Russia pursued a policy of sustainable development of Russian-U.S. relations in key areas. Interaction with the United States was based on a pragmatic and comprehensive approach, which combined the advancement of cooperation in the spheres of concurrent interests and firmness in upholding our positions in the areas of disagreement, without sliding into confrontation.

A critical element of Russia-U.S. interaction is a high-level dialogue. The presidential elections in Russia and the United States predetermined for both sides the goal of guaranteeing the continuity of contacts with a view to preserving the positive gains made in our relations as a result of joint work over the last years.

Three meetings between the Presidents of the two countries took place in 2008. President Vladimir Putin and President George Bush met on April 5-6 in Sochi (President-elect Dmitry Medvedev and President George Bush also held a discussion there). Presidents Dmitry Medvedev and George Bush met on July 7 on the sidelines of the G8 summit in Toyako (Japan) and the APEC summit on November 22 in Lima (Peru).

The summit in Sochi on April 6 included the signing of Russia-U.S. Strategic Framework Declaration, which reflects the positive results of cooperation between our countries on a wide range of issues, outlines areas of concern where the approaches of the two sides differ, as well as confirms the principles for resolving those differences.

In his statements regarding future bilateral cooperation, President-elect Barack Obama underscored that he would like to build our relationship on the basis of pragmatism. The Russian side supported such an approach, and on November 5, during the first telephone conversation between President Dmitry Medvedev and President Barack Obama, a basic agreement was reached to hold a summit meeting in order to proceed with joint work in the spirit of positive continuity without any delays.

The practice of regular consultations between the foreign ministries continued, embracing the entire range of Russian-U.S. relations and current international problems. The meetings between Foreign Minister Sergey Lavrov and Secretary of State Condoleezza Rice were held on January 22 in Berlin on the sidelines of the “P-5+1” ministerial meeting on Iran’s nuclear program, on April 22 in Al Kuwait within the framework of the international meeting on Iraq, on May 1 in London on the sidelines of the Coordinating Committee on Palestine and Middle East Quartet meetings, on June 24 in Berlin during the Conference on Palestinian Civil Security and Rule of Law, on July 23 in Singapore within the framework of the ASEAN Forum, on September 24 in New York on the sidelines of the 63^rd session of the United Nations General Assembly, on November 8 in Sharm el-Sheikh on the sidelines of the meeting of the Middle East Quartet. Besides, State Secretary Condoleezza Rice and Defense Secretary Robert Gates visited Moscow on March 17-18 to address key strategic security issues at the level of head of foreign policy and defense ministries in the “2+2” format.

The year was characterized by the dialogue being carried out amid growing contradictions in U.S. foreign policy, which combined U.S. interest in maintaining cooperation with Russia on key issues with the perception of Russia in the light of its unilateral approaches and an increasing slant towards “selective cooperation with selective deterrence”.

Such an approach clearly manifested itself in the context of the Caucasus crisis in August, provoked by Georgia’s aggression against South Ossetia. Washington’s actions resulted in the full support for Tbilisi, sharply escalated anti-Russian rhetoric, attempts to instigate collective Western pressure on Russia, suspending the work of the Russia-NATO Council, restriction on cooperation with Russia in the G8, and our progress towards WTO and OECD accession, disregard for Russian foreign-policy initiatives (in particular, concerning the Treaty on European Security), attempts to militarize the Black Sea and Central Asia, active lobbying for energy supply routes from the Caspian region bypassing Russia.

In such conditions, Russia’s main efforts were aimed at neutralizing the abovementioned negative manifestations, while maintaining the bilateral relations in line with the principals of Sochi declaration, preserving their positive continuity in order to make a fresh start with President Barack Obama’s “team”. Such
a policy produced positive results: in the face of Russia’s fundamental position regarding the settlement of Georgia-Ossetia conflict, the Administration of President George Bush began to gradually depart from its previously introduced “freeze” on contacts with Russia as part of the established bilateral mechanisms.

Military and political issues came to the forefront in the Russia-U.S. dialogue. The attention was focused on maintaining strategic stability and international security, as well as on non-proliferation. Comprehensive discussions of these issues were held during consultations between deputy heads of Russian and U.S. foreign ministries (five rounds altogether).

Work with United States aimed at concluding a follow-on treaty to START after it expiration in December 2009 continued. It is planned that, as stipulated in the Sochi Declaration, the sides will reduce their strategic offensive weapons to the minimal possible level corresponding to their national security requirements and allied obligations. It has been agreed to draft a legally binding agreement to replace START.

Anti-ballistic missile defense (ABM) remained one of the most pressing issues in the Russia-U.S. strategic dialogue. Russia consistently opposed U.S. plans to deploy elements of its anti-missile defense system in Europe and reiterated its alternative solution put forward by President Vladimir Putin in 2007. At the same time, while demonstrating a constructive approach, the Russian side continued to discuss U.S.-proposed transparency and trust-building measures regarding the potential missile defense facilities, assuming that, if agreed and implemented, such measures could be important and useful in terms of addressing Russia’s concerns. In addition, Russia’s President Dmitry Medvedev in his Annual Address to the Federal Assembly on November 5 outlined a number of military and technical countermeasures to be taken should the United States install its missile defense sites in Poland and the Czech Republic.

The United States effectively removed itself from advancing a joint Russia-U.S. initiative to make universal the Treaty to Eliminate Medium Range and Shorter-Range Missiles of 1987. Russia-U.S. dialogue on military space did not proceed properly either, since the United States avoided a meaningful discussion of weapons deployment in outer space, which is due to the new conceptual guidelines of the U.S. Administration aimed at providing Washington a full freedom of action in outer space, including the use of near-Earth space for military purposes.

At the same, Russian-American cooperation in non-proliferation was developing actively. The implementation of the Global Initiative to Combat Acts of Nuclear Terrorism launched by Russia and the United States in 2006 in Saint-Petersburg was successfully moving forward.

In the regional non-proliferation context, the parties continued to focus on the Iranian nuclear program and the Korean Peninsula nuclear problem. However, dialogue on those issues was complicated by an introduction of U.S. sanctions against Russian companies for their cooperation with Iran (as well as with a number of other countries) in the sphere of military and technical cooperation.

Bilateral cooperation with the United States in the sphere of peaceful atom was developing. On May 6, an intergovernmental Agreement on Cooperation in the Peaceful Use of Nuclear Energy was signed in Moscow. On May 12, U.S. President George Bush submitted it for ratification to the Congress. However, on September 8, it was withdrawn under the pretext of “Russia’s actions in the Caucasus”.

Implementation of the “Statement on Joint Action in Nuclear Energy and Nonproliferation”, made by Russian and U.S. Presidents in July 2007, included elaboration of the initiatives to create global infrastructure, which would allow nations to develop peaceful nuclear energy without creating sensitive elements of the nuclear fuel cycle.

Interaction with the United States on the international issues was carried out with due account for our common responsibility for global and regional security, in the interests of providing a favorable foreign policy environment for Russia and with a view to supporting interaction on the entire agenda of our relations.

Diplomatic coordination was conducted as part of a manifold dialogue network composed of the United Nations, G-8, G-20 and other multilateral and bilateral fora, including standing advisory mechanisms.

U.S.-Russia Working Group on Counterterrorism (CTWG) met for its 16^th session on June 19-20 in Moscow to update current and initiate new areas of cooperation in countering terrorist threats.

Situation in the post-Soviet republics was actively discussed at the level of foreign ministries. Positive momentum was maintained in the discussions on the Nagarno-Karabakh Settlement as part of the OSCE Minsk Group, as well as on Transdniestria in the “5+2” format.

Cooperation on the Middle East Settlement was pursued on mutually complimentary tracks, primarily within the framework of the Quartet of international mediators. Attention was focused on the implementation of goals outlined during the International Conference on the Middle East Settlement in November 2007 in Annapolis aimed at re-energizing the Israeli-Palestinian negotiations.

Coordination to ensure long-term military, political and economic stabilization in Iraq and Afghanistan was continued. The Bucharest Summit of the Russia-NATO Council reached an agreement on the non-military transit through Russian territory.

A new area of cooperation was countering maritime piracy. Collective efforts in the UN Security Council helped to elaborate the necessary international legal framework, to agree on a policy to strengthen bilateral operational collaboration.

Trade and economic ties with the United States were successfully developing. In the third quarter of 2008, the total trade volume reached $29 billion (against $19,4 billion in same period of 2007). Significant impediments to accelerated progress in this sphere were continued raw-material orientation of Russian exports and the negative impact of the world economic crisis.

Progress in the sphere of investments was less visible. The volume of U.S. capital investments in Russian economy demonstrated mixed trends. As of October 1, 2008, the US moved from the 6^th down to the 7^th position in the list of major investor into Russia. Besides, American investments are still poorly diversified – approximately half of them are accumulated in the extractive sector. Russian investments in the US economy in the third quarter of 2008 totaled $4,5 billion, with $3,8 billion being direct investments. Most active on the U.S. market were Russian energy and metallurgical companies.

Joint commissions and working groups continued their productive activities. Meetings of the Russia-U.S. Coordinating Committee on Science and Technology, the Innovation Council, Working Groups on Cooperation in the Sphere of Peaceful Atom and on Energy. In the context of regional cooperation, a major contribution to enhancing contacts between Siberia and the Far East and U.S. West Coast States was made by the 13^th Annual Meeting of the Russian-American Pacific Partnership.

In addition to direct contacts between finance, trade and energy ministers of the two countries, a mechanism of interaction between deputy heads of foreign affairs ministries was established – the Russian-American Economic Dialogue.

The business dialogue was advancing. It included the signing of cooperation agreements between the Russian Union of Industrialists and Entrepreneurs and the U.S. Chamber of Commerce, as well as between the Russian Chamber of Commerce and the American-Russian Business Council. Representatives of the business communities of two countries grew more aware of the usefulness of re-creating a full-size intergovernmental commission on economic, scientific and technological cooperation.