U.S.-Russia Summit Priorities: The Strategic Framework, a Nuclear Arms Agreement, and Trade

On the Summit Agenda

At the summit meetings in St. Petersburg and Moscow on May 23-26 and at the NATO-Russia summit in Rome on May 28, President Bush and President Putin will focus on matters of security and economic policies. In Moscow, they will sign a formal treaty that calls for deep cuts in nuclear arsenals on both sides over the next 10 years. Both leaders are committed to ending the legacy of the Cold War by reducing the strategic nuclear arsenals of their countries to around 1,700 to 2,200 deliverable warheads each. Such a commitment will also be required in cooperative efforts to reduce the threat posed by the proliferation of weapons of mass destruction (WMD), to increase security in regions of common interest, and to increase trade to strengthen economies.

The treaty to reduce U.S. and Russian offensive nuclear arsenals is compatible with currently projected U.S. security requirements. These requirements, however, could change with little warning. As a result, reductions should proceed cautiously and the process should permit flexibility. The treaty allows flexibility by limiting its duration to 10 years, by pacing the reductions within the 10-year period, and by allowing either party to withdraw from the treaty with three months' notice. Another welcome sign of this flexibility is the agreement not to require the destruction of the warheads or to impose limitations on missile defenses.

Specifically, during his summit meetings with President Putin, President Bush should:

• Ask for Russia's support for removing Saddam Hussein and his regime from power. For Russia, the issues in Iraq are primarily the Soviet-era debt of $11 billion to $13 billion for arms sales during the Iran-Iraq war and how the oil deals secured by Russian companies in Iraq (worth $30 billion in cash flow for the life of the projects) would be grandfathered in under a new regime. In addition, Russia is concerned about the territorial integrity of Iraq. President Bush could secure Russia's active diplomatic and military participation in an operation against Baghdad by guaranteeing that such concerns would be addressed in the post-Saddam Iraq in a manner that is satisfactory to Russia.3
• Encourage Moscow to terminate Russian sales of conventional weapons to Iran and technological cooperation to produce WMD. In 2001, Russia and Iran signed a $300 million a year, multi-year arms export agreement, making Iran the third largest customer for Russian weapons after India and China. Moscow is also building two nuclear reactors at Bushehr, from which the precursors to nuclear bomb fissile material could be obtained, and is selling sophisticated anti-ship missiles and other destabilizing weapons to Iran.4

  On May 6, Under Secretary of State John Bolton called for the United States and Russia to sign a political declaration on the New Strategic Framework that would cover not just strategic offense and defense systems, but also nonproliferation and counterproliferation.5 Such a framework should promote cooperation to prevent Iran from becoming a nuclear state armed with ballistic missiles. The Administration should be ready to offer an economic quid pro quo for Russia's actions, such as participation in building the components of ballistic missile defense systems and expansion of civilian space launch quotas.

• Reject any limitations on strategic defenses. Although the treaty to reduce strategic nuclear arms does not include a provision limiting missile defense programs, the Russians may seek such limitations through other declarations to be issued during the summit. President Bush, as he has in the past, should continue to resist Russian pressure to limit missile defenses. According to the Nuclear Posture Review (NPR), strategic defenses--which include missile defenses--are a necessary leg of the new strategic triad that includes offensive strategic forces and responsive forces. Now that the 1972 Anti-Ballistic Missile (ABM) Treaty with the former Soviet Union is scheduled to lapse in mid-June, nothing should reimpose its limitations on missile defense.
  
• Move forward with NATO-Russia cooperation. On May 28, NATO and Russia will sign an agreement to establish the NATO-Russia Council. This agreement should allow for joint development of policy and the planning of mutual activities in such areas as the war on terrorism; operations against terrorist organizations and their financial supporters; nonproliferation and WMD security; special forces interoperability; educational exchanges between officers on all levels; peacekeeping operations; and comprehensive military reform,6 which President Putin and Defense Minister Sergey Ivanov would welcome.

  In the past, the forum provided by the 1997 Permanent Joint Council often turned into a venue for Moscow to air its frustrations with NATO actions, such as the Balkans operations.7 Today, the joint NATO-Russia peacekeeping activities in that region demonstrate how these two sides can cooperate. Top U.S. generals, such as Supreme Allied Commander Europe General Joseph Ralston8 and Commander in Chief of Central Command (CENTCOM) General Tommy Franks, routinely praise Russia's cooperation with the United States and NATO.9 The NATO-Russia Council should be seen as a first step on the road to greater security integration between Russia and the North Atlantic alliance. The President also should invite President Putin to address the NATO summit in Prague in November.

• Encourage Russia to expand its energy sales in the global market. Russia could increase energy sales significantly by enhancing corporate governance transparency and shareholder rights for Western investors. In addition, production could be increased by including 100 new oil and gas fields in the Production Sharing Agreement (PSA) legislation, which allows Western oil companies to be compensated by drawing oil for sale from the jointly developed fields. U.S. companies need assurances that their investments in Russian fields and infrastructure are secure. President Bush should ask Putin to support guarantees for Western companies through expanded PSA legislation and to ensure its passage in the Duma.

  Russia exports over 1.8 billion barrels of oil and 6.7 billion cubic feet of natural gas per year. It is the world's largest exporter of natural gas and second largest exporter of oil.10 Together with the countries of Eurasia, it could catch up with Saudi Arabia as a leading oil exporter by 2010.11 U.S. export development agencies, such as the Overseas Private Investment Corporation (OPIC), the Export-Import Bank, and the international financial institutions, could assist foreign investors by insisting that the rule of law be honored and contracts upheld. A boost in Russia's energy exports also would provide its European and Far Eastern customers with additional energy security in the event that OPEC continues its policy of high prices and production cuts.

• Express support for the lifting of U.S. barriers to trade with Russia. The Administration supports Russia's economic integration with the West, including its membership in the World Trade Organization (WTO). President Putin has declared that Russia will not require any special deals from the WTO, so standard WTO criteria for membership should apply. President Bush should declare U.S. support for Russia's accession in 2004, provided the negotiations in all sectors are completed successfully.

  The U.S. statute known as the Jackson-Vanik Amendment, which denies Russia most favored nation status, is a relic of the Cold War. It was passed in 1974 when the Soviet Union severely limited emigration. Congress suspended application of the amendment after the Soviet Union collapsed. At the Russia summit, President Bush should express his support for a permanent lifting of the Jackson-Vanik restrictions, which Congress could accomplish by attaching an amendment to trade legislation.

Conclusion

The forthcoming U.S.-Russia summits offer both countries a unique opportunity to launch a strategic partnership that would assure greater security in the 21st century. At the summit meetings, both President Bush and President Putin should focus on casting off the baggage that has hampered U.S.-Russia relations in the past, such as Moscow's ties with Iran and Iraq and other states that sponsor terrorism.

The two leaders will put to rest the legacy of the Cold War by signing a strategic treaty to reduce their nuclear arsenals. Most important, they should expand joint actions in the war on terrorism, as well as establish goals for NATO-Russian cooperation and support policies that further integrate Russia into the global market.

Ariel Cohen, Ph.D. is Research Fellow in Russian and Eurasian Studies, and Baker Spring is F. M. Kirby Research Fellow in National Security Policy, in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.