U.S.-Russia trade not booming
TEXT OF STORY
Stacey Vanek-Smith: And the choice of a new generation is evidently Russia. PepsiCo has announced a plan to invest a billion dollars in Russia over the next three years. It’s part of a major push by Pepsi to expand into developing markets. And the cola is in good company — President Obama begins his trip to Russia this morning. His plane just touched down in Moscow. It’s Obama’s first visit to Russia as president. Nuclear proliferation and arms control are on the agenda. So is the economic relationship between the U.S. and Russia. Marketplace’s Steve Henn has more.
Steve Henn: Clifford Gaddy is an economist and a Russia expert at the Brookings Institution. He says when it comes to trading relations between the U.S. and Russia, there is not a whole lot going on.
Clifford Gaddy: I think it would surprise most people to know how small they are.
The U.S. does more business with the Netherlands, and U.S. firms do roughly twice the business in China in a single month than they do in Russia over an entire year.
Gaddy: At the same time, this also tells us that there’s great potential. There’s great untapped potential.
For example, both the U.S. and Russia could benefit from greater foreign investment in Russia’s oil fields. More Russian oil production would lower global prices while boosting Russian revenue.
But for now, all that seems unlikely. Just three weeks ago, Russia withdrew its long-standing application to join the World Trade Organization. Gaddy believes Russians were fed up that its WTO membership application was bogged down by non-economic issues like its invasion of Georgia.
In Washington, I’m Steve Henn for Marketplace.
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