Summit may unlock Russia trade: U.S. business leader

MOSCOW (Reuters) - U.S. businesses is ready to up investment in Russia if the Russia-U.S. summit this week makes progress on geopolitical issues, and if Russia continues to improve its rule of law, the American Chamber of Commerce in Moscow said on Monday.

"If we have success on the geopolitical side of the summit we are going to see much more investment by U.S. companies," Andrew Somers, president of the American Chamber of Commerce in Russia, told Reuters financial television.

U.S. President Barack Obama is visiting Russia for the first time since his election to meet Russian leader Dmitry Medvedev for two days of talks on a number of issues, including a framework deal on arms cuts.

Business leaders traveling with Obama want to use the visit to boost trade and investment. Russian trade with the United States was just $36 billion in 2008, the same amount as with Poland.

"There are significant investments that are continuing in Russia by U.S. companies," Somers said.

Three major deals will be announced during the summit by U.S. companies, Somers said without specifying which deals.

U.S. agricultural machinery maker John Deere will invest $500 million in the next six years in Russia, while soft drink giant PepsiCo will boost investment to $4 billion from $3 billion in the next three years. Aircraft maker Boeing plans to announce a joint venture with the world's largest titanium producer, Russia's VSMPO-Avisma, on Tuesday, industry sources told Reuters on Monday without giving further details.

However, weak rule of law and some non-Russian companies' battles in Russian courts against local opponents are also of concern for U.S. businessmen. They expect to use the summit to press Moscow for better operating conditions for Western companies..

"We hope that president Medvedev will be able to follow through on his continuous campaign to improve the rule of law. I think this is a single biggest inhibitor to investment by U.S. companies their concern about the rule of law," he said.

Somers noted that strategic investors have not fled the Russia, whose economy is facing its first contraction in a decade and are staying despite zig-zags on the stock market.

"I think that is a sign people who understand the market have faith in the long term," Somers said.

The lobbyist said there are a lot of opportunities for U.S. business to enhance activities in Russia, particularly in energy sector, automobiles, consumer goods and retail.

"There is a large opportunity in the energy sector and I think this opportunity will be enhanced if this is geopolitical success of the summit," Somers said, adding U.S. technology could be applied to develop Russia's oil reserves.

The latest survey made by American Chamber of Commerce in Russia has shown the situation is still very bleak but there are signs of recovery in different sectors, Somers said.

"There are many of the companies here particularly in the consumer sector, with their gross sales in roubles up 15-20 percent. It is a good sign," Somers said.

(Reporting by Dmitry Sergeyev and Kiryl Sukhotski; Editing by Andrew Macdonald)