Accession of the Russian Federation to the World Trade Organization

Russia’s accession to the WTO cleared a major hurdle when the WTO Working Party on its accession approved, ad referendum on 10 November 2011, the package spelling out Russia’s terms of entry to the organization. The Working Party will now send its accession recommendation to the 15 – 17 December Ministerial Conference, where Ministers are expected to approve the documents and accept Russiaas a WTO Member. [1]

All unrestricted WTO documents on accession of Russian Federation.

As part of the accession accord, Russia has agreed to undertake a series of important commitments to further open its trade regime and accelerate its integration in the world economy. The deal offers a transparent and predictable environment for trade and foreign investment.

From the date of accession, the Russian Federationhas committed to fully apply all WTO provisions, with recourse to very few transitional periods (see details below). The Russian Federation’s commitments will include the following:[2]

  • Market access for goods
  • Market access for services
  • Export duties
  • General commitments on market access
  • Industrial and agricultural subsidies
  • Pricing of energy
  • Sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT)
  • Trade-related investment measures
  • Protection of trade-related intellectual property
  • Transparency
  • Functioning of the Custom Union betweenRussia,KazakhstanandBelarus

There is considerable concern about the disparity in incomes in Russia. The richest Russian regions are 67 times richer than the poorest Russian regions in nominal terms and 33 times richer when price differences between the regions are taken into account (World Bank, 2005). The richest regions include the European North, Moscowand the resource rich regions of Siberia and the Far East. The poorest regions include the North Caucuses, Southern Siberia and Central Russia.[3]

All text is reposted Ipsis litteris from its official sources for information purposes only.

Governmental subsidies to foreign companies in Belgium looking for access to European markets

On March 5th 2012, in Curitiba Brazil, Thierry Muschang, a Luxembourg PwC Director, presented the beneficial aspects of the project for attracting foreign companies to the Belgium / Louxembourg region, constructed in partnership with IDELUX, a government agency that was represented at the meeting by Joel Marinozzi, the Business Development Manager from the Economic Development Division, while in a mission in Brazil. The meeting was organized by the local Center for International Business (CIN) at the Federation of Industries of the State of Paraná (FIEP) and had the support of the Consulate General of Belgium in São Paulo, Brazil.

Located at the heart of Europe, the region of Belgium/Luxembourg means a strategic gateway to the European markets, very competitive in the international logistics point of view. This advantage is enhanced by the local government subsidies offered to foreign companies and specially start-ups who wish to install a regional office and/or a regional manufacturing distribution warehouse.

South African trade mission to Brazil

The South African delegation on a trade mission to Brazil was receptioned in the city of Curitiba this past week by the local trade association (ACP) in partnership with the Federation of Industries in the State of Paraná (FIEP). The mission received the support of the consulate general of South Africa in São Paulo and the Department of Trade and Industry of South Africa, and was composed by delegates from the wine industry, energy, civil engineering, architecture and tourism sectors.

Many of the delegates, specialy from the construction sector, were involved in the preparation for the World Cup 2010 in South Africa, and had the goal of identifying business opportunities in Brazil in order to transfer know how for the preparation of the upcoming World Cup 2014. Juliana Michelon Alvarenga from Aldeota Global, accompained by Wagner Giovani Silva, a technology manager from SOCIESC, a regional educational institution for technology development, met with a couple of the companies during the business rounds.

During the first meeting with Mr Fumani Dlomu, the director for Avuxeni Construction CC, a company from Highveld that provides electrical engineering services, the subject addressed was the solar energy market in SouthAfrica. According to Mr Dlomu, the sector is expanding and continuous growth is foreseen specially for low income housing programs. The equipment is today imported from China and specially Korea, being the later the equipments with better efficiency than chinese solar technology. He also mentioned that it is very promising to promote transfer of technology to South Africa. Aldeota Global also presented information on the Ex-Im Bank financing alternatives for importing US solar energy systems into Africa.

The last meeting was with The Western Cape Investment and Trade Promotion Agency of South Africa (WESGRO). The head of international trade and development, Mrs Seanne Kube, mentioned her concerns about how tough the Brazilian market is when in their attempts to conquer market share with the South African products. She also spoke about the well developed medicine technology capacity of the country and how the first open heart transplant was sucessfully executed in South Africa.

Aldeota Global also presented a pac to the members of the delegation with a document containing the highlights from the study recently published by The World Bank in partnership with IPEA, the Institute of Applied Economic Research, entitled Bridging the Atlantic, Brazil and Sub-Saharan Africa: South-south partnership for growth. The highlights were on the investment and economic complementarities between Brazil and African countries.

Economic rise of Brazil and segmentation of investment opportunities

Brazil has lived a unique economic situation in the past decades, after an economic boom at the end of the sixties and beginning of seventies (known as the economic miracle), when the country passed from an agricultural based economy to an industrial based economy. Such transformation and growth came with high inflation rates, and after the first and second oil crisis the country over went great period of stagnation at high inflation rates until the nineties, when many economic reforms brought inflation control and market opening.

Around 2000, Brazil started to grow more vigorously, maintaining its inflation rate under control. This scenario allowed the country to receive considerably economic indicators, such as the reduction of poverty of its population from 35.2% to 21.4%. Millions of people rose to middle class, creating with this a rise in consumption of goods as the primary factor of stimulation to the country’s growth, minimizing the impact of financial crisis from the developed world in its economy and, according to data published by the World Bank, managing to achieve economic growth at the rate of 7.49% in 2010.

Along with the economic growth and rise of the population to middle class, Brazil diversified its trading partners, establishing significant commercial relations in the Middle East and Asia, lessening its dependence on the US and European markets, and limiting the impacts of international crisis in its own economy.

Another relevant factor of today’s growing interest from international players in the Brazilian market is the upcoming international events to be hosted in the country such as the 2014 Worlds Cup and 2016 Olympic Games, attracting considerate investments, improvement in its infrastructure, stimulating economic dynamics and opening doors to international tourism. Such scenario brought many opportunities for entrepreneurs in many sectors. We have listed below the most significant ones:

Sectors connected to domestic consumption
Because of growing purchasing power and easier access to credit, Brazil shows higher consumption indicators and so increasing opportunities in retail.

Infrastructure, logistics and telecommunications
With growth of exports and of its economy, new opportunities are found in the concession of roadways, public transportation, and distribution logistics such as with current expansion and consolidation of national railroad systems in response to the need of transporting growing internal production from rural areas to cities and ports. Also, because of upcoming international events such as 2014 World Cup and 2016 Olympic Games, and also growing digital inclusion of lower income population, investment opportunities for expansion and implementation of necessary telecommunications infrastructure for growing access to broadband networks.

Renewable energy technology
Brazil is known for its majorly clean energy matrix due to favorable natural conditions for hydroelectric generation. However, in order to expand and diversify its energy matrix and technical capacity, recent public policies and governmental funding programs have stimulated market development for other renewable energy technology such as thermal and wind for the past decades and currently extending its policies to stimulate solar and ocean technology development.

Heavy machinery for manufacturing and civil construction
With easier access to credit and governmental incentives for industrial production and value-added exports, manufacturing units are increasingly undergoing infrastructural and technology improvements such as incrementing production growth through modernization of manufacturing facilities and expansion of production capacity. Much of current demand for heavy industrial machinery is being met with imports, because of scarce in-country machinery production.

As world population grows especially in Asian countries such as China, incapable of meeting its internal food demand, and also considering the Brazilian historical capacity for agricultural production and commodities exporting, business opportunities in the food supply chain are found today with less technical barriers like the ones seen in European and North American markets. Also, ethanol production is attracting increasing investments because of current growth in the use of biofuels in Brazil and in the developed world, as it lowers the dependency of such countries in the oil industry.

Visit of Asia-Oceania Ambassadors

Curitiba received the visit of Ambassadors from the Asia-Oceania group last Thursday, March 29th. Their agenda began with a breakfast event at the local trade association (ACP), and we were there to reception the delegation. The visit was coordinated by Mr. Brett Hacket, the Ambassador of Australia in Brazil, followed by the Ambassadors of Korea, the Philippines, Indonesia, Malaysia, New Zealand and Thailand. Each one of their speeches was carefully listened to and the intentions and opportunities of bilateral cooperation between Brazil and each one of these countries are listed below, from the perspective of the foreign Ambassadors.

It is evident that Brazil is becoming a center point for international relations in Latin America, but it is impressive how foreign delegations come with exclusive intentions of selling products and services to Brazil. This is only natural, of course, but from a strategic point of view for the internationalization of markets, it is not sustainable (if this is the correct and convenient word to mention). Not all manufactured products will have opportunities in the Brazilian market (or foreign markets as a whole). Countries have internal industrial capacity themselves. From a broad perspective, countries should not only consider selling products or services, but instead, transfering manufacturing facilities or business units as part of constructing economic complementary strategies for the globalization of international markets.

Australia, Ambassador Brett Hacket:
Mr. Brett Hacket started his speech by stating that “The World has discovered Brazil.” In terms of opportunities for bilateral cooperation between Australia and Brazil, Mr. Hacket outlined Infrastructure, manufacturing and agriculture as key sectors. In technology, research and innovation, he believes that the center of bilateral relations must be education. The Australian government has made available one thousand places within their higher education institutions for the program Science without Borders, and this number is foreseen to double within the next couple of months.

Republic of Korea, Ambassador Kyong-Yong KIM:
The Minister of Foreign Relations, Mr. Kyong-Yong KIM spoke about the FTAs (Free Trade Agreements) that his country has in the region, as an advantage for business between Brazil and his country, also undergoing negotiation for FTA with Japan and China. The main areas of interest are science and technical, and industrial cooperation. The Minister also mentioned that Brazil is very important in the context of landrace for agriculture.

Philippines, Ambassador Eva G. Betita:
Brazil and the Philippines hold a combined 300 million consumer market for manufacturing trade exchange. Business Process Outsourcing (BPO) is offered in the Philippines. Vale, a Brazilian company in the mining industry is present in the country for copper and gold extraction. International Terminal Container Services, a company from the Philippines is present in the port of Recife, Brazil. The Ambassador also mentioned how Public-Private Partnerships (PPP) is an experience that has led to governance improvement in her country. She also expressed how the Philippines has shown growing interest in the Brazilian market and made many visits, but the country is still waiting for the return from the Brazilian side.

Indonesia, Ambassador Sudaryomo Hartosudarno:
According to Mr Hartosudarno, Brazil and Indonesia already have significant relations in the tourism sector, because of the inflow of Brazilian tourists in the region, in special visiting Bali. He also outlined the Indonesian industry on Oil Palm and musical instruments as relevant activities from bilateral cooperation.

Malaysia, Ambassador Sudha Devi Vasudevan:
Mrs. Vasudevan mentioned the internal reforms in Malaysia and the cultural similarities between her country and Brazil. She mentioned as relevant sectors for cooperation manufacturing of parts for industry of oil and gas, ICT and multimedia, pharmaceuticals, construction material, palm oil, tourism and education services. Also, Malaysia has FTAs with Japan, Australia, New Zealand and China.

New Zealand, Ambassador Jeffrey Mcalister:
Investments and services are more important for bilateral cooperation between Brazil and New Zealand. The main sectors are agriculture, livestock, dairy, forests, gastronomy and equipment. There is a high flow of Brazilian students to New Zealand, but they wish to put more of these students in high education institutes and not just only for language studies as it is today. For this, NZ is also preparing for the Science without Borders program. Currently, NZ and Brazil are negotiating a revision on their flight schedule, trying to establish a direct flight between both countries. Mr. Mcalister also showed his concerns on the growing of protectionism in Brazil and mentioned that a FTA has been proposed between New Zealand and Australia, and Mercosul.

Thailand, Ambassador Tharit Charungvat:
Thailand is an exporter for rice, rubber, sugar and tapioca, among other products. Relevant sectors is tourism and the airport of Bangkok means possible experience exchange. Thailand has twelve expositions in order to put buyers and sellers together in one place, and has a very attractive currency exchange rate for the Brazilian currency Real.