From CNN Foreign Affairs Correspondent Jill Dougherty
Vladivostok, the site of this year’s Asia-Pacific Economic Cooperation forum, is more than 5,000 miles from Moscow, seven times zones to the east. The word means “Ruler of the East” and the Russian government wants to make good on the promise of that name.
“When the decision was made that we would hold the chairmanship several years ago we thought that it would give a general boost to the whole region of Far East Russia,” says Mikhail Kalugin, Acting Head of Economic Section at the Russian Embassy in Washington.
The Kremlin poured more than $20 billion into transforming Vladivostok for the summit. “Not just renovating the venue where this summit will be held,” Kalugin says, “but we’ve invested lots of money in our infrastructure, in the city of Vladivostok and the Primorsky Krai region, including a new airport terminal, a railway from airport to the city, major improvements to the city infrastructure, new bridges, including bridge to Russky Island where the summit will be held.”
“For Russia it’s a very important decision to put more weight in our efforts in Asia-Pacific because, historically, economically and demographically and politically Russia has been a European nation and most of our trade is with the European Union and the major population centers are in the European part of Russia,” the Russian Embassy’s Senior Counselor, Alexey Y. Drobinin says. “So it’s a tremendously important decision for us to boost our presence in Asia-Pacific and to engage more actively in integration efforts there.”
Drobinin points out that, just three months ago, Prime Minister Dmitry Medvedev created a new ministry in the government for the development of Russia’s Far East.
Moscow also is hoping the APEC summit will jump-start investment in Russia, especially now that it has joined the World Trade Organization.
"The main result will be how much investment Russia will receive after the meeting and how the other economies will be ready to accept Russian investment," First Deputy Prime Minister Igor Shuvalov told reporters before the summit began.
U.S. Secretary of State Hillary Clinton congratulated Russia on joining the WTO and said it could pay off big for Moscow.
“The World Bank, for example, estimates that by effectively implementing its WTO commitments, Russia could increase its gross domestic product by about 3 percent in the medium term, and as much as 11 percent over the long run,” she said. “So it pays to join the rules-based global trading system. And Russia’s trading partners stand to benefit as well. We believe American exports to Russia could double or even triple.”
The State Department is working closely with Congress to end the Cold-War-era Jackson-Vanik amendment and grant Russia Permanent Normalized Trade Relations. Clinton said she is hoping Congress will pass the legislation this month.
The Jackson-Vanik amendment was passed in 1974 as a way of pressuring Russia to allow Soviet Jews to emigrate. With the collapse of the Soviet Union, that was no longer an issue, but legislators kept the amendment on the books to pressure Russia on other issues.
The United States has waived it every year since 1994, but it still violates World Trade Organization rules requiring members of the body to give one another permanent normal trade relations.
Russia finally entered the WTO this summer, raising the stakes for the United States to end a measure that critics warn could end up costing it business.
For the United States, too, APEC is crucial for economic growth. “APEC’s 21-member economies comprise nearly three billion consumers,” a senior State Department official told reporters traveling with Clinton. “They account for 44 percent of world trade. They represent 56 percent of the global economic output. That was $39 trillion in 2011, and six of America’s ten largest trading partners are in APEC.”
That’s a key factor in President Barack Obama’s “pivot” to Asia. “After an extended period in which the United States had to focus a great deal of attention and resources on regions and conflicts elsewhere,” Clinton said at the summit, “we are now making substantially increased investments in the Asia-Pacific.”
Obama set a goal of doubling U.S. exports worldwide by the end of 2014 and Clinton cited what she called “great gains in APEC.”
Between 2009 and 2011 U.S. exports to other APEC economies increased by nearly 45%, she said, and they’re up another 7.5% in the first half of 2012.
“But we can still go further. American companies are eager to invest more in Asia. And when they confront unfair regulations, or if they just want advice on local customs, they come to us at the State Department. And we go to bat for them.”
The U.S. and Russia, both Pacific powers, are looking East. As Clinton told the leaders gathering in Vladivostok: “Our growing economic interdependence is part of why I often say that much of the history of the 21st century will be written in Asia.”