Putin Links ?€?Brave?€™ U.S. Shift to Trade

Prime Minister Vladimir Putin said Friday that Washington’s decision to abandon plans to build a missile defense system in Europe give him hope that the United States would take further, trade-related steps to improve ties.

Moscow is counting on Washington to remove restrictions on the transfer of high technology to Russia and to assist Russia, Kazakhstan and Belarus in joining the World Trade Organization, Putin said at an economic forum in the Black Sea resort of Sochi.

“The latest decision by President Obama … suggests good thoughts, and I very much hope that this very right and brave decision will be followed by others,” Putin said.

Obama abruptly announced Thursday that he would scrap plans by former President George W. Bush to install elements of a missile defense shield in Poland and the Czech Republic. Obama said Sunday that Russia’s complaints about the proposed shield had not influenced his decision. (Story Page 4.)

President Dmitry Medvedev indicated in comments published Friday that Moscow would now be more receptive to U.S. concerns, but he stopped far short of offering to help Washington in its attempt to dissuade Iran from developing a nuclear program. The Bush administration had maintained that the program represented a threat to the United States and its European allies and that the shield was needed to counter it.

“The fact that they are listening to us is an obvious signal that we should also attentively listen to our partners, our American partners,” Medvedev said in an interview with Swiss media.

But Russia will not make “primitive compromises,” he added.

In an interview aired on CNN on Sunday, Medvedev said Russia would not supply Iran with offensive missile systems. (Story, Page 3.)

The military, meanwhile, said Obama’s shift on missile defense meant that it would no longer need to ?­deploy Iskander missiles in the Kaliningrad region next to Poland, as Medvedev had threatened to do on Nov. 4, the day Obama won the U.S. presidential election. “Finally, reason has won over ambitions,” Deputy Defense Minister Vladimir Popovkin said Saturday on Ekho Moskvy radio.

At the Sochi conference, Putin said Obama could go a long way toward further improving ties by abandoning CoCom lists, which banned high-tech exports to the Soviet Union and its allies during the Cold War. CoCom stands for the Coordinating Committee for Multilateral Export Controls created by NATO after World War II.

“This causes damage to Russia’s cooperation with its partners, first of all the United States,” Putin said. “This causes damage to the U.S. businesses as well because it hampers them in developing ties with Russia.”

Putin urged U.S. participants of the Sochi forum to try their best to promote eradicating such “vestiges of the past epoch” as soon as possible. U.S. attendees included David Bonderman, founding partner of TPG, one of the world’s largest private equity firms; General Electric chief executive Jeff Immelt; and John Mack, whose term as CEO of Morgan Stanley expires at the start of 2010.

In addition to the trade barriers that Putin mentioned, Russia has been urging the United States for years to repeal the Jackson-Vanik amendment, Cold War-era legislation that still prevents Russia from obtaining the status of a country that enjoys “normal trade relations” with the United States.

Russia desperately needs investment as it emerges from the economic recession, Putin said. The government will soon begin drafting a crisis-exit strategy that will focus on modernizing the economy by offering investors the “most favorable terms and prospects of growth,” he said. Officials realize that the “era of easy, cheap money is, of course, over” and competition for investment will be “extremely tough,” Putin said.

Foreign investors, meanwhile, have not modified their Russia wish list much over the past decade or more, said Torbjörn Becker, director of Stockholm Institute of Transition Economics, a center for research and policy advice in transition economies. At the top of the list is a corruption-free business environment and a strong, independent legal system, he said.

“I am not sure we will see it, but that’s certainly what we would like to see,” Becker said.

Some of the key industries that will require investment are transportation, energy, telecoms and digital television, Putin said. He talked at more length about the need to manufacture top-of-the-line car parts in Russia, given that some leading global carmakers, including Renault, operate assembly lines here.

“It’s time to make the next step,” he said. “It will be economically viable.”

Renault is already in talks with Russian car parts makers to create a network of suppliers for itself and partners Nissan and AvtoVAZ, Renault’s chief of Eurasia division said earlier this month in an interview with The Moscow Times.

Russia is interested not so much in foreign money as expertise that comes with global investors, Putin said.

Alexandra Odynova contributed to this report.