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Russia to study U.S. hi-tech, turn "reset" to trade

By Guy Faulconbridge

MOSCOW (Reuters) - Russian President Dmitry Medvedev travels to the United States on Tuesday for a visit both countries hope will help translate sunnier political ties into increased trade and concrete business cooperation.

Medvedev heads straight to California and will spend Wednesday soaking up the atmosphere in Silicon Valley, part of his drive to reduce Russia's dependence on natural resources by encouraging U.S.-style technology and innovation.

By visiting the cradle of California hi-tech, Medvedev will follow in the footsteps of curious Soviet leaders and tsars who have tried to drag Russia forward by inspecting and trying to imitate the industrial wonders of the West.

President Barack Obama has engaged the Kremlin in a "reset" of relations, which had deteriorated in recent years.

The new warmth between the Cold War rivals has already led to nuclear arms cuts and cooperation over Iran and Afghanistan; the aim now is to extend the warmer diplomatic climate into the realm of business and trade.

"The more positive political dialogue must without a doubt be accompanied by and be nurtured by real processes in the economic sphere," Medvedev's chief foreign policy adviser, Sergei Prikhodko, told reporters on Monday.

The United States accounts for less than 4 percent of Russia's foreign trade, compared to about 50 percent for the European Union, which depends on piped-in Russian natural gas.

The White House said Obama was pleased Medvedev would start his trip in Silicon Valley, where he could "review the unique set of factors that has fostered this important center of technological advancement and entrepreneurship."

Wary at first of U.S. talk of a "reset", Russian officials have warmed to Obama's concessions after rows which dominated the presidency of George W. Bush. They are pleased Washington scolds Russia less often on human rights and democracy.

The Kremlin urgently needs to diversify the economy after the global crisis showed the frailty of Russia, whose Gross Domestic Product fell 7.9 percent last year.

Medvedev will hold talks with Obama in Washington on June 24 and officials in Moscow said the Kremlin chief is likely to push for final U.S. approval of Russia's 16-year-old marathon bid to join the World Trade Organization.

Russia, the largest economy outside the global trade body, has often accused Washington of holding up its accession.


Moscow officials are keen to present the trip as a symbolic gesture: Russia looking westwards to reform rather than inwards or eastwards, to China.

Medvedev is expected to make the rounds of Twitter, Cisco Systems and Apple Inc. But the visit is also expected to bring deals in more traditional industries -- including one to buy up to 65 planes from Boeing.

A U.S. diplomat said the Boeing deal should show skeptics that Obama's Russia "reset" -- seen by critics as overly conciliatory -- is creating jobs for Americans.

The leaders of the world's two largest nuclear powers are also likely to discuss "further steps" to cut their arsenals of atomic weapons after the April signing of a successor to the 1991 Strategic Arms Reduction Treaty (START), Prikhodko said.

Russian leaders through the centuries have gone West to inspect technologies they hoped would jolt their often corrupt and backward elites out of technological isolation.

Czar Peter the Great is credited with dragging Russia from the backwaters to the mainstream of European civilization after a tour of Holland and England. When he got back to Russia he ordered courtiers to cut off their beards to look more European.

In Soviet times, Nikita Khrushchev's tumultuous tour of the United States in 1959 included a visit to IBM. Khrushchev was more impressed by IBM's self-service cafeteria than the computers and ordered officials to copy the design.

"Modernization is the key word," the last Soviet President Mikhail Gorbachev told Reuters in an interview this month.

"If you remember, perestroika started when we understood how far behind we had fallen. Russia is right now facing some very serious challenges... above all about the level of technology."

(Additional reporting by Denis Dyomkin, Melissa Akin and Steve Gutterman; writing by Guy Faulconbridge))