By Amanda Lahan, Account Manager, The PBN Company, Washington, DC

The history of Russia’s application for World Trade Organization (WTO) membership was already long and complicated when, in June this year, Russia announced it would withdraw from WTO negotiations and focus on first forming a Customs Union with Belarus and Kazakhstan. However, after five weeks in which Russia sought to convince the international community that they had no intention of joining the WTO independently, the leadership seems to have reversed course again. In President Dmitry Medvedev’s words, joining the WTO as a Customs Union would be “nice, but rather problematic.”

So why the 180-degree turn so soon after the first reversal? It seems that U.S. and EU officials – intentionally or otherwise – called their bluff. The Russians stated that once the Customs Union was in place, expected to happen by January 1, 2010, they would immediately begin WTO negotiations to enter as a union. Previous WTO negotiation agreements would, they claimed, stand for the Customs Union as a whole. U.S. and EU officials, however, pointed out that joining the WTO as a Customs Union would not be nearly as easy as the Russians thought it would be. U.S. Commerce Secretary Gary Locke stated that the joint bid would be “unworkable, unprecedented and would only delay matters.” Pascal Lamy, head of the WTO, suggested that the Customs Union may not have the “competence to negotiate these issues.”

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By Roman Kolosovskiy, Intern, The PBN Company, Moscow

President Obama’s trip to Moscow was billed as a milestone in US-Russia relations - there would be none of the Bush-era soul searching, but rather a chance to find pragmatic, common ground on pressing global issues like nuclear arms and Iran. Meetings were held and hands were shaken, but what is clear now that the dust has settled is that the US president has not aroused the same level of “Obamania” behind him in Moscow as he has elsewhere in the world.

As the Russian Foreign Ministry spokesman Andrei Nesterenko said in a television interview, the summit was “groundbreaking” in that the United States and Russia “managed to stop the degradation of our relations,” which is a subtle, but key distinction from a wholesale “reset.”

Nevertheless, Presidents Obama and Medvedev had a constructive meeting. The leaders seem to have hit it off in a way that bodes well for a positive working relationship, with Medvedev telling Interfax that he “like[s] talking with Barack.” The tone of the conversation was honest and went beyond exchanging pleasantries, which shows that the two leaders, who share a strong legal background, are serious about establishing a constructive bilateral relationship.

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By Brandon Zack, Intern, The PBN Company, Washington, DC

President Obama’s visit to Moscow was billed as a “resetting” of diplomatic relations between the US and Russia, however his visit also provided a shot in the arm to economic relations which have flat-lined in recent years.

Before the trip, Obama highlighted that annual trade between the two countries totals $36 billion - about one percent of US trade with the rest of the world and equivalent to the US’s trade with Thailand, a country with less than half of Russia’s population. “Surely we can do better,” the President said. And back came the familiar refrain “Yes we can” from the CEOs of America companies who accompanied Obama to Moscow.

A number of US companies that are existing investors in Russia reaffirmed their commitment and announced extra funding for significant expansion plans. PepsiCo’s deal was the largest - a $1 billion investment over the next three years as well as the opening of a bottling plant outside Moscow, which will be its largest plant worldwide. Pepsi is a veteran of the Russian market. Soviet Premier Nikita Khrushchev tried Pepsi for the first time in his 1959 Moscow “kitchen debate” with then Vice President Richard Nixon. Later, in 1973, Pepsi was named the official soft drink supplier to the Soviet Union in a détente agreement that enabled the USSR to export Stolichnaya vodka to the US. Pepsi currently has seven plants operating in Russia and has invested some $3 billion over the last ten years, including the acquisition of leading Russian juice maker Lebedyansky in 2008.

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By Adrian Erlinger, Account Manager, The PBN Company, Washington

As world leaders representing the G-20 gather in London today to hammer out a global response to the economic crisis, US President Barack Obama met Russian counterpart Dmitry Medvedev face-to-face for the first time.

While two declarations were signed — one on strategic weapons and another on general bilateral relations — major breakthroughs will be saved for the next presidential meeting, which both leaders agreed would take place in July. In the meantime, both countries will strive to further reduce weapons stockpiles through a new Strategic Arms Reduction Treaty, set to expire in December.

Noting the “drifting” and “degrading” in ties over the past few years, both Obama and Medvedev heralded the beginning of “constructive dialogue” to advance “mutual interest” in reducing nuclear weapons stockpiles, advancing nonproliferation efforts, curbing terrorism and curing the anemic global economy.

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