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. Last Updated: 07/27/2016

Donohue: Real Market on Way

APU.S. Chamber of Commerce head Thomas Donohue told reporters that the Jackson-Vanik amendment should be scrapped.
After three days of meetings with top government officials and entrepreneurs, U.S. Chamber of Commerce head Thomas Donohue said Wednesday that Russia is on the right track toward developing a real economy and that he would pass on an upbeat assessment to President George W. Bush.

Donohue, who is preparing a report for Bush ahead of his summit with President Vladimir Putin in Moscow next month, also said the Jackson-Vanik amendment should be scrapped to allow greater economic cooperation between Russia and the United States.

"You can see the emergence of a vibrant entrepreneurial business sector," he said at a news conference. "I am impressed by the serious progress toward a real market economy in Russia and an implementation of reform policies in your economy.

"The improvements are real and substantial," he added.

Donohue said that he saw a great opportunity to expand trade and investment between the two countries, suggesting immediately that the Jackson-Vanik amendment of the Trade Act of 1974 be discarded and Russia be designated as "a market economy for trade purposes."

Since the early 1990s, Russia has been granted normal trade relations through White House waivers. Russia resents the review process that accompanies the waivers and wants normality of trade relations to be permanent.

"These are vestiges of the past, and the Chamber of Commerce of the United States will press hard for immediate action on these issues," Donohue said.

For its part, Russia should stay on a course of economic reform and address trade barriers such as high tariffs, subsidies and excessive regulations, he said. Likewise, steps should be taken to strengthen intellectual property rights and the courts, he said.

The U.S. Chamber of Commerce, which represents 650 companies in Russia, will throw all its weight behind helping Russia enter the World Trade Organization, he said.

"Being in the WTO will give Russia a forum to defend its economic interests and will help the nation complete its transformation to a market economy," Donohue said.

"I believe that it is in our mutual interest to move ahead quickly to achieve this as soon as possible."

He also said that the U.S. Chamber of Commerce has agreed with the Russian Chamber of Commerce and its head, former Prime Minister Yevgeny Primakov, to set up an Internet service connecting small- and medium-sized business in both countries.

To keep ties strong, both chambers will hold regular meetings.

"I will personally report to our major corporate members on improving investment and business opportunities that I have found in Russia," Donohue said.

While he was mostly upbeat, he conceded that there remain several road blocks toward closer cooperation -- particularly, steel and poultry.

The United States put quotas on some Russian steel imports in March, and Russia banned U.S. poultry about the same time.

The poultry ban lifted late this month, and Donohue said he thought the steel issue would be resolved shortly.

"Perhaps we can send chicken in steel containers," Donohue joked.

"On a serious note," he added, "we will always have this or that trade disagreement. We cannot let it sidetrack from a significant increase in investment and trade."