US-Russia Rift Widening, despite Pact ; Bush and Putin Finalized a Surprise Deal Sunday, Removing the Chief Obstacle to Russia's WTO Membership

Article excerpt

Divided government in Washington could prove therapeutic for the troubled US-Russia relationship.

So say some Russian experts, who believe that Democrats' victory in midterm elections this month compelled President George W. Bush to draw on the support of Russian leader Vladimir Putin.

The two finalized a surprise deal Sunday that effectively ended 12 years of US objections to Russian membership in the World Trade Organization (WTO), thus removing the chief obstacle to Russia's entrance into the group.

"The only thing that has prevented a full slide into a new cold war was the personal relationship between Bush and Putin," says Viktor Kremeniuk, deputy director of the official Institute of USA- Canada Studies in Moscow. "Now, as a result of an election that has greatly weakened Bush, he is reaching out to Putin for help on foreign policy issues such as Iran, using the only carrot he has: WTO membership."

But despite warm personal relations between Bush and Putin, and a temporary boost in mutual ties following 9/11, Russia and the US have since drifted apart over global security issues such as the war in Iraq and how to handle the challenge of Iran's nuclear program.

Last year, a regional organization led by Russia and China demanded the ouster of US military bases from former Soviet Central Asia, while the Western military alliance, NATO, has stepped up its contacts with Russian neighbors such as Georgia and Ukraine.

In addition, American criticism of Putin's internal policies, and Russia's alleged use of energy blackmail to pressure Westward- leaning neighbors, has grown much sharper over the past year.

Amid growing dissension over these concerns, the 800-page trade pact signed Sunday had appeared headed for permanent back-burner status as recently as July, when Bush and Mr. Putin failed to endorse it at the Group of Eight summit in St. Petersburg.

If ratified by the US Congress - a big if, given Democrats' traditional opposition to free-trade agreements - and accepted by the WTO's 150 members, the deal will herald Russia's arrival as a full-fledged member of the global market after 15 years of being regarded as a stumbling post-Soviet "transitional" economy.

"This will be the most important legacy of Putin's entire presidency," says Yaroslav Lisovolik, chief economist for Deutsche UFG, a member of the Deutsche Bank Group, in Moscow. "It really says that Russia is heading toward a more rational, market-based and competition-oriented policy, no matter what other signals may be in the air."

Under the accord, Russia pledges to pry open formerly protected areas of its economy, such as financial services, automobiles, aviation, and computer technology, in return for greater access for Russian goods to world markets.

Moscow has also committed to a crackdown on corruption, money laundering, and intellectual property theft, which cost US companies an estimated $1.8 billion in 2005.

Though the Kremlin-dominated State Duma is expected to easily ratify the deal, critics are concerned that it will inflict more short-term pain than can be justified by hypothetical long-range gains. …