New deals: are anticipated after a summit between US President Barack Obama and Russia's president Dmitry Medvedev
Obama trip opens Russian deals
US President Barack Obama's visit to Russia has generated over $1.5 billion worth of deals, but a longer term step-change in business between the nations will depend on Moscow boosting the rule of law.
"We need the confidence that things are going to remain stable, that the ground rules are going to remain stable," Samuel Allen, chairman of US farm machinery maker Deere & Company, told reporters while announcing an investment of $500 million into Russia within the next 5 to 7 years.
"I believe in the long run that is what the (Russian) government will try to do but at this point in time things aren't as stable as we would like to see. It makes us hesitant at times," he said.
The summit between Obama and Russia's president, Dmitry Medvedev, will focus on talks about cutting nuclear weapons stores, the supply of weapons to NATO forces in Afghanistan, and on creating a joint commission to improve trade relations.
A breakthrough at these talks would serve as evidence both sides want to "press the reset button" - to use the US government's phrase - on US-Russia relations and help boost bilateral trade, which stood at $36 billion last year.
Joining Deere's new investments in Russia are US soft drink giant Pepsi and aircraft maker Boeing.
In addition to Boeing, John Deere, and Pepsi, executives from US oil majors ExxonMobil, Chevron, ConocoPhillips and aluminium major Alcoa are travelling with Obama.
"If we have success on the geopolitical side of the summit we are going to see much more investments by US companies," Andrew Somers, president of the American Chamber of Commerce in Russia, told Reuters in an interview today.
"We hope that President Medvedev will be able to follow through on his continuous campaign to improve the rule of law. I think this is a single biggest inhibitor to investment by US companies, their concern about the rule of law," he said.
US executives regularly name the weak rule of law, high level of red tape, and corruption as key obstacles for doing business in Russia, and are likely to raise these issues when they meet both presidents tomorrow at a parallel business summit.
US Commerce Secretary Gary Locke will attend the business summit along with Obama and Medvedev, and hold a dinner meeting with American business leaders.