GHY Tradelines

(CBC News)

Russia is set to impose new restrictions on its meat imports next week, a move that is being watched closely by pork and cattle producers in Canada.

The guidelines, which will be unveiled Monday, are expected to be related to concerns over the use of the feed additive ractopamine in livestock. Since December, Russia has restricted the import of Canadian meats that contain this additive and are anticipated to tighten these regulations further. Read more here.
 

(RT)

The European Commission has accused Russia of protectionism and threatened to forward the complaint to the World Trade Organization.

The European Commission wants Russia to drop restrictions on exports or face a legal dispute at the WTO ahead of a meeting in Moscow aimed at dealing with a number of troubling matters ranging from Syria to energy, Reuters reports.

EU claims that despite having joined the WTO in August 2012, Russia has kept some protectionist measures, and is even creating new ones, “the majority of which are not in compliance with Russia’s WTO commitments.” These measures place extra barriers to European companies wanting to operate in the Russian market. Read more here.
 

(Janet Porter – Lloyds Loading List)

Russia’s antitrust investigators have raided the offices of at least a dozen of the world’s largest container lines in a move reminiscent of action by Brussels nearly two years ago.

Carriers caught up in the probe include the top three – Maersk, MSC and CMA CGM – along with three Japanese lines and six from Asia and the Middle East. Unannounced visits to offices in St Petersburg and Moscow were made, with competition officials said to be looking at both liner shipping and logistics activities.

Russia’s Federal Anti-monopoly Service (FAS) has issued a statement listing the companies visited and called for information about possible violations of the law by providers of marine transportation.

“Marine container transportation makes a significant impact upon developing international trade. In the recent years, the share of container cargo in the total cargo turnover [worldwide average data] has reached 55% [worldwide average data],” the FAS said. “Since the costs of marine container transportation constitute a significant portion of the price of goods, every increase of the transportation costs directly affects customers across the globe.” Read more here.
 

(World Bulletin)

Russia on Tuesday announced that it is to stop meat imports from the U.S. entering the Russian market.

The Russian market will be closed to imports of meat and meat products of American origin temporarily, valid from February 11, according to statement released by Federal Service for Veterinary and Phytosanitary Suveillance, Rosselkhoznadzor.

A senior-level official from Rosselkhoznadzor, Aleksey Alekseenko, stated that the restrictions were introduced due to the use by the USA of prohibited in Russia beta-adrenergic agonist ractopamine in beef, pork and turkey meat. Read more here.
 

(STR Trade Report)

The Office of the U.S. Trade Representative has announced an agreement between the U.S. and Russia on an action plan to improve the protection and enforcement of intellectual property rights. A USTR press release states that this action plan addresses the following priority areas.

- combating copyright piracy over the Internet, including actions such as takedowns of infringing content, action against persons responsible for IPR crimes, coordination with rights holders, cooperation and information exchange between IPR enforcement officials, and devotion of resources and personnel to law enforcement agencies to combat piracy over the Internet

- enhancing IPR enforcement, including actions against counterfeiting, piracy and circumventing technological protection measures; imposing deterrent penalties and sentences; conducting raids; seizing and, where appropriate, destroying IPR infringing products and the equipment and materials used to produce them; and promoting transparency and public awareness of IPR enforcement actions

- coordinating on legislation and other issues, including on Russia’s draft legislation on liability for Internet service providers to combat Internet piracy, consulting on implementation of Russia’s WTO pharmaceutical test data protection commitments, administrative penalties, and exchanging information on enforcement mechanisms and best practices for judges

USTR states that in 2013 the work of the U.S.-Russia Intellectual Property Working Group will focus systematically on Russia taking actions identified in this action plan.
 

(Reuters)

Russia may freeze imports of U.S. beef and pork amid concerns about producers’ use of the feed additive ractopamine, the U.S. Meat Export Federation said.

Russia set a deadline effective Friday for U.S. exporters to certify that beef and pork have been tested to confirm it’s free of ractopamine. The additive, prohibited by some other countries, is used to promote leanness in livestock.

Russia’s requirement may effectively result in a halt to pork and beef imports from the U.S. by Saturday, said Joe Schuele, a spokesman for the U.S. Meat Export Federation. “The back and forth we’ve had with Russia on ractopamine has gone on for some time,” Mr. Schuele said. “They’ve now reiterated they would impose the documentation requirement.” Read more here.
 

(Peter Mandelson — BNE)

How much will WTO membership actually change for traders? The Russian average tariff for manufactured and agricultural goods will fall to the lowest among the BRICs over the next five years. This will probably save Russian importers several billions a year, but the tariff cuts are relatively small. Russia has also agreed to bind export duties on over 700 products. There are new tariff rate quotas on meat and wood products, which are key for the EU and important imports for the processing industries in Russia. Overall, the change in trade profile is not large – especially when compared to the equivalent change in China’s 2000 accession. Nevertheless, they will undoubtedly make Russian more attractive as a trade partner.

It is my hope that WTO accession is a sign that Russian leaders understand that trade is a vital tool to build wide-ranging, mutually beneficial and durable relationships. The key here will be Russia’s own orientation. If it sees its own economic sphere as rooted chiefly in the Eurasian Customs Union (of which the other two members are not members of the WTO) and its regional ambitions, it will not make the most of the opportunity for closer economic integration with partners around the globe.

On investment, the basic challenge hasn’t changed in the ten years that I have been closely involved with doing business and trading in Russia. Russia can be a risky and unpredictable place to do business as a foreigner – it is ranked at 112th in the World Bank’s latest “Doing Business” survey. Perception of “Russian risk” among international investors has risen to alarming levels, prompting significant capital flight – over $80bn in 2011.

Here the WTO entry could play a crucial role. The bottom line is that WTO entry matters for what it implies about the political and economic outlook of the state that seeks it. The policies that really make a difference for the acceding state tend to be the package of reforms and capacity building that accompany accession. Joining the WTO generally includes a certain level of reform and openness, and a tolerance for foreign competition. This is why it acts as a useful signal to inward investors. In principle it is something on which Russian firms could trade in attracting joint-venture partners. Read more here.
 

(Reuters)

The House of Representatives is expected to vote next week on a long-delayed bill to ensure U.S. companies receive all the market-opening benefits of Russia’s recent accession to the World Trade Organization, congressional aides said on Friday.

The House Rules Committee has scheduled a meeting late Tuesday afternoon on the legislation to establish “permanent normal trade relations” (PNTR) with Russia, setting the stage for a full House vote on the bill by the end of the week, a House leadership aide said.

The Senate would also have to approve the White House-backed legislation for President Barack Obama to sign it into law. Read more here.
 

(CBC News)

Prime Minister Stephen Harper arrives today in Vladivostok, Russia for APEC 2012, the gathering of leaders from the countries belonging to the Asia-Pacific Economic Cooperation.

For two days, beginning Saturday, Russian President Vladimir Putin will play host at a venue specifically constructed – on an island – for the APEC forum. Russky Island measures 18 kilometres in length and just 13 kilometres in width and normally has a population of about 5,000 people. But it will be invaded by delegations from APEC’s 21-member nations for a brief period this weekend. Here are some of the topics – on and off the official agenda – that could come up at the meeting. Read more here.
 

(Jordan Press – Postmedia News)

Prime Minister Stephen Harper leaves Thursday for Russia and a date with the leaders of the 21 largest economies along the Pacific Rim to push what has become an aggressive free trade agenda.

But while trade will receive the largest spotlight at the meeting of the Asia-Pacific Economic Cooperation (APEC) group, another agenda item will receive a passing review during the two-day meeting: food security.

That discussion about food security comes amid concerns of rising costs for goods due to a drought that destroyed crops across the United States, and after a special UN envoy chided the Canadian government for not doing enough to provide food security to parts of the country, including in the North.

The Conservatives say food security would be one of the four priority areas at the meeting and food security – or affordable and easy access to safe and nutritious foods –  is a top priority for Canada’s international aid program. Read more here.
 

(Dina Gusovsky – The Examiner)

For months now, American businesses have been warned that if the U.S. does not grant Russia permanent normal trade relations status as Russia officially becomes a member of the World Trade Organization, U.S. companies could lose hundreds of millions of dollars.

Now that Russia has joined the WTO, it is important to consider what effect, if any, the status quo could have on the American economy.

On the Russian side, any economic changes will be gradual.

Russia has not rushed to lower trade tariffs, instead choosing to take a slower course so that its own companies can deal with the changes in due time.

On the American side, Congress has yet to act leaving companies like Deere, General Electric, and Caterpillar, among others, to wonder if their bottom line will suffer as a result of losing out on the Russian market. Read more here.
 

(Tom Parfitt – The Telegraph)

American companies are lobbying for cancellation of a 40-year-old Cold War trade restriction which is preventing them from cashing in on Russia’s accession to the World Trade Organisation.

Businesses including Caterpillar, John Deere, and Boeing, say they are losing money every day because the out-of-date provision leaves them at a major disadvantage to European and other competitors on the Russian market.

The Jackson Vanik amendment was introduced to US federal law in 1974 to deny “most favoured nation” trading status to non-market economies that restricted emigration, in particular the Soviet Union, which did not allow Jews to freely leave the country.

Although the constraint on Moscow stayed on the books after the Soviet break-up in 1991, it had little effect because the Kremlin did not hinder emigration and Washington granted Russia an annual waiver.

However, with Russia’s entry to the WTO finally completed after 19 years of negotiations, the US is now technically in breach of its free trade obligations because of the amendment, meaning Moscow has the right to penalise US businesses in reply. Read more here.
 

(Anatoly Medetsky – The Moscow Times)

Now that its part of the WTO, the Russian government will move to knock down trade barriers on exports, an Economic Development Ministry official said Thursday.

The ministry has a “black list” of Russia’s trade partners that restrict imports from the country and will seek to remove any unfair constraints, Yekaterina Mayorova, deputy director of the Economic Development Ministry’s department of trade negotiations, said at a news conference.

She spoke a day after Russia joined the Word Trade Organization, which serves as a global trade arbiter.

The ministry has estimated that Russian companies lost up to $2 billion annually in potential sales thanks to those restrictions. It counted 72 protective measures — chiefly antidumping import duties and tariff quotas — against Russian goods in a report released in April.

“We do have a sort of a black list of our trade partners that apply against us various restrictions and discriminatory measures that don’t comply with WTO rules,” she said. “These measures vary on how painful they are for our producers, and we will no doubt fight them.” Read more here.
 

(AFP)

Russia on Wednesday crowned a tortuous 18-year journey from communist economic isolation by becoming the largest state outside the World Trade Organization to join the preeminent free trade club.

The more optimistic economists think the transition will add an additional tenth to Russia’s gross product to its $2 trillion economy and finally herald the end of its era of bureaucratic mismanagement and impenetrable red tape.

But many of the smaller entrepreneurs complain that a flood of more attractive foreign products could simply wipe them out of business and leave Russia without the domestic industry necessary for achieving sustainable growth.

And almost everyone agrees that the onus will now be on the government to fulfill investors’ rising expectations of Russia becoming a country where doing business is not a prohibitively risky bet. Read more here.
 

(NPR)

Russia is about to join the World Trade Organization, which means the country will have to lower trade barriers and expose Russian companies to more international competition than before. Will Russia follow in the footsteps of China when it entered the WTO and prosper, or will the new affiliation prove to be too much?

Read the transcript or listen to the story here.
 

(USRBC-CUSRT)

The U.S.-Russia Business Council (www.usrbc.org) and the Coalition for U.S.-Russia Trade (www.usrussiatrade.org) applaud Republican and Democratic Congressional leaders in both chambers of Congress for their commitment to hold a vote in September on legislation to enact Permanent Normal Trade Relations (PNTR) with Russia.

In statements issued late last week, House Majority Leader Eric Cantor (R-VA) supported adoption of PNTR as soon as Congress reconvenes in September.  At the same time, House Democratic Whip Steny Hoyer (D-MD) expressed confidence that the legislation would pass the House “with a strong majority.”

“We welcome this strong commitment by leaders of both parties to vote on PNTR when Congress returns in September,” said USRBC President and CEO Ed Verona. “It is disappointing that PNTR was not passed before the recess, since U.S. business will not be on a level playing field with foreign competitors when Russia joins the WTO on August 22,” according to Verona. “However,” he added, “the statements by Mr. Cantor and Mr. Hoyer demonstrate that support for PNTR is bipartisan.  The USRBC and the Coalition for U.S.-Russia Trade will continue working to secure final passage.” Read more here.
 

(Vicki Needham – The Hill)

Business groups supporting Russian trade legislation are increasingly worried Congress will leave for its five-week recess before completing the measure.

If Congress does leave before removing Russia from the terms of the 37-year-old Jackson-Vanik law, U.S. exporters will be the ones that suffer, the groups say.

Russia in August is expected to join the World Trade Organization (WTO), a move that requires the United States to repeal Jackson-Vanik, a U.S. law originally aimed at encouraging the emigration of Russian Jews with the threat of higher tariffs on Russian products.

If the United States does not lift Russia from Jackson-Vanik, the world’s sixth-largest economy will be able to raise tariffs on U.S. goods under the WTO’s rules.

“This is a mess and it is why the USA Engage and the National Foreign Trade Council are urging this Congress and this president to get their act together right now and enact Russia PNTR [permanent normal trade relations],” Dan O’Flaherty, NFTC’s vice president, wrote in a Monday blog post. Read more here.
 

(Bloomberg)

Congress probably will delay action on legislation to ease U.S. trade relations with Russia until after that country joins the World Trade Organization next month.

The measure, sought by U.S. companies such as Caterpillar Inc. (CAT) (CAT), was approved by the House Ways and Means Committee on a voice vote yesterday. House Speaker John Boehner, an Ohio Republican, told reporters he doesn’t plan a vote next week on the measure because the House has a full schedule of other issues to consider.

With lawmakers scheduled to leave Washington next week for a monthlong recess, the delay would preclude enactment before Congress returns in September. Read more here.
 

(Mike Godfrey – Tax-News.com)

The United States Senate Finance Committee has approved a bill that would establish permanent normal trade relations (PNTR) with Russia by removing the nation from the Jackson-Vanik Amendment.

The Jackson-Vanik amendment in the United States was introduced to prohibit most favoured nation status for non-market economies originally on the basis of human right concerns. The United States has retained the law but has each year since 1992 granted a waiver to Russia. The removal of Russia from the Jackson-Vanik Amendment will be tied to approval of the Magnitsky Bill, which introduces sanctions, such as visa denials and asset freezes on those believed to have perpetrated human rights offences in Russia. An updated version of the Bill, approved by the Senate Finance Committee last month, includes additional provisions to address corruption issues in Russia, and to ensure that the US Administration closely monitors and enforces Russian compliance with its World Trade Organization (WTO) obligations. Read more here.
 

(Doug Palmer – Reuters)

The top Republican and Democrat on the House of Representatives Ways and Means Committee said on Thursday they reached a deal to move forward on Russian trade legislation, including human rights provisions opposed by Moscow. [...]

Business groups, such as the U.S. Chamber of Commerce, want Congress to pass the trade legislation before its August recess to make sure U.S. companies share in the benefits of Russia’s upcoming entry in the World Trade Organization. Read more here.