make sure I clarify my statement regarding timing. I think what I said is that at least Ministers Shuvalov and Nabiullina have been very public about their desire to see Russia admitted by the end of the year. But we believe the timing of Russia’s accession will be driven by the substance of our work. And we are prepared to engage Russia at the highest level to complete our discussions and work with them to resolve those issues that must be addressed in order that we might be able to achieve that goal. And with respect to an example of some of the issues, one, again the previous question was about products; my answer on that…reforming and changing Russia’s laws with respect to transparency and intellectual property is very important for any country that wants to be part of a global rules-based trading system. And also, I think you know, there is a recent ban by your Ministry of Agriculture and Veterinary Science on pork from the United States in response to the flu crisis was one that, we believe, continues to evidence behavior that has taken not based on sound science or trading rules, but to protect domestic industries. So we believe that it’s just as important as it is to implement the necessary changes in the law, it is equally important to have behavioral changes that accompany that as well.

Question: Mr. Kirk, in Russia for many years [we have] heard pledges of your support, but it is beginning to resemble the famous story of the boy who cried wolf. What leads us to believe that the new administration really, really wants Russia in the WTO? Thanks.

Ambassador Kirk: Well, let me answer you two ways. One, in order to be admitted to the WTO, every country that seeks accession has to reform its laws and behavior to be consistent with the rest of the global trading community. So this is a mirror in which both parties are looking at it, and having to examine our behavior in the past. With respect to the United States, I think as President Obama demonstrated yet again yesterday in Cairo, this is a very different United States, and a very different administration that is doing exactly what President Obama said in his inaugural speech by reaching out to the world with our hand open. So as President Obama made his statement at the G20 after meeting with President Medvedev that we would like to see Russia join the WTO, as evidenced by our presence in Geneva last week with your team and here this week, we believe that we are demonstrating the good faith necessary to prove that we are willing to work to make that happen. And if you’ll forgive me for giving a U.S. sports analogy, but as we say, now the ball is in Russia’s court. And we are very envious that you have two finalists in the French Open. How about two more questions.

Question: A question to Ambassador Beyrle. Could you please comment on the recent statement by President Medvedev about the unipolarity of the world being one of the causes of the world economic crisis. How accurate is this statement? And the second question is also about our President. He has been president for a little bit more than a year. As Ambassador to Russia, do you see many significant changes?

Ambassador Beyrle: Well, with regard to the internal politics in Russia, I think I’ll leave that to the Russian people and the Russian press to describe. With regard to the causes of the world economic crisis, I think obviously there are a number of causes for that. We’ve been very open in talking about some of the regulatory reform that is necessary in our own country, that’s been made very plain over the last eight to twelve months, and I think the discussions that are going on now within the G20, within the IMF and within the World Bank involving a number of economies, major world economies, shows us that the way out of this crisis is through combined action, and I think it’s very clear, the Obama administration has made it abundantly clear that it is committed to a consensus based approach to help us all pull ourselves out of the economic crisis we find ourselves in and build a stronger world economic system that will preclude a repetition of such a crisis in the future.

Question: Mr. Kirk, you just mentioned that Russia’s ban on pork imports was aimed to protect domestic producers, but then, and that it has nothing to do with safety concerns. So is the United States going to do something to try to influence Russia to lift the ban?

Ambassador Kirk: We have spoken very directly to our concerns, to our very deep concerns over the actions taken by Russia to ban pork and pork products from the U.S. in response to the H1N1 flu outbreak. And we are firmly of the mind that the bans are not consistent with international standards and have no scientific justification. We completely understand that it is every country’s responsibility to protect the health and safety of its public, but we believe that the statements issued by the World Health Organization, along with the WTO, as well as the organizations related to animal health and safety and food and safety standards, all validating the fact that there is no scientific justification for any belief that you could catch the H1N1 virus by consumption of properly prepared pork products. And again, as a member of the World Trade Organization, we all commit to take actions that are consistent with sound scientific and sanitary standards. And we continue to hold out hope that Russia will move as quickly as possible to reverse this ban.

Question: Has any progress actually been made during your visit to Russia? Who did you talk to? Could you give us a bit more details on that?

Ambassador Kirk: Let me say quickly that I have reemphasized our concern with all the Russian officials with whom I have met, and we are hopeful that with additional data that we have provided to them that they will move and act appropriately as soon as possible.

Question: You are obviously in a bilateral negotiation process with Russia, but for Russia to join the WTO, the assent of all its members will be necessary. So my question is, how do you anticipate the bilateral negotiation to segue into the multilateral process and do you anticipate any obstacles?

Ambassador Kirk: Thank you, first of all that is a very important observation, that this is in fact a multilateral consideration, and the U.S. is not so arrogant as to believe that ours is the only voice that will be heard. But, we are of a position and have made a commitment to Russia that if we can resolve the issues that we have asked them to resolve satisfactorily, it will allow the United States to be in an enthusiastic supporter of Russia’s accession to the WTO. Thank you all for coming.