(Recasts throughout, adds industry group comments, background)
By David Alexander and Krista Hughes
WASHINGTON, March 19 U.S. business leaders were
expected to air concerns over rising tensions with Russia and
possible sanctions over its moves to annex Crimea, in a meeting
with President Barack Obama's defense secretary and trade
representative on Wednesday.
U.S. Defense Secretary Chuck Hagel and U.S. Trade
Representative Michael Froman were due to address chief
executive officers and other businessmen, and answer their
questions, at the Business Roundtable's quarterly meeting in
The Obama administration has curtailed contacts with Russia
since the Ukraine crisis blew up, and Froman earlier this month
halted his agency's talks on deeper trade and investment ties
The United States and Russia had started talking about a
bilateral investment treaty, and Russian Economy Minister Alexei
Ulyukayev said in February the next step would be a meeting of
A Pentagon spokesman said on Wednesday that Hagel was slated
to discuss the Pentagon budget at the closed meeting but was
prepared to address the Crimea crisis after President Vladimir
Putin declared the Ukrainian region would become part of Russia.
"No doubt in the context of the discussion, current events
will come up," Rear Admiral John Kirby said. Hagel is standing
in at the event for Vice President Joe Biden, who is traveling
in eastern Europe to reinforce U.S. commitment to its allies.
The Washington-based Business Roundtable is an association
of chief executives of major U.S. corporations with global
footprints, from the defense industry and consumer manufacturers
to the healthcare and technology sectors.
Randall Stephenson, chairman of the group and CEO of AT&T
, told reporters on Tuesday that companies were closely
watching the Ukraine crisis.
U.S. and Europe on Monday imposed sanctions on Russian and
Crimean individuals linked to the region's seizure. Russia
scoffed at the sanctions but said it would retaliate, and the
White House said more sanctions were to come.
SANCTIONS AND RETALIATION
Some critics said the sanctions were too weak to deter
Putin, while others expressed concern about potential economic
impact the sanctions and expected retaliation by Moscow could
have on markets and trade.
The trade of goods between Russia and the United States was
worth $38.12 billion in 2013. U.S. firms have $14 billion in
direct investment in Russia, with about half that amount coming
the other way.
Asked whether chief executives were concerned about a
possible trade war, Stephenson said: "Anybody doing business in
Europe is watching the situation very, very closely. It's
obviously an area of concern."
It was not immediately clear which CEOs would attend the
meeting or what specific concerns they might raise.
Representatives for several member companies said their CEOs
were not attending the gathering. Others declined to comment on
the private meeting.
The Chamber of Commerce, another Washington-based business
group, said it was closely monitoring the crisis over Crimea and
called for close cooperation with Europe given it's annual trade
with Russia is about 15 times larger than that of the United
"A go-it-alone approach by the United States could be both
economically damaging and ineffective in accomplishing its
goals," said the Chamber's Vice President Myron Brilliant, who
oversees international affairs for the group.
Russia only joined the World Trade Organization in 2012 and
so far has had no trade disputes with the United States,
although U.S. trade officials in December raised concerns over
vehicle fees, copyrights and a meat additive ban.
Oil major ExxonMobil and aircraft maker Boeing
are among the U.S. companies with strong links to Russia
and who are involved in joint ventures with Russian partners.
(Additional reporting by Susan Heavey and Anna Yukhananov in
Washington and Lewis Krauskopf in New York; Editing by
Bernadette Baum, David Storey and Alden Bentley)