Cablegate: Codel Nelson-Lott: Interparliamentary Talks Focus

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1. (SBU) Summary: In May 27-28 sessions in Moscow of the
U.S.-Russian Senate-Federation Council Interparliamentary
Working Group, co-chairs Senators Ben Nelson and Trent Lott
and Russian Federation Council Foreign Affairs Committee
Chair Mikhail Margelov underlined the importance of
encouraging legislative branch cooperation between the U.S.
and Russia while not shying away from engagement on
differences. In several spirited sessions, legislators
discussed the threat posed to U.S. and Russian interests by
Iran, debated the necessity for U.S. missile defense sites in
Europe, and talked about U.S. policies in Iraq. In
discussions on economic ties, legislators focused on
investment opportunities for U.S. firms in Russia, repeal of
Jackson-Vanik, progress on IPR protection and the need to
boost energy ties. Both sides urged greater counterterrorism
cooperation. End Summary.

2. (SBU) In addition to Interparliamentary Working Group
co-chairs Senators Nelson (D-NE) and Lott (R-MS), additional
U.S. participants included Senators Evan Bayh (D-IN), Judd
Gregg (R-NH), and Richard Burr (R-NC), and Ambassador Burns.
Additional participants on the Russia side included: First
Deputy Foreign Affairs Committee Chairs Umar Dzhabarilov and
Ilyas Umakhanov, Deputy Foreign Affairs Committee Chair
Vasiliy Likhachev, Financial Markets Committee Chair Sergey
Vasiliyev, Industrial Policy Committee Chair Valentin
Zavadnikov, First Deputy Chair of the Natural Monopolies
Committee Valentin Mezhevich, Foreign Affairs Committee
member Igor Rogachev, Judicial and Legal Affairs Committee
member Farhad Akhmedov, Budgetary Committee member Konstantin
Tsitsin, Ministry of Defense Director for International

Military Cooperation General Buzhinskiy, and MFA officials.
U.S.-Russian Interparliamentary Cooperation

3. (SBU) Chairman Margelov stressed the value of open,
direct discussions between Federation Council Members and
Senators, particularly when there were problems in bilateral
relations. Senator Nelson acknowledged the value of
parliamentary exchanges and noted the timeliness of the
talks, given the tensions surrounding missile defense and
Kosovo. He emphasized the importance of finding common
ground, as did Senator Lott, who also highlighted areas of
cooperation on counterterrorism, nonproliferation, energy and
trade. Lott noted that the full potential of the bilateral
relationship was not yet being realized.

4. (SBU) Federation Council member Akhmedov acknowledged
that a nuclear Iran would pose a threat to both Russian and
U.S. interests. Senator Bayh said that failures of
intelligence in Iraq meant that intelligence about Iran
required greater scrutiny, but it seemed clear that Tehran
was intent on developing a nuclear weapons capacity and the
means to deliver such weapons and was actively supporting
terrorist groups. He welcomed Russian efforts to slow
Bushehr from coming on line. Bayh stressed that the U.S. was
now committed to a multilateral approach on Iran, but
expressed skepticism about its efficacy. Senator Gregg
argued that the U.S. and Russia were in a unique position to
deter Iran from developing weapons. Senator Lott stressed
that international dependence on Iranian oil would not
prevent the U.S. from taking whatever steps were necessary to
address Iranian challenges. He argued that Iran's nuclear
program was not just a U.S. problem, it was a common problem
for the rest of the world. Senator Nelson said Iran was now
seeking hegemony in the Middle East.

5. (SBU) Chairman Margelov said that his February visit to
Tehran reminded him of the USSR in 1982 -- there was a strong
state, but the political class was quite cynical. Iran was
very active internationally and was using its oil money,
promises of nuclear cooperation, and a radicalized Shiism to
stir up trouble. Akhmedov argued that the only way to hurt
Iran was an oil embargo, while Deputy Chair Dzhabarilov was
skeptical about the effects of sanctions. Senator Bayh asked
whether Russia would help stabilize world oil prices in the
event of an embargo. Margelov said that the markets would
adjust rapidly, while Akhmedov said that the U.S. and others
would have to choose between their pocketbooks and security
concerns. Akhmedov warned that Iran would seek to cause
trouble among Russia's 20 million Muslims.
Missile Defense

6. (SBU) General Buzhinskiy, MOD Director for International
Military Cooperation, gave a presentation on Russian concerns

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about U.S. MD plans. Buzhinskiy thought it would be at least
30 years before Iran would have the technological capacity to
strike the U.S. with nuclear-tipped ICBMS. To do so, Iran
would need to build a new industrial base and develop a means
of testing rockets. He expressed concerns that the U.S.
could develop breakout missile technology which would make
interceptors in Poland a threat to Russian strategic assets.
Noting that these were his personal views, Buzhinskiy
suggested that the U.S. provide assurances that its MD system
was not aimed at Russia, would not be expanded, that any
radar would be fixed and would face south, and that site
visits would be possible. He said that Russia was willing to
discuss technical cooperation on MD, but argued that Russia
was not interested in developing a new global MD system and
was concerned about technology transfers. He noted that
China was also concerned about U.S. MD plans, given the small
size of its strategic forces, and argued that Beijing's
anti-satellite tests demonstrated China's resolve.

7. (SBU) Deputy Chair Likachev stressed Russian and
European opposition to U.S. MD plans and wondered why the
U.S. was not placing MD facilities closer to Iran. Chairman
Margelov noted the Cold War legacy made Russia suspect U.S.
plans. Senator Bayh acknowledged that U.S. plans created
concerns in Russia, but said the U.S. proposal was not
directed against Moscow. Senators Nelson and Bayh urged that
U.S. and Russian experts cooperate on MD. Senator Lott
acknowledged that Iran had limited indigenous technical
capabilities, but was concerned that Iran would buy
technology from others. General Buzhinkskiy dismissed
concerns that Tehran could purchase workable ICBMS and said
that Iran was many years away from developing a nuclear
warhead that could be mounted on a long range missile.
Senator Burr cautioned that the pace of technological change
was accelerating and that Iran's wealth allowed it to seek
access to sophisticated weapons technology. He hoped that
Russia would grow more comfortable with U.S. MD plans so that
together they could address a common threat.

8. (SBU) Federation Council Member Akhmedov argued that the
U.S. and Russia were competing in Central Asia over energy
supplies when there should be greater cooperation. He
challenged U.S. involvement and motives in Iraq and
questioned what U.S. interests were in Iran, suggesting that
the desire to control energy resources drove U.S. policies.
Deputy Chair Likhachev criticized attempts to "impose"
democracy in the Middle East, arguing that the Iraq
experience alienated others from pursuing a democratic course
because democratization was associated with chaos. At the
same time, the U.S. needed to be effective and consistent in

9. (SBU) Senator Bayh noted that U.S. involvement in Iraq
had stirred divisions in the U.S. The U.S. should support
elements in a society that were authentic and supported
democracy; there needed to be some choice besides
authoritarian, corrupt governments and radical Islamists.
Senator Burr said that Iraq lacked the strong leadership
necessary to encourage democratization and underlined the
dangers of continued instability in the Middle East. Burr
said the globalized economy meant that instability in one
area could have ripple effects around the world.
Economic and Energy Cooperation

10. (SBU) Committee Chair Zavadnikov reviewed Russian
economic reforms efforts in manufacturing and energy
production and stressed the growing importance of the
services sector in the Russian economy. Russia was focused
on diversifying its economy and was seeking to develop high
technology and value-added industries. Senator Gregg noted
the role of Gazprom in the Russian and global economy. He
underlined the importance of IPR protection. Zavadnikov said
that Russia had made major strides in IPR legislation, but
now had to focus on implementation. Deputy Chair Umakhanov
noted that Russia's pursuit of high tech development was
creating a strong lobby for IPR protection.

11. (SBU) Senator Lott encouraged greater energy
cooperation, noting Russian expertise in oil and gas
development. Council Member Akhmedov noted that oil revenues
were a double-edged sword for Russia, because they postponed
the need for reforms and warped the Russian economy.
Chairman Margelov defended Russia's market-based energy
relationships with the former Soviet republics, arguing there
was no reason any longer for Moscow to subsidize them. He
also pointed to difficulties between Germany and Poland over

MOSCOW 00002970 003 OF 003

the Russian North Sea pipeline. Senator Burr heralded
Russian purchases of Boeing aircraft and noted International
Paper's interest in acquisitions in Russia. U.S. firms would
be even more interested if Russia established a fair and
transparent legal system. Zavadnikov and Akhmedov both noted
that the long Soviet experience had retarded the development
of legal institutions and created economic distortions that
were slowly being addressed; corruption was a major cause of

12. (SBU) Akhmedov called for the repeal of Jackson-Vanik,
arguing that it was a bilateral irritant that had long
outlived its usefulness. Senator Gregg acknowledged that
there was a consensus that it should be removed. Senator
Burr said the U.S. looked forward to Russia's full
participation in the WTO. Senator Lott noted the interest of
U.S. firms in doing business in Russia as well as Russian
firms that had now entered the U.S. market. He stressed the
importance of the rule of law and effective corporate
governance to ensure the security of U.S. investments and
warned that U.S. firms were concerned about GOR's
unpredictability and actions taken to change the rules of the

13. (SBU) Chairman Margelov reviewed progress to date in the
global war on terrorism, noting that the U.S., Russia, and
Europe were constrained in fighting terrorism by the need to
balance terrorist threats with respect for human rights. He
argued that Europe in particular emphasized the need to
respect this balance. Senator Burr observed that the
counterterrorist fight brought together the U.S., Russia and
Europe. He outlined the need to take a long view of the
struggle against terrorism, agreeing there was a need to
strike a balance between human rights and the obligation to
protect citizens from attack. Demographic changes would
complicate the task of fighting terrorism. Burr encouraged
greater cooperation between the U.S. and Russia in sharing
intelligence and stressed that a successful fight against
terrorism required leadership from many countries, while
noting that the U.S. and Russia had the clearest view of the
threat posed by radical Islamists. Both countries also had a
special responsibility and capacity to combat nuclear
terrorism. Burr also noted links between drug traffickers
and terrorists.

14. (SBU) Deputy Chair Likhachev argued that the
international community should rely more on international
organizations, such as the UN Security Council, in addressing
counterterrorism. The counterterrorism committees in the UN
Security Council should be consolidated to improve
efficiency. The U.S. and Russia should be leaders on this
issue internationally, Likhachev said, and should also
support interparliamentary and intercivilizational dialogue
to understand better differences between religions and
cultures. Fighting terrorism required close attention to the
specific circumstances in a region; in Chechnya, Russia had
successfully isolated the terrorists from the Islamic
institutions in society. Senator Lott reviewed the difficult
task of balancing protection of citizen's rights with the
need to confront terrorist threats, flagging issues such as
profiling, interrogation techniques, detentions and
electronic eavesdropping. Lott endorsed the need for
international cooperation in the fight against terrorists,
pointing out that the threat was not limited to the Middle

15. (U) This message has been cleared by CODEL Nelson-Lott.

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