ASSISTANT SECRETARY GORDON: Thank you John. Let me also welcome you here, it’s nice to see everybody and thanks for taking the time to come out. There are two reasons I wanted to meet with this group early in my visit. As the Ambassador said, this is literally the first visit that I’m having off the plane. One reason is to hear from you all who are working these issues every day, about the challenges you face in building the sort of Russia we want to see that is more democratic, with respect for human rights, transparency. And the other is by doing the meeting visibly to demonstrate our support for your work on those very issues.
I hope you’ll agree that we have stuck to that principle. In every meeting I’ve been in with the President and his Russian counterparts or the Secretary of State and her Russian counterparts, human rights and democracy and our strong support for rule of law and transparency has been high on the agenda.
And you’ll remember, of course, when President Obama was here last summer at the summit and meeting with NGOs and political opposition and students, again, as a sign of our vigorous support for a vibrant civil society in Russia and a chance for him to hear personally from people like you about what the real situation is.
We know that what you do is not only difficult but sometimes even dangerous. We’re well aware of cases like Anna Politkovskaya, Paul Klebnikov, Natalya Estemirova, and of course we’re coming on the anniversary of the Magnitsky case and we are very conscious of those issues and focused on them in our bilateral discussions with Russia.
So I know you are all regularly in close touch with the Ambassador and the embassy on these issues and they of course report to us in Washington, but again I see this as an opportunity to hear from you directly. So again, thank you very much for coming and I look forward to some conversation. Spasibo.
In one of his earliest new foreign policy initiatives, President Obama sought to reset relations with Russia and reverse what he called a “dangerous drift” in this important bilateral relationship. President Obama and his administration have sought to engage the Russian government to pursue foreign policy goals of common interest – win-win outcomes — for the American and Russian people. In parallel to this engagement with the Russian government, President Obama and his administration also have engaged directly with Russian society — as well as facilitated greater contacts between American and Russian business leaders, civil society organizations, and students — as a way to promote our economic interests, enhance mutual understanding between our two nations, and advance universal values. On the occasion of President Medvedev’s visit to the United States and one year after President Obama visited Russia, it is time to take stock of what has been achieved from this change in policy and what remains to be done in developing a more substantive relationship with Russia.
Government-to-Government Agreements and Accomplishments
The New START Treaty:
On April 8, 2010, in Prague, Presidents Obama and Medvedev signed the New START Treaty, a strategic offensive arms reduction treaty to follow-up on the START Treaty, which expired on December 5, 2009. The New START Treaty reduces limits on U.S. and Russian deployed strategic warheads by approximately one third. The Treaty provides the flexibility needed for the United States to structure its forces at the reduced level to meet national security and operational requirements.
The Treaty limits each side to 1550 deployed strategic warheads, 700 deployed strategic delivery vehicles, and 800 deployed and non-deployed ICBM launchers, SLBM launchers and heavy bombers equipped with nuclear armaments. The Treaty has a strong verification regime to allow each party to confirm that the other party is in compliance with the treaty limits, including on-site inspections, data exchanges, exhibitions, and notifications about the movement and production of strategic systems, as well as a provision on non-interference with National Technical Means of verification.
In their June 24 Joint Statement on Strategic Stability, President Obama and President Medvedev acknowledged their commitment to continuing the development of a new strategic relationship based on mutual trust, openness, predictability and cooperation by following up on the New START Treaty.
Since 2009, President Obama and President Medvedev have worked closely to address the international challenge presented by Iran’s nuclear program and its failure to meet its international obligations, and have built a strategic partnership on this issue. Robust U.S.-Russia cooperation on Iran has manifested itself through the P5+1, as well as on the original IAEA proposal to supply nuclear fuel to the Tehran Research Reactor in exchange for Iran’s low enriched uranium being shipped out of Iran and held under IAEA safeguards.
As a result of Iran’s continued failure to meet its international obligations on its nuclear program, President Obama and President Medvedev worked closely with other members of the UN Security Council to reach an agreement on UN Security Council Resolution 1929, the most comprehensive set of sanctions against Iran to date, to demonstrate that there will be a cost to Iran for not meeting its international obligations on its nuclear program. U.S.-Russian partnership in crafting this resolution was critical to its successful adoption. UNSCR 1929 imposes restrictions on Iran’s nuclear activities; its ballistic missile program; and, for the first time, its conventional military. This was a particularly important step for Russia, which has confirmed that it will not deliver S-300 missiles to Iran, in accordance with the new resolution. The resolution will put a new framework in place to counter Iranian smuggling, and crack down on Iranian banks and financial transactions. It targets individuals, entities, and institutions – including those associated with the Revolutionary Guard.
Russia joined the United States in supporting UN Security Council resolution 1874 in response to North Korea’s nuclear test. The resolution condemned in the strongest terms the May 25, 2009, nuclear test by the Democratic People’s Republic of Korea and tightened sanctions against it by blocking funding for nuclear, missile and proliferation activities through targeted sanctions on additional goods, persons and entities, widening the ban on arms imports-exports, and called on Member States to inspect and destroy all banned cargo to and from that country on the high seas, at seaports and airports if they have reasonable grounds to suspect a violation.
In addition to the New Start Treaty and actions taken against Iran and North Korea, the U.S. and Russia have made significant progress in developing our common nonproliferation agenda over the past eighteen months. Russia joined the United States in supporting the UN Security Council Resolution 1887 on September 24, 2009. Russia also played a critical role in President Obama’s Nuclear Security Summit, held on April 12-13, 2010. On the sidelines of this meeting, the United States and Russia signed a protocol to amend the 2000 Plutonium Management and Disposition Agreement, which commits both countries to dispose of 68 metric tons or approximately 17,000 nuclear weapons-worth of excess weapons-grade plutonium. Russia recently shut down its last remaining weapons-grade plutonium production power plant.
Russia also has established an international nuclear fuel bank that provides incentives for other nations not to acquire sensitive uranium enrichment technology. In support of the July 2009, U.S.-Russia Joint Statement on Nuclear Cooperation, the United States and Russia have accelerated and expanded efforts to secure and remove vulnerable nuclear material from around the world. In particular, we have worked together to remove or dispose of 475 kilograms of nuclear weapons-usable highly enriched uranium fuel and plutonium (enough for over 19 nuclear weapons) from 8 countries. This included the complete removal of all weapons-usable HEU from three countries. While it is not yet agreed, Russia has been supportive of U.S. efforts within the Nuclear Suppliers Group (NSG) to strengthen controls over enrichment and reprocessing technologies. The U.S. and Russia also continue to build upon over fifteen years of significant cooperation to strengthen the security of nuclear facilities and materials.
Over the last 18 months, the Obama Administration has expanded the volume of supplies being shipped to our troops in Afghanistan through the Northern Distribution Network (NDN), thanks in part to Russia’s agreement to allow ground and air transit for troops and supplies for Afghanistan through its territory. At present, 30 percent of supplies to our troops in Afghanistan travel over the NDN, and of this cargo, 65 percent of the supplies being routed through the NDN transit through Russia. Russia’s participation in the NDN has allowed the U.S. to expand more efficient and direct routes that offer a strategic and vital alternative to the Pakistan routes.
Russia’s agreement to fund the navigation and flight fees for 4,300 official U.S. flights and allow air transit for unlimited amounts of commercial charter flights with supplies has been vital to bringing in troops and supplies for the surge in troops President Obama ordered as a result of his review of our efforts to secure and stabilize Afghanistan. Since the Afghanistan Air Transit Agreement was signed with Russia at the July 2009 summit, over 35,000 U.S. personnel and troops have flown to Afghanistan via the Russian routes. Russian companies also have provided vital airlift capacity for over 12,000 flights in support of our operations in Afghanistan and Iraq, thirty percent of the fuel U.S. military troops use in Afghanistan, and over 80 MI-17 helicopters to the Afghan National Army, Afghan National Police, and Afghan Drug Interdiction Forces. During their meeting on June 24, 2010, President Medvedev pledged to provide 3 more MI-17 helicopters to the NATO-led effort in Afghanistan, and offered to provide more than a dozen more under a special financial arrangement.
In addition, the Counternarcotics Working Group under the U.S.-Russia Bilateral Presidential Commission has established cooperation on reducing the supply of narcotics from Afghanistan to Russian territory, including joint operations, enhanced information sharing, stopping illicit financing of Afghan-related terrorism from narcotics trafficking, and cooperation on demand reduction.
In response to the coming to power of a Provisional Government in Kyrgyzstan in April 2010, Presidents Medvedev and Obama and their administrations closely coordinated their efforts to enhance stability. After the tragic outbreak of violence in Osh and Jalalabad in June 2010, American and Russian diplomats have closely coordinated our common responses, both in the provision of humanitarian assistance and in the development of multilateral responses to the crisis. On June 24, Presidents Obama and Medvedev issued a joint statement affirming our common interest in supporting the people of Kyrgyzstan in their efforts to prevent further violence, address the current humanitarian crisis, and restore stability and democracy.
The Obama Administration continues to have serious disagreements with the Russian government over Georgia. We continue to call for Russia to end its occupation of the Georgian territories of Abkhazia and South Ossetia, and in parallel have worked with the Russian government to prevent further military escalations in the region. We have witnessed some incremental confidence building measures, such as opening the border at Verkhniy Lars and allowing direct charter flights between the two countries, and continue to press for the strengthening of the Incident Prevention and Response Mechanisms and a return of international observers to the two occupied regions of Georgia.
Accelerating Russia’s WTO Accession:
After a long lull while Russia focused on forming its Customs Union with the Republics of Belarus and Kazakhstan, the United States and Russia have intensified their discussion regarding Russia’s WTO accession. On April 27, 2010, First Deputy Prime Minister Shuvalov led a high-level Russian government delegation to Washington to meet with Director of the White House National Economic Council Larry Summers, USTR Ambassador Ron Kirk, and other senior Obama administration officials. This meeting produced a roadmap of necessary steps needed to be taken by Russia to accelerate its WTO accession. The United States pledged to provide additional technical assistance to help speed the process of revising Russia’s WTO Working Party Report taking into account the new Customs Union. On June 24, based on the significant progress achieved, including agreement on the treatment of state-owned enterprises, and provided that Russia fully implements the mutually agreed upon action plan for bringing Russian legislation into compliance with WTO requirements, the Presidents agreed to aim to settle remaining bilateral issues by September 30.
American-Russian Cooperation in Managing the Global Financial Crisis:
The United States and Russia have collaborated closely within the framework of the G20 on measures to address the global economic crisis, and on the coordination of the reform of financial regulation. In addition, the United States and Russia have worked to improve the governance and capacity of the International Monetary Fund and the World Bank.
Resubmission of the 123 Agreement:
If approved, the U.S.-Russia 123 Agreement would provide a solid foundation for long-term U.S.-Russia civil nuclear cooperation; create commercial opportunities for U.S. industry; and enhance cooperation on important global nonproliferation benefits. The Agreement would allow for potential commercial sales of civil nuclear commodities to Russia by U.S. industry and joint ventures between U.S. and Russian firms to develop and market civil nuclear items as well as proliferation-resistant nuclear technologies. In addition, the Agreement has the potential to increase cooperation between Russia and the United States in their nuclear supply policies and approach to the fuel cycle.
On June 24, our Presidents agreed to implement a multifaceted initiative to promote energy efficiency and the development of clean energy technologies under the Action Plan of the Bilateral Presidential Commission’s Energy Working Group. The centerpiece of this collaboration will be the development of a pilot smart grid project based on the most innovative technologies to cut losses in electric power systems and reduce emissions. Russian and U.S. cities will be matched to implement similar projects, and to share best practices and technical information. The Action Plan also includes implementing energy management and technical programs to improve energy efficiency in Russian and U.S. public sector buildings. The U.S. and Russia also agreed to develop financial mechanisms to help create investment incentives for small and medium sized private companies to promote energy efficiency and clean technologies.
Creation of the Presidential Bilateral Commission:
During their meeting in Moscow on July 6, 2009, Presidents Medevedev and Obama established the U.S.-Russia Bilateral Commission consisting of sixteen working groups ranging from nuclear cooperation, space, health, military-to-military, cultural and sports exchange, to civil society. Since the creation of the commission, dozens of delegations have traveled to each country, video conferences have been held, and numerous new bilateral activities and programs have emerged to pursue projects of mutual benefit to the American and Russian people. We also agreed to add an Intelligence Sharing Working Group to the Commission. The Commission’s first annual report was published on June 24, 2010, and can be accessed at the Commissions website: www.state.gov/russiabpc
Russia and the United States agreed to renew bilateral military cooperation and have approved a work-plan for this cooperation under the Defense Cooperation Working Group of the Bilateral Presidential Commission. Russia and the United States also have cooperated successfully on anti-piracy operations off the coast of Somalia and have committed to intensify counter-piracy cooperation. The U.S. sponsored Russia’s UN Security Council resolution for an UN-led study on the cost and effectiveness of various approaches to prosecute pirates.
Dual Track Engagement in Support of Universal Values:
The Obama Administration has pursued a strategy of dual-track engagement – engagement of Russian government officials and in parallel Russian civil society — to advance democracy and human rights within Russia. Through government-to-government channels, the Obama Administration has looked for ways to support President Medvedev’s efforts at fighting corruption and deepening the rule of law. In the spring of 2010, American and Russian officials met several times to discuss open government initiatives in both countries, interactions which produced the Joint Statement on Open Government released by our two countries during President Medvedev’s visit to Washington on June 24, 2010. The Working Group on Civil Society also has tackled the issues of anti-corruption, child protection, prison reform, and migration.
In parallel to these government-to-government exchanges, Obama Administration officials meet frequently and directly with Russian civil society leaders, be it through President Obama’s attendance at parallel civil society summit in Moscow last July, President Obama’s meeting with human rights activists from Russia and other countries in February 2010, Secretary Clinton’s meeting with human rights activities and civil society leaders in Moscow in October 2009, or everyday encounters between U.S. government officials and Russian civil society leaders in Moscow and Washington. The Obama Administration also has encouraged peer-to-peer dialogues between American and Russian civil society leaders, while at the same time expanding financial support through the U.S. Agency for International Development (USAID) for programs on rule of law, human rights, civil society, media, and political processes.
While seeking to engage the Russian government and Russian civil society in ways to promote universal values, the Obama Administration has not shied away from criticizing human rights abuses, including our public condemnation of the murder of human rights defender Natalya Estemirova, our statement on irregularities in the October 2009 regional elections, and our expression of concerns for arrests of peaceful demonstrators. Speeches by President Obama and Secretary Clinton in Moscow have underscored our commitment to defending human rights and advancing democracy around the world, including in Russia.
Supporting President Medvedev’s Initiative on Innovation:
The Obama Administration has welcomed President Medvedev’s focus on innovation and has looked for ways to support this initiative. In February, 2010, the State Department and National Security Staff led a delegation of high-tech executives to Moscow and Novosibirsk to help promote this innovation agenda, including promoting entrepreneurship, openness and transparency, internet freedom and freedom of expression, and the use of communications technologies to augment the work of traditional civil society organizations. In the wake of this visit, a new forum called “Rustechdel” has been created, matching information technology professionals with civil society actors. Russian civil society organizations in Siberia have adopted tools, such as live streaming to conduct training for Siberian non-governmental organizations in managing administrative responsibilities and promoting respect for human rights. Private sector Russian entities have teamed up with healthcare experts to establish a “Text4Baby” program, using sms texting to inform pregnant mothers of issues related to the health of them and their babies. Private sector entities from the United States are working to outfit orphanages in Novosibirsk with computers and links to the internet as well as partnering with Russian non-governmental organizations to provide mentoring in life skills and appropriate usage. United States non-governmental organizations have teamed up with Russian partners to offer prizes to Russian software developers to produce programs and tools that would help to combat trafficking in persons. In May 2010, Obama Administration officials also participated in the “The First Venture Capital Trip to Russia”, a program organized by AmBar and Rusnano which brought two dozen venture capitalist from the United States to Russia to explore investment opportunities. During President Medvedev’s visit to Washington on June 24, the U.S. and Russian government issued joint statements on collaboration in the areas of innovation and open government.
Supporting People-to-People Exchanges:
The Education, Culture, Sports and Media Working Group of the U.S.–Russia Bilateral Presidential Commission has expanded and enriched connections between Russians and Americans through arts exchanges, sports diplomacy, cultural performances, exhibitions, and engagement through traditional and social media. The State Department has committed to a substantial increase in Fiscal Year 2010 funds to support these activities. In parallel, new non-government partnerships between Russian and American student organizations, cultural groups, and artists have expanded, sometimes with but oftentimes without U.S. government support. On June 24, 2010, Presidents Obama and Medvedev issued a Joint Statement on People-to-People Connections, articulating a shared desire to see such contacts continue to grow.
The U.S.-Russian Foundation for Economic Advancement and the Rule of Law:
In June 2009, the U.S.-Russia Foundation for Economic Advancement and the Rule of Law (USRF) registered in Russia as an affiliate of the non-profit organization USRF in the United States and has begun to work with Russian institutions to develop projects that encapsulate the principles of enterprise, accountability, and partnership. Among other new projects and grants, the USRF continues to support the Center for Entrepreneurship in Russia.
Private, Non-Governmental Initiatives and Activities
Parallel Business Summits:
In July 2009, during the Presidential Summit in Moscow, American and Russian business associations convened a parallel business summit that included hundreds of business representatives and CEOs from both countries. During the June 24, 2010 summit in Washington, American and Russian CEOs convened a small meeting of representatives from a number of different sectors to discuss ways in which to expand trade and investment and foster conditions conducive to innovation in both countries. American and Russian business associations also convened a parallel business summit that included participation by senior government officials from both countries.
Parallel Civil Society Summits:
In July 2009, American and Russian non-governmental organizations, including Eurasia Foundation, the New Eurasia Foundation, and CSIS convened a parallel civil society summit to coincide with the Presidential summit in Moscow. American and Russian non-governmental organizations gathered to discuss a number of themes including anti-corruption measures, community development, health, and media among others. During the meeting, President Obama appeared, hearing reports from representatives of the different working groups and making remarks. During the June 24 summit in Washington, IREX and New Eurasia convened a steering group meeting of civil society organizations, many of whom participated during the 2009 summit, to continue discussion in many of the same thematic areas and additional ones, such as education and child protection. During the session, information technology specialists interacted with traditional civil society actors to offer suggestions and ideas for how new technologies and innovation can complement and augment the work of the different groups. The steering committee laid the foundation for institutional engagement in the coming year for expanded participation by both American and Russian groups.
Expanding Trade and Investment:
Rostechnologiya and Boeing signed a proposal acceptance to enter into a sale of 50 737 Boeing aircraft with a potential additional sale of 15 planes to the Russian national airline Aeroflot. The multi-billion dollar sale will create potentially 44,000 new jobs in America’s aerospace industry. U.S. companies have opened new manufacturing facilities in Russia in the areas of soft drinks, paper, and tractors. In July 2009, PepsiCo announced it will invest nearly one billion USD in drink and food manufacturing facilities in Russia, including a new bottling plant in the Domodedovo, Moscow region. In April 2010, a joint venture between International Paper and Ilim Pulp announced an investment of 700 million USD to build a new kraft pulp mill in Bratsk. That same month, Deere & Company announced the opening of a new manufacturing and parts distribution facility, amounting to approximately a 500 million USD investment. In May 2010, Kimberly-Clark announced the opening of a 170 million dollar plant in the Moscow region producing diapers. On June 4, 2010, GE entered into a Memorandum of Understanding with Russian state corporations Russian Technologies and Inter RAO UES, to pursue a strategic cooperation relationship for the production and distribution of industrial products needed to address Russia’s growing infrastructure demands. The MOU specifically contemplates the formation of joint ventures in the areas of power generation and healthcare equipment. While the terms of the joint venture agreements have yet to be finalized, the arrangement could result in billions of dollars in revenues to GE over five years, ultimately helping to support jobs and innovation in both Russia and the United States. On June 17, 2010, Chevron Corp. and OAO Rosneft agreed to explore for oil and natural gas on a block in the Black Sea, a project that could lead to more than 1 trillion rubles ($32 billion) in spending. On June 17, 2010 American lithium-ion battery manufacturer Ener1, Inc. signed a memorandum of understanding with Russia’s Federal Grid Company (MICEX: FEES) to help develop new opportunities to use high-performance battery systems to improve the reliability and performance of the Russian electricity system, which is facing record setting demand on an aging grid. In June, Siguler Guff & Company, a U.S.-based private equity firm, made a $250 million commitment towards the development of Russia’s innovation economy through its investment in a network of carrier-neutral data centers being built in Moscow and other Russian cities. The company’s Russia-based sponsor, DataSpace, responsible for overseeing this investment, will locate its headquarters in Skolkovo, the future high-tech center. On June 23, during President Medvedev’s visit to Silicon Valley, Cisco announced a pledge of one billion dollars in investments over the next ten years in technology projects in Russia, and that it would establish a second headquarters at Skolkovo for its emerging technologies unit. U.S. angel investors in the high-tech sector have created business incubators in Saint Petersburg and Novosibirsk and, working with Russian partners, have created an entrepreneurial fund for Russian start-ups. The Russian government has liberalized its visa and registration requirements for skilled workers coming to work in the area of innovation.
Changing Russian Attitudes toward the United States:
According the Pew Research Center, the number of Russians with a favorable attitude towards the United States has increased from 44 percent in 2009 to 57 percent in June 2010. In another poll by the Moscow-based Levada Center, Russian favorable attitudes towards the United States increased from 38 percent in January 2009 to 60 percent in May 2010. According to Levada, the percentage of Russians with negative attitudes has decreased from 49 percent in January 2009 to 26 percent in May 2010.
Preserving U.S.-Russian Historical Legacy:
On June 22, 2010, the Russian company Renova signed a Memorandum of Understanding with Office of the Governor of California establishing a foundation that will assist in the restoration of the historic Fort Ross, the hub of the southernmost Russian settlements in California at the beginning of the 19th century.