Ralph Winnie Jr., Contributing Editor's Article "Closer to China" in the Washington Post

http://www.divshare.com/download/18563679-719


During President Barack Obama’s recent trip to the People’s Republic of China, he strongly
urged China to strengthen its currency as tensions escalate between the United States and
China over exchange rates. While both President Hu Jintao and President Obama agreed to
work together on pressing international issues, Obama has now joined many world leaders
calling on China to allow its currency, the renminbi, to appreciate. Obama contends that the
currencyis undervalued and damages U.S. exports. The Russian Federation, however, has been
quiet on this matter.

The People’s Republic of China has become a major economic player in the world community.
As China continues to grow, Russia views the situation as more of an opportunity rather than a
threat. China has been successful in actively promoting joint venture partnerships with profitable
Western companies. Currently, Russia lacks the ability to effectively integrate these new
technologies into the fabric of its economy.

The Russian government recognizes that the key to developing a robust and stable economy is
to push strengthening relations with China. Russia is eager to understand how China has been
able to rapidly absorb and utilize Western know-how and entrepreneurial business success;
itseeks to emulate China’s relatively open economy. Privatized Chinese companies can now
work together with Western companies to develop, refine and control capitalism. By contrast,
Russia’s economy has been characterized as unstable, unmanageable and unworkable. This is
due to the interrelation of organized crime with Russian political leaders and nationalization of
successful foreign businesses.

Many members of the Russian politburo have strong ties with oil and natural gas companies
seeking to increase and expand their presence in Asia. Many people associated with these
firms are former high-ranking Russian military officers, including ex-KGB, who were among the
most professionally trained in the former U.S.S.R. These people seek out profitable joint
venture business opportunities, thereby hoping to prevent the United States from dominating
global affairs. According to recent studies, many Russians (47 percent) have responded
favorably to increasing trade contacts and ties with China. Russians view the rise of China as
the result of a more multipolar world. They believe that the United States must learn to coexist
with other rising powers, including China and Russia.

While the Russian government wants to protect and defend Russia’s sovereignty, they
recognize that the Federation may be better protected through closer economic ties with China
rather than the West. Many Russians believe that the Chinese respect a country’s internal
affairs and don’t seek to enforce the ideals of a “good society” on other sovereign nations.
Moreover, President Hu Jintao echoed the Russian sentiment toward U.S. policy when, during
his recent meeting with President Obama in Beijing, Hu mentioned, “We will continue to act in
a spirit of equality, mutual respect and noninterference in each other’s internal affairs.”
It has been suggested that Russia views a close economic, political and strategic relationship
with China as a viable, ongoing relationship that could mature into a political, economic or
military union similar to the North Atlantic Treaty Organization or the now-defunct Warsaw Pact.
In this new union, China, Iran, Russia, Venezuela and many other non-Western nations would
emerge as a powerful bloc in opposition to the imposition by the West of Western-style
capitalism and democracy. This system is still viewed as chaotic, unstable and uncontrollable
by the Russian government and its people, who still vividly remember the collapse of Russia
and its tumultuous transition to a democratic system.

The prospect of China providing a security buffer against Russia has been the rationale for
mistrust and suspicion between China and Russia. However, the leadership in Russia wants to
strengthen Russia’s ability to choose its own partners in an increasingly globalized society. For
the past twenty years, Russia has always sought recognition from the West as a leading
superpower. However, strong criticism of Russia by presidents George W. Bush and Bill Clinton
created a perception that the United States is an arrogant hegemonist. Unlike China, the
prevailing view among the Russian government is that the United States is seeking domination,
manipulation and isolation of Russia.

The closer relationship being established between China and Russia should encourage the
United States to alter its mindset toward Russia. The United States must support the
emergence of a rapidly growing Russian middle class. Encouraging Russia to participate as a
responsible stakeholder in the global community will help Russia choose and manage its
economic and political relationships wisely.

Ralph E. Winnie, Jr., is the Director of the Eurasian Business Coalition’s China Program.

Ralph Winnie Jr., Contributing Editor's Article on WTO in the Washington Post

http://www.divshare.com/download/18563341-2cb

Russia's accession to the World Trade Organization is closer to being
accomplished than at any time in the turbulent 17 years it has been trying to
join, yet there are still barriers to overcome.

WTO member countries do not want to give Russia a free pass, rather they
want to force Moscow to finally honor commitments it made many years ago
to improve economic cooperation as a market economy. And Russia would
benefit from a more flexible system involving trade of services and foreign
direct investment as a member of the WTO.

In what may be the best news yet, President Barack Obama offered the
Russian Federation his full support and advice in the accession process
during recent talks in Washington, D.C.

Russia agreed to accelerate the adoption of measures that would bring
Russia into conformity with the rules and norms of the WTO. Russia's
finance minister, Aleksei Kudrin, revealed at a news conference in Yalta that
his country had resolved longstanding trade disagreements with the United
States that had been holding up Russian membership. He reiterated that a
formal bid to join the trade body would be ready in two to four months so that
Russia could join the WTO in six months to a year after that period of time.
However, Russia's membership in the WTO is still not guaranteed due to
Russia's tumultuous trade disputes, failure to grant United States access to
poultry and pork and the lack of protection for intellectual property, including
protections for patented pharmaceuticals.

Once Russia joins the WTO, the United States will be required to repeal a
trade restriction (Jackson-Vanik) that was implemented during the Cold War
to urge the Soviet Union to allow emigration of Jews, and has in recent years
proved to be a diplomatic thorn. Even though emigration controls were
eliminated after the collapse of the Soviet Union, the United States has
continued to keep the law on the books to leverage disputes.

American diplomats have gone on record saying that the law will be
repealed, which would give Russia permanent favored trade status, effective
upon Russia's entry into the WTO. However, Congressional repeal is not
assured because of the makeup of the next Congress. These new members
of Congress tend to be staunchly conservative on tax and trade policy and
represent communities in the Midwest and the South, where many jobs have
been lost due to increased global competitiveness and outsourcing.

According to the Council on Foreign Relations, Russia now recognizes the
strong economic role that China plays in the world community and does not
want to be overshadowed by such a global behemoth. Unlike China,
Russia's agricultural subsidies are already low, and Russia has agreed to
open its insurance and banking markets. The Economic Policy Institute
indicated that in 2006 alone, the trade gap with China resulted in the loss of
366,000 jobs in America; those individuals who retained their jobs had their
earnings decreased by roughly $1,400.

Moscow has repeatedly complained that it is being held to a higher standard
by the WTO regarding agriculture and the enforcement of intellectual property
rights compared to other countries, including China.
However, the real obstacle to Russian accession into the WTO is the lack of
mutual trust between Russia and the United States. Russian trade
negotiators fear that Americans will raise new concerns after all previous
outstanding issues have been resolved. Given the tone and the mindset of
some of the new members of Congress, who hail from areas with high
unemployment, such a belief is not without merit.

In 2009, American negotiators were surprised by Putin's assertion that
Russia's customs union with Belarus and Kazakhstan had priority over its
WTO obligations. However, President Dmitry Medvedev has now made it
clear that Russia's entry into the WTO is the top priority. Russia's accession
will be decided politically by its leaders and any technicalities should be
addressed in the coming months.

Ralph E. Winnie, Jr., is the director of the Eurasian Business Coalition's China Program