Russia is proposing to boost trade with the U.S. by using a comprehensive package of agreements on issues including investment and regulations, a Russian government official said.
The parameters of a bilateral investment treaty could be complete within the next year, and deals on regulations and standards could be finished within five years, the official said yesterday during a lunch with journalists in Washington. He spoke on the condition of anonymity because the negotiations are in a preliminary stage.
The Russian proposal would contain measures to increase commerce between the two nations, which last year amounted to about $40 billion, though it wouldn’t be a full free-trade deal, the official said. Talks may resume at the World Economic Forum meeting in Davos, Switzerland, in January, he said.
The official said Russia isn’t ready to discuss joining the Trans-Pacific Partnership agreement, which the U.S. is now brokering with 11 regional nations.
Russian officials have been in Washington this week to meet with members of President Barack Obama’s administration, including U.S. Trade Representative Michael Froman and Energy Secretary Ernest Moniz. Froman yesterday met with Igor Shuvalov, Russia’s first deputy prime minister.
“Both sides agreed to work together to address barriers to trade and investment and continue discussion on the possibility of a bilateral investment treaty,” Anne Eisenhower, a USTR spokeswoman, said in an e-mailed statement.
The overture from the Russian government comes during a time of tumultuous relations with the U.S. Friction has arisen over political unrest in Ukraine and Russia’s protection of Edward Snowden, the former National Security Agency contractor who acknowledged leaking classified U.S. documents.
“One of the reasons that the relationship between the two countries is so volatile is because there’s a very limited amount of economic ties” between them, Jeffrey Mankoff, deputy director of the Russia and Eurasia program at the Center for Strategic & International Studies in Washington, said in a phone interview.
The two nations have joined forces to broker deals to eliminate chemical weapons in Syria and reach a nuclear agreement with Iran.
The $40 billion in U.S. commerce with Russia last year represented about 1 percent of total U.S. trade, according to U.S. Commerce Department data. Since 2009, as global trade began to recover from a worldwide economic crisis, U.S. trade with Russia has increased by about 70 percent.
Russia has the world’s eighth largest economy by output and last year joined the World Trade Organization. The U.S. has the world’s largest economy.
Caterpillar Inc. of Peoria, Illinois, and Boeing Co. of Chicago were among companies that lobbied the U.S. last year to alter a Cold-War era law to give American businesses a stronger legal footing when dealing with Russia in the WTO.
Machinery and transportation equipment accounted for about half of the $10.7 billion in U.S. exports to Russia last year, with chemicals and food each comprising another 10 percent. Petroleum and coal products made up about 59 percent of the $29.4 billion in U.S. imports from Russia last year.
“U.S. companies still recognize Russia as an enticing market because it’s big,” Mankoff said.