Scene-Setter for Trip to Russia

SEC. EVANS: Peter, thank you very much. I'm delighted to be here. In fact, I'm honored to be here.

And I'm looking very forward to my trip to Russia. I've -- since January 20th of this year, I've spent a substantial amount of time talking about Russia and ways that we can strengthen commerce between our two countries. I have had several meetings with Russian officials. I have met with Minister German Gref on several occasions. I met him in my office here in D.C. several months ago. Met with him again in Paris a couple of months ago as well. I've met with Deputy Minister Koptev of the aerospace when I was in Paris a few weeks ago. So -- so, I'm very much looking forward to this trip and pursuing the president's vision of strengthening commerce and strengthening the relationship between the United States and Russia.

I will depart tonight. I will meet Secretary O'Neill in London tomorrow. He, as many of you know, has already departed. He spent a couple of days in London. I'm going to meet up with him. We'll fly into Russia tomorrow night. We'll meet there National Security Advisor Condoleezza Rice.

And this trip is just basically a follow-up to the president's commitment earlier this year when he met with President Putin that he would send senior level, cabinet level officials to Russia to pursue this growing commercial relationship, and also to follow-up to the commitment of the presidents, you know, President Bush and President Putin on Sunday. We'll be talking about trade.

The U.S. this last year, or fiscal year 2000, had about $10 billion in trade with Russia. We imported from Russia about 7.4 billion and we exported to Russia about 2.3 billion, so that's about a $4.9 billion trade deficit today. American companies have about slightly over $5 billion invested in Russia -- foreign direct investment from the U.S. in Russia is about $5 billion -- but there's great potential for more if Russia will continue to move forward with some of their reforms that they have initiated over the last couple of years.

We will meet with -- while we're there, we will meet with President Putin. We'll meet with Prime Minister Kasyanov. We'll meet with Minister Gref. We'll meet with Deputy Prime Minister Kudrin, and we will also meet with members of the Duma. We will be visiting a Boeing facility while -- I will be visiting a Boeing facility while I am there. Boeing has had a very strong commitment to Russia and development of commerce in Russia through cooperative programs. They've invested over a billion dollars. We're going to go see their facility there. We're also going to visit a -- (inaudible) -- facility that is an Alaskan company that has a -- has a joint venture with Moscow that's been a very successful joint venture. What they do is they manufacture insulated steel pipe that's used for the heating industry. They have about 400 employees in Russia. And I will also give a speech to the American Chamber of Commerce -- American-Russian -- the AmCham of Russia while I am there.

This is a -- really a -- I think a window of opportunity in Russia. They have certainly -- are beginning to initiate reforms that are market-oriented reforms, free-market oriented reforms, and we want to -- we want to do everything we can to foster that, to introduce and really help them capture the entrepreneurial kind of spirit that's been the genius behind the free enterprise system here in America, and puts particular emphasis on small and medium size enterprises because, as most of you know, that's where the real creation of jobs occurs in our country, and that's the way it occurs in free-market economies. And so, I'll be talking a lot about the great entrepreneurial spirit through small and medium sized businesses that have driven our economy.

Specifically, we will, in terms of steps we are taking, we -- I'll be talking about the Russian and American business dialogue, which will be a cooperative dialogue between the Russian business community and the American business community will join together in an organization that will be called the Russian-American Business Dialogue, with the idea that these businessmen from -- and women -- from both countries will get together and discuss issues that are obstacles for additional commerce and trade and investment, and take those issues to both governments and explain to the governments that, look, these are the obstacles that we see for additional investment and commerce. And I'll -- as I've already done, I'll highlight other successful examples of the U.S.-Russia commercial cooperation.

The -- this is all about a vision of the future, where this -- where we would like to -- where we think we can be helpful in creating the kind of environment and the kind of framework where Russia can draw from its great resources, the most of which are its people. I mean, this tremendous resources of human capital and people, you all know how they have been -- they have been a leader throughout the years, in science, and engineering, and math. And so there's a great human capital resource to draw from there as well as their other natural resources that I think are so important to a vision of the future, which is a vision of a growing economy.

I also think that it's important for us to have a chance to highlight, as we talk about opening up the markets over there, how this fits right into the president's vision of exporting freedom around the world, because when you take a look at economic development, where it leads you to is freedom around the world. Our roles as governments should be to create the environment for the creation of wealth. We can't create the wealth ourselves, the entrepreneurs do that, workers do that. So, we have to -- and that's what we've done so well here in America.

And so we hope that through this strengthening commercial relationship with Russia we can demonstrate to them the greatness of our system, of creating the environment for competition, which leads to innovation, which leads to improved productivity, which leads to economic growth, which leads to more jobs, which leads to higher standard of living, which leads to people demanding the kind of social freedoms and freedoms we enjoy right here in America.

So, in the end it's all about, not only -- it's all about improving the quality of life for people here in America as well as people in Russia. I mean, that's the whole vision of opening up trade around the world is in the end what you're doing is you're improving the quality of life for all people.

Let me stop there and tell you again that I'm very much looking forward to the trip, and I would be delighted to answer any questions that you might have.

MODERATOR: Any questions? Andrei.

Q Sir, my name is Andrei Sitov. I'm with the Russian news agency ITAR/TASS. I wanted to ask you a technical question and a general question.

What will be the criteria for participation in this new American- Russian Business Dialogue? Does any company that wants to participate have a right to make an input there?

And the general question is about the WTO. It seems at least the Russians have made some noises that in the G-8 meeting in Genoa, there was some shift in the Western partners' position in terms of supporting in a more practical way Russia's accession to the WTO, but it is not reflected in any document. So, I wanted to ask if whether you could clarify that issue for us here.

SEC. EVANS: Sure. I guess that's a two-part question, and the first part is the criteria for membership or joining the Russian- American Business Dialogue, and we are working with the Russian- American Business Council and the American-Russian Business Council, and AmCham, and they are getting together to come up with the criteria for membership. But, you know, I think it's very important to note that we would expect this to be very inclusive, and I think that it's important that we put a lot of focus and emphasis on why we think it's necessary for business to talk to business, and for -- on both sides -- for Russian businesses to talk to American businesses, because I think that's where we can really accomplish a lot in terms of giving healthy -- giving good direction to good governments on what we can do to enhance our commercial relationship. So, while it hasn't been laid out yet, we're working with the American-Russian Business Council and AmCham to develop that.

In terms of WTO, we are very supportive of wanting assist in any way we can for Russia's accession into the WTO. What Russia must do is they must meet the rules for accession into WTO. We have a number of working groups that we have dispatched from time to time to Russia to work on various aspects of the issues that relate to accession into the WTO. We will continue that very aggressively, trying to be as helpful and as supportive as we possibly can. We had an individual dispatched to Russia for a six-year period, that his sole purpose was to work with Russia on accomplishing the necessary steps for accession into the WTO. So, I want to, you know, send a very clear signal that we want to be as supportive, and as helpful, and as constructive as we can.

And another important project is -- that comes right from the Department of Commerce is we've got a commercial law development program where we send a team of lawyers to help them lay out -- here are the rules and here are the actions that you need to take to comply with the rules.

So, we've got a number of initiatives that are underway to help with the process, and the, you know, the important message, though, are there are, you know, they're pretty clear rules that everybody has to meet, and there won't be exceptions. And we're not going to -- I mean, the bar is not going to be raised, but the bar is not going to be lowered either. The bar is going to be the same for everybody. And -- but do we want to be as constructive and helpful as we possibly can? You bet we do. And we're very anxious for Russia to meet the rules and requirements of WTO accession.

Q (Inaudible) -- Isvestia. Sir, maybe you have already partly responded to this question, but I still, I am interested in asking this question. The U.S. administration has been accused by Russian officials of taking discrimination measures against Russian steel and textiles. What would be your answer if Russian government officials still persist in their opinion during your talks in Moscow?

And another question, why -- what is the reason why has been postponed the visit of a big group of U.S. businessmen to Moscow?

SEC. EVANS: In terms of discrimination in steel and textiles, let me tell you that, you know, there's one fundamental principle that I feel needs to be a part of free trade an opening trade around the world, and that is a level playing field. Everybody needs to feel like -- and not only feel like -- I mean, everybody needs to play by the same set of rules. And that's why the rules in WTO are so important, and it's so important that we be consistent in how those rules are applied. There just, you know, needs to be clear consistency and equality in terms of the applying the rules of the WTO.

And then as a principle of opening up trade around the world, we have to be able to tell workers and businesses all around the world that as we open up the world to more competition, that we're playing by the same rules. And so, when we see situations here in America that are inconsistent with that principle, where we see that we feel like other companies in other countries are being subsidized and there are other discriminatory practices that would affect our workers and our businesses and make the playing field unlevel, then we're going to take action. I mean -- and let me say that all of the action, though, we take will be WTO consistent. I mean, we're not going to take any action -- and that action that we have taken in the past has been WTO consistent.

So, it's not a matter of, you know, discriminating against one, you know, one country or another. It's a matter that there are a set of rules out there that help govern trade, and those are set by the WTO. And we're going to take steps along the way to protect our own industries and our own workers against subsidies or other market- distorting practices, and only in that kind of way, though. We just -- we want competition, but we want to make sure the playing field is level.

MODERATOR: We have time for one more quick question.

Q (Inaudible.)

SEC. EVANS: Baker Hughes -- I'm sorry. I don't know. I'm not -- I'm not familiar with that at all. I apologize for not following up on that.

MODERATOR: We have time for one more quick question. This gentleman had his hand up first. Okay -- (inaudible) --

Q Parasuram, with Press Trust of India. In terms of progress toward the free market and democracy, on a scale of 1 to 10 -- 1 being the lowest and 10 being the highest -- where do you place Russia?

SEC. EVANS: Well, somewhere on the scale. (Laughter.) You know -- look, the important thing is the direction, and the direction is positive. The direction is they are taking steps to pass laws that are moving them toward being compliant with the rules of WTO and free market economies -- you know, through the tax laws, through private property ownership. I mean, it's -- you know, they're continuing to move along the road of, you know, more transparency. You know, these are all good, you know, good governance. I mean, these are all, you know, important issues that need to be dealt with, and they're dealing with them.

So, rather than placing them on the scale, just let me tell you the direction is positive and the direction is good. And I'm very optimistic that in the next several years I'll be able to come back here and tell you that Russia has created the environment for opening up commerce and their economy and that we'll be talking about foreign direct investments into Russia that are far in excess of what it is today, of about $10 billion, and the trade in and out of Russia will -- even between us and the -- between Russia and the United States will be far in excess of the $10 billion that we had in trade this last year.

You know, the other, frankly, final point, too, I want to be able to say years from now -- I noticed -- Census told me that we have 726 U.S. companies that were involved in trade exported to Russia in the first five months of this year, and so those are other numbers that we're going to be watching very closely, because I think it's important to watch -- are the small and medium size enterprises really getting engaged in commerce with Russia, because I think there's a spirit there that sends a message to them that will be very helpful and beneficial. So, it's not only just kind of the total dollar amounts, but it's also, you know, how many of the small and medium size enterprises that can show others around the world how they are such great generators of jobs and prosperity -- are those companies really engaged? So, that's something else we'll be watching closely.

Peter, again, thank you very much. Appreciate you all -- delighted to be here.

Q Thank you, Secretary Evans. Have a good trip.

SEC. EVANS: Thank you.