Doing Business in Russia: 2013 Country Commercial Guide for U.S. Companies INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2010. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.
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Chapter 1: Doing Business in Russia Chapter 2: Political and Economic Environment Chapter 3: Selling U.S. Products and Services Chapter 4: Leading Sectors for U.S. Export and Investment Chapter 5: Trade Regulations, Customs and Standards Chapter 6: Investment Climate Chapter 7: Trade and Project Financing Chapter 8: Business Travel Chapter 9: Contacts, Market Research and Trade Events Chapter 10: Guide to Our Services
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Chapter 1: Doing Business in Russia
• • • • • Market Overview Market Challenges Market Opportunities Market Entry Strategy Market Fact Sheet Link
Market Overview •
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With a vast landmass, extensive natural resources, more than 140 million consumers, a growing middle class, and almost unlimited infrastructure needs, Russia remains one of the most promising and exciting markets for U.S. exporters. Russia is the world’s 11th largest economy by nominal gross domestic product (GDP) and 7th largest by purchasing power parity (PPP). It has the highest per capita GDP ($13,400) of the BRICS countries (Brazil, Russia, India, China, and South Africa). Russia is an upper middle income country, with a highly educated and trained workforce and sophisticated, discerning consumers. Russia’s economy is still recovering from the economic crisis that began in 2008, with GDP growth estimated at 2.8% for 2013. In terms of trade in goods, Russia was the United States’ 27th largest export market and the 16th largest exporter to the United States in 2012. Russia was America’s 21st largest trading partner overall. U.S. exports to Russia in 2012 were $10.7 billion, a new record and an increase of almost 30% from 2011. This is six times more than the growth rate for overall U.S. exports worldwide, which rose by 5%. Russian exports to the United States in 2012 were $29 billion, a decrease of 15% from 2011. Russia’s leading trade partners were recently Netherlands, China, Germany, Italy, Ukraine, and Turkey. U.S. accumulated investment in Russia is approximately $10 billion. According to Russian data, the United States is Russia’s 10th largest foreign investor. Russia joined the World Trade Organization (WTO) in August 2012. This brought the world’s largest economy outside the WTO into the organization and bound it to a set of rules governing trade. Congress also enacted legislation to extend permanent normal trade relations to Russia in the same year. Russia’s membership in the WTO will liberalize trade with the rest of the world and create opportunities for U.S. exports and investments. For industrial and consumer goods, Russia’s average bound tariff rate declined from almost 10% to under 8%. U.S. manufacturers and exporters will have more certain and predictable access to the Russian market as a result of Russia’s commitment not to raise tariffs on any products above the negotiated rates. For American businesses, Russia’s accession to the WTO will also bring the following: 3
More liberal treatment for service exports and service providers. Stronger commitments for protection and enforcement of IPR. Rules-based treatment of agricultural exports. Market access under country-specific tariff-rate quotas. Improved transparency in trade-related rule-making. More effective WTO dispute resolution mechanisms.
The United States is working vigorously to expand bilateral trade and investment cooperation to benefit both Russia and the United States. In the last several years, the positive atmosphere resulting from the “reset” of bilateral relations has led to an unprecedented advance in economic cooperation between our countries. From 2009 to 2011, U.S. exports to Russia rose markedly by about...
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