Security Through Trade and Investment

Ambassador Thomas Pickering
Senior Vice President, The Boeing Company
Former United States Ambassador to Russia
Former Under Secretary of State for Political Affairs

OPENING REMARKS

It is a pleasure to be participating once again in the International Workshop, which is being held this year in a wonderful country. As Sandy Vershbow mentioned, there are lots of changes going on now in Russia and those of us who are watching them happen are particularly pleased about some of these outcomes. 

Our meeting on security is taking place at the right time. The world is changing very rapidly and we have seen much related to security go on around us. I would like to briefly talk about another aspect of security in a somewhat unusual way. As I heard Professor Baranovsky talk about capitalist circles, I was reminded of a Cold War story that is now almost exactly 40 years old. Since I joined capitalist circles after a long career in government, I thought I might tell it. The story happens to be one that involves Russians, and so I ask my Russian friends to excuse me.The story is about an incident that took place in Geneva, probably in 1963, at something that was then called the Eighteen-Nation Disarmament Conference, now the Conference of the Committee on Disarmament. The Russian delegation was led by Valerian Zorin, a formidable debater and a gentleman of great reputation who never gave a speech without mentioning the nefarious actions of capitalist circles. His opposite number was Joe Godber, minister of state, member of Parliament, a wonderful debater too, and later a very successful minister of agriculture in the United Kingdom. One day during the conference, Joe Godber gave a speech that he ended by saying: Mr. Zorin has never let us forget capitalist circles; he is constantly mentioning that capitalist circles are the root of all evil and block all progress in the disarmament council. How would Mr. Zorin like it if I called him a red square? Immediately, and as one, the Soviet delegation rose to their feet and ran to their friends in the American and British delegations to figure out how they were going to interpret this joke to Valerian Zorin. Thinking back on this story, I can tell you that currently I am neither a capitalist circle nor a red square but I have the opportunity now and indeed the pleasure of bringing the two together. 

THE ROLE TRADE AND INVESTMENT PLAY IN SECURITY

I have three points I would like to talk about: the role, particularly in the Russian/American context, of trade and investment as a security factor; my recent experiences in Russia as a member of the private sector; and just a few conclusions I have come to. 

Security is important to us all and without economics I believe security would not function well. Economic factors, including trade and investment, indeed contribute very much to stabilizing security and help to fight terrorism by dealing with some of the root causes of terrorist activity. Prosperity builds strong relationships, interdependence, and competition, as well as capabilities all across the board. For Russia and the United States, this is certainly true. And after September 11, as Sandy Vershbow pointed out, the U.S./Russia partnership has grown and strengthened. In my view there are several win-win trade and investment activities taking place between our two countries, and I believe these efforts have already made a contribution. There have been many changes since the early 1990s, and Russia does play a key role in security, one that has been fascinating and interesting as well as troublesome and beneficial for the United States. Trade and investment have also played their own key roles. 

COOPERATIVE U.S.-RUSSIA ACTIVITIES

In the private sector, particularly in space and aviation and related activities, Russia has played a positive role. I would like to relate a few of those activities, particularly those that involve working with my own company, which is what I know best. 

The International Space Station. First, we have an excellent degree of cooperation on the International Space Station. That station is 85% U.S./Russian made. Two of the main modules in that program, the functional cargo block and the service module, are made in Russia. Boeing has had the privilege of integrating the process, and I believe that, despite the difficulties we have had in the post-Columbia period, the space station represents a strong and significant effort for the future. 

Sea Launch. We have also worked on another space program that you may know less about. Sea Launch was originally conceived to launch satellites from the equator at sea to take advantage of the earth's rotation and to put more weight in orbit. The fascinating thing about this program is that it involves a four-way international cooperation: Ukraine for the rocket vehicle; Russia for the rocket engines; Norway for converted oil platforms and launch ships; and the United States for providing satellites, the integration capability, and some of the overall management. Boeing has had the privilege of playing a major role on the U.S. side. We have been involved in the first private effort to launch satellites, and, as I said above, on the equator at sea. Eight launches have now been completed; ten more are booked through 2004. 

The success of this program as well as the space station program has truly proven that, in the highest technology environment, the U.S. and Russia can work together without problems of loss of technology control. It also proves that we will be able to work together on complicated future programs such as the missile-defense system. In addition it helps keep highly competent scientists at home doing peaceful, private, productive work rather than somewhere overseas. 

Cooperative Activities. Boeing has also been involved for some time in a number of important cooperative activities in Russia. 

• In the research area, three hundred and fifty Russian scientists are currently working under contract to Boeing for twelve research and development institutions in seven cities. These scientists are addressing a wide range of aviation problems, from aerodynamics to fuel suitability, particularly at extremely low temperatures. Boeing also started designing airplanes in Russia. From the original team of ten Russian engineers, numbers have expanded to over five hundred and are climbing towards six hundred and beyond. All the engineers work in Moscow. We have six Russian partners, including some of the major aviation design bureaus who help us find and hire the engineers. This work is computer-assisted, with 24-hour design capability, two shifts in Moscow, one in either Wichita, Seattle, or elsewhere in the United States, and a wide range of products. A large part of the design work for the new Boeing 777-300 extended-range aircraft that was recently shown in Paris was done by this team in Moscow. 
• In the information technology area, Anatoly Karachinsky, the Bill Gates of Russia and a Workshop participant, is one of our partners. In many ways, the work performed by his one hundred and fifty remarkable programmers is a mainstay of our ability to keep building successful engineering and space applications. We also do excellent work with three other Russian partners in the IT industry. 
• As far as metals and titanium go, 35% of the titanium for Boeing commercial aircraft is purchased in Russia from a major partner in the Urals, who is doing exclusive titanium alloy metallurgical work for us as we look at new materials for aircraft for the future. This includes our new airplane for the mid-part of this decade, an airplane we currently call the 7E7.  
• Finally, we are working with Russia to open the polar route so that our customers can save hours when flying between Europe, North America, and Asia by being able to use open Russian airspace. We are also working with Russia to qualify former strategic Russian air force bases as alternative landing fields in order to make sure that twin-engine aircraft can fly these routes with safety and assurance. In addition, we are building with Russian partners a new long-range regional jet with fewer than 100 seats that is not only targeting the Russian market but beyond. 

Let me mention briefly that Lockheed-Martin works in Russia with its own space program, with the Atlas and Proton rockets, Pratt Whitney, and an engine plant in Perm. Our competitors and, indeed, those who cooperate with us in the European Aviation Defense and Space Company (EADS) and Airbus, have started a design bureau in Moscow following our example. 

THE EFFECTS OF COOPERATIVE ACTIVITIES ON SECURITY

What do all these activities mean for us as we look at security? First and foremost, they build prosperity in Russia. The interchange between us helps keep Russian science and technology working on the leading edge and supports the survival of the Russian aviation industry. These activities also help to promote our long-term and serious interest in nonproliferation by keeping Russian scientific talent at work at home. And these activities provide high-tech jobs in Russia and not in rogue states around the world.  

We are proud of this work. We understand now how globalization has many facets, one of which is to enhance security worldwide. It is a simple but very powerful concept and the synergies between what happens in the economic area and how we begin to look at the future in this very different world will be important to us as we go ahead. 

Being a better global player means being a more significant and more productive actor on the local scene as well, wherever we are. For Boeing, that is not only Russia but it is China and India and Europe and the rest of Asia. The private sector has a very strong role to play in this new mix. And when it works well, it complements and indeed works in tandem with what the public authorities can do. Establishing valuable and important linkages is part of this process and indeed what makes it interesting and significant. Trade and investment enhance global security; economics, politics, and security are all tightly linked; and the need for cooperation and public and private ties is essential to make it all succeed.