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3 Jul, 2009 12:48

Business on the menu as President Obama comes to Moscow

Dmitry Medvedev will welcome Barack Obama on his first Presidential visit to Russia, with strategic issues likely to dominate the agenda but economic ties also looking to gain a boost.

Russia- U.S. trade has grown rapidly in recent years despite some strains in the relationship. The U.S. imports – mainly petroleum goods – reached $27 billion in 2008. That’s 5 times more than in 1998, but it remains minor in percentage terms for both nations.

The biggest U.S. exports to Russia are meat and poultry – doubling in 5 years, to reach $1.4 billion in 2008. But the Swine flu outbreak in 2009 forced Russia to ban import of meat from some parts of the United States. Experts say there is plenty of scope for broadening the scope of bilateral trade and investment.

President Obama will visit Moscow’s New Economic School, where he will address up to a thousand guests, at a graduation ceremony, on crisis management and future economic growth. The New Economic School’s Sergey Guriev believes it’s a chance to move beyond issues of the past and promote better business ties.

“Both countries still suffer from cold war legacy. There is definitely huge potential for cooperation between Russian and American companies . The easiest way forward is to conclude WTO negotiations and promote FDI in Russia, both in the real sector and financial sector.”

Both leaders will attend a business forum in Moscow where they will be addressed by business leaders from the Russian Union of Industrialists and Entrepreneurs and the American Chamber of Commerce. The key issues for business leaders at the forum will be anti crisis measures and capital flows, which have fallen significantly over the last year.

The two leaders also likely to discuss Russia's WTO accession, which has been put on hold by Prime Minister Putin's decision to enter into a customs union with Kazakhstan and Belarus, with Presidential Aide Arkady Dvorkovich also expecting further discussion of anti crisis measures discussed at the G20 meeting earlier this year.

“We expect further progress concerning the question that were already discussed by Russia and American leaders during their previous talk in the frames of G20 London meetings. This will include weapon talks as well as economic topics.”

Energy is also likely to be on the agenda, with America likely to press for more diversification of supplies out of Russia. That's likely to be hard for Obama to sell to Russia, a week after it recently wrapped up deals to buy gas supplies from Turkmenistan and Azerbaijan.