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U.S. promises favorable conditions for Russian investors

Posted by alfied on July 3, 2008

MOSCOW, June 30 (RIA Novosti) – The United States intends to set favorable conditions for investment, including from Russia, the U.S. treasury secretary said Monday in Moscow.

At a meeting with the Russian prime minister, Henry Paulson told Vladimir Putin that the U.S. welcomed investment, including from state sources, and would do everything to make sure the investment flows continue.

Paulson said investing in the U.S. should be attractive to Russia’s “sovereign fund”, but Putin told him Russia does not yet have a sovereign investment fund, although the authorities are ready to consider setting up one.

Paulson arrived in Moscow on Sunday for his first visit to Russia since being appointed to the post some two years ago.

The U.S. treasury secretary also said Russia’s joining the World Trade Organization is an important and necessary step.

“I would very much like to see Russia’s accession to the WTO. We’re making progress on Russian accession,” Paulson said on Ekho Moskvy radio.

Russia, the only major economy outside the WTO, has been seeking membership in the organization since 1993.

EU Trade Commissioner Peter Mandelson said earlier in June that Russia would become a WTO member by November 2009, and could complete accession talks later this year. But he warned that although Russia had already concluded 90% of the negotiations necessary, it still had a number of issues to settle.

For example, Georgia, which became a WTO member in 2000, is threatening to block Russia’s accession to the WTO unless Moscow halts support for its breakaway regions of Abkhazia and South Ossetia.

Another stumbling block is the Jackson-Vanik amendment, which restricts Russian-U.S. trade relations. Paulson said he did not know whether it would be lifted in the next six months.

“It will not be easy. There will be opposition in the Congress,” the treasury secretary said.

The Jackson-Vanik amendment was passed in 1974 and restricted trade with the Soviet Union over human rights violations. The amendment, which still applies to Russia, puts restrictions on Russian-American trade relations but Russia’s WTO accession would require the amendment be lifted.

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