Trade in Brazil

Brazil reported a trade surplus equivalent to 807 Million USD in June of 2012. in times gone by, from 1991 until 2012, Brazil Balance of Trade averaged 1310.5900 Million USD reaching an all time high of 5659.4000 Million USD in July of 2006 and a record low of -1845.3000 Million USD in December of 1996. Brazil has an export-oriented economy. The main exports are transport equipment, iron ore, industrial raw materials, soybeans, footwear, coffee, autos, automotive parts, machinery. Brazil imports machinery, electrical and transport equipment, chemical products, automotive part and electronics. The primary trading partners of Brazil are The United States, European Union and Argentina. This page includes a graph with chronological data for Brazil Balance of Trade.

The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a unconstructive balance of trade is known as a trade deficit or, informally, a trade gap. The balance of trade forms part of the current account, which also includes other transactions such as income from the international investment position as well as worldwide aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position. The Balance of Trade is identical to the difference between a country's amount produced and its domestic demand - the difference between what goods a country produces and how many goods it buys from abroad; this does not include money respent on foreign stocks, nor does it factor the concept of importing goods to produce for the domestic market.

The EU is Brazil's biggest trading partner, accounting for 22.5% of its total trade (2009). It is part of Mercosur and part of the EU's ongoing negotiations for a free trade conformity with that regional group. Brazil is the single biggest exporter of agricultural products to the EU, accounting for 12.4% of total EU imports (2009) and ranks as the EU's 10th trading partner. In goods, the EU runs an overall trade deficit with Brazil of over €4.1 billion (2009but has a surplus in commercial services trade of €2.4 billion (2009). The EU  is the biggest foreign investor in Brazil with nest egg in many sectors of the economy.

The Brazilian market is relatively highly protected with an applied customs averaging tariff of 12% and the EU consistently encourages Brazil to reduce tariff and non-tariff barriers, and to maintain a stable regulatory situation for European investors and traders. Brazil is a key interlocutor for the EU in the on-going WTO Doha Round of world trade talks.

The backbone of the EU's future bilateral trade relations with Brazil will be a wide-ranging EU-Mercosur Association Agreement which will also result in the creation of a vast free trade area. This agreement which is currently under compromise should provide a boost to regional trade integration among the countries of Mercosur and stimulate new opportunities for trade with the EU by removing tariff and non-tariff barriers to trade. The Mercosur-EU AA will cover, among other issues, trade in goods and services, investment, intellectual property rights (IPR) aspects including protection of environmental indications, government procurement, technical barriers to trade and sanitary and phytosanitary aspects.

Trade in Brazil

Until summer 2004 there was gradual but substantial progress in the negotiationwhich, however, stalled in September 2004. Since then, regular acquaintances have taken place both at ministerial and technical level in order to explore ways on how to re-engage the process.  The Madrid Summit, which brought together Heads of State and Governments from Latin America, the Caribbean and Europe, as well as imperative non-state actors, resulted in a decision to re-launch negotiations of the EU-Mercosur Free Trade Agreement - a process which is now under way.

Brazil was the United States' 8th largest goods export souk in 2011.

U.S. goods exports to Brazil in 2011 were $42.9 billion, up 21.2% ($7.5 billion) from 2010, and up 180% from 2000. U.S. exports to Brazil accounted for 2.9% of taken as a whole U.S. exports in 2011.

The top export categories (2-digit HS) in 2011 were: Machinery ($7.9 billion), Mineral Fuel ($6.3 billion), Aircraft ($5.4 billion), Electrical Machinery ($4.6 billion), and Plastic ($2.1 billion).

U.S. exports of agricultural products to Brazil totaled $800 million in 2011. Leading categories include: cotton ($323 million), dairy products ($40 million), wheat ($30 million), and sugars and sweeteners ($21 million).

U.S. exports of private commercial services* (i.e., excluding military and management) to Brazil were $19.9 billion in 2011 (preliminary data), 21% ($3.4 billion) more than 2010 and 219% greater than 2000 levels. Other private services (business, professional, and technical services, telecom services, and financial services), travel and royalties and license fees categories accounted for most of the U.S. services exports to Brazil.

Brazil was the United States' 17th largest supplier of goods imports in 2011.

U.S. goods imports from Brazil totaled $31.4 billion in 2011, a 30.9% increase ($7.4 billion) from 2010, and up 126% from 2000. U.S. imports from Brazil accounted for 1.4% of overall U.S. imports in 2011.

The five largest import categories in 2011 were: Mineral Fuel and Oil (crude) ($10.5 billion), Iron and Steel ($3.5 billion), Machinery ($2.3 billion), Spices, Tea, and Coffee (coffee) ($2.0 billion), and Wood Pulp ($1.0 billion).

U.S. imports of agricultural products from Brazil totaled $4.1 billion in 2011, the 4th largest supplier of Ag imports. Leading categories include: coffee (unroasted) ($1.9 billion), fruit and vegetable juices ($321 million), tobacco ($278 million), and raw beet and sugar cane ($270 million).

U.S. imports of private commercial services* (i.e., excluding military and government) were $6.9 billion in 2011 (preliminary data), 32% ($1.7 billion) more than 2010 and up 254% from 2000 level. The other private services (business, qualified, and technical services), travel services, and royalties and license fees categories led U.S. services imports from Brazil.

U.S. foreign direct investment (FDI) in Brazil (stock) was $66.0 billion in 2010 (latest data available), up 19.7% from 2009.

U.S. direct investment in Brazil is led by the manufacturing and finance/ indemnity sectors.

Brazil FDI in the United States (stock) was $1.1 billion in 2010 (latest data available).

Brazil’s reported direct investment in the U.S. is led by the comprehensive trade sector.

Sales of services in Brazil by majority U.S.-owned affiliates were $24.7 billion in 2009 (latest data available), while sales of services in the United States by majority Brazil-owned firms were $972 million.

 OPPOSITE Rio de Janeiro's best-known shopping mall, just before the tunnel that takes drivers to the beach resorts of Copacabana and Ipanema, stands a gleaming new showroom for JAC Motors, a state-owned Chinese car maker. The importance of the location is appropriate: imported Chinese cars have suddenly become a visible presence on Brazil's roads. This has alarmed Brazil's car industry and President Dilma Rousseff's government. Last month a 30-percentage-point tax increase on cars with less than 65% local content took effect, taking the tax on some imported models to a punitive 55%—on top of import tariffs.

The government's response is a mix of short-term protectionist measures combined with modest steps towards more constructive longer-term policy changes. The tax rise on cars was announced last September, as part of a new engineering policy. The aim was to bully carmakers without plants in Brazil to hurry up and build them. This seems to be working: JAC Motors, BMW, and Jaguar Land Rover, a unit of India's Tata Motors, have all announced plans to build factories in Brazil since the import tax was unveiled.

The industrial policy also features an experimental cut in the payroll tax for footwear, textile, furniture and software firms. But officials are at pains to point out that, rather than help specific industries, the main thrust of the new policy is to try to boost competitiveness more generally by promoting innovation, higher schooling and training.

The second emollient is that the real has depreciated by 17% against the dollar since its peak in late July. That is partly because investors fled emerging markets but also because of government intervention, in the form of taxes on short-term capital inflows. At the same time, the Central Bank has taken advantage of the economy's soft patch to cut its benchmark interest rate, from 12.5% in August to 11%. With inflation at 6.5%, the real interest rate is much lower than at any other time in the past decade.

But industry also wants to see fewer taxes, cheaper energy, less bureaucracy and better transport networks, says Paulo Skaf, FIESP's president. On these things the government is moving far more slowly, if at all. However narrowly targeted, protectionism will not only raise prices in Brazil but risks sending the wrong message to businesses. Across Latin America, trade with China is growing but partly at the expense of intra-regional trade in manufactures. Brazil should lead a move to tear down all trade barriers within Latin America, thus turning the Chinese challenge into an opportunity, says Mr Amaral.

In 2005, Brazil's total exports more than doubled to US$118 billion from $58 billion for 2001. Over that same period, imports into South America's largest country grew some 30% to $74 billion from $56 billion.

Brazil's trade surplus has expanded more than 16-times to $47 billion from $2.6 billion over the past 4 years.

With a population of almost 200 million, Brazil is the world's leading exporter of sugar, coffee, beef and orange juice. Soybeans are Brazil's fastest-growing shipments, powered by the appetites of China's 1.3 billion consumers. Other major exports include aircraft, vehicles, iron ore, steel, textiles and footwear.

o remain an agricultural superstar in global trade, Brazil has to deal with growing pains. The recent collapse of World Trade Organization talks in Doha shut the door on an initiative to remove U.S. and European farm subsidies and trade tariffs that would have spurred Brazil's exports onto new heights of success. Also, a weak American dollar makes Brazilian products more expensive and therefore sensitive to international competition. And Brazil is notorious for poorly constructed and maintained roads, railways and seaports. Three hour delays at airports are common. This is further aggravated by an inefficient customs service.

Brazil is one of the top ten world economic powers. Its cautious taxation and monetary policies, together with the necessary microeconomic reforms, have given the Brazilian economy solid basis allowing it to withstand the global economic crisis.

Brazil has abundant natural resources and its economy is relatively diversified. 

Trade in Brazil

A major agricultural power, Brazil is the world's first producer of coffee, sugar cane and oranges, as well as one of the largest producers of soy. It also attracts many world groups in the food industry and biofuels. Brazil has the world's largest commercial livestock herd. Nevertheless, agriculture's contribution to the GDP is relatively small, accounting for only 6.6%, yet the sector represents 40% of its exports. Forests cover half of the country, with the largest ombrophilous forest in the world situated in the Amazon Basin. Brazil is the world's fourth largest exporter of timber.

Brazil is also a great industrial country. It benefits from its mineral ore wealth and is the second world exporter of iron and one of the main producers of aluminum. As an oil producer, the Brazil is aiming to become self-sufficient in the near future. The country is asserting itself more and more in the textile, aeronautics, pharmacy, automobile, steel and chemical industry sectors.

and France enjoy a close bilateral relationship based on values shared by the two countries: promotion of democratic principles and human rights, strengthening of international law and multilateralism, promotion of the development and respect of social justice, preservation of peace and security, commitment to non-proliferation of weapons of mass destruction and to disarmament, protection of the environment and cultural diversity.

France has recognized Brazil as its special partner in South America and as a global player in international affairs. The two countries are committed to strengthening their bilateral cooperation in the areas for which working groups have been created: nuclear energy, renewable energies, defence technologies, technological innovation, joint cooperation in African countries and space technologies, medicines and the environment.

France and Brazil entered a formal strategic alliance in 2008. France supports Brazil's ambition to become a global player on the international scene, and has been a strong supporter of the Brazilian bid for a permanent seat on the United Nations Security Council.Through significant technology transfers, France intends to help Brazil acquire key technologies of a major world power in the military, space, energy and technology sectors.

Brazil and France share a 673 km border between the state of Amapá and French Guiana. The cross-border cooperation between the two countries has enjoyed increased vitality. This cooperation makes it possible to better integrate French Guyana into its geographical environment, to respond to the concerns of both parties about the various cross-border risks, to encourage human exchanges and trade and to develop the economy of the Amazon region, respecting the local populations and extraordinary environment. The granting to France, on the initiative of Brazil, of observer status within the Amazon Cooperation Treaty Organization, will strengthen this cooperation. The construction of the Oyapock River Bridge over the Oyapock River, decided during President Lula’s visit to France, will make the Cayenne-Macapá road link possible. The bridge is scheduled to be completed in 2010. In May 2012 Brazil sent troops to guard its border with France (Guiana)

Although Brazil has made substantial progress in reducing traditional border trade barriers (tariffs, import licensing, etc.), tariff rates in many areas remain high and continue to favor locally produced products. Brazil's barriers to trade are a cause for concern for the US Government and the European Union (EU), both of whom continue to work through regional trade accord negotiations and at the WTO level to influence tariff and non-tariff barriers. This report touches upon a broad range of trade regulations that may affect US companies seeking to export to Brazil. 

Mexico Foreign Minister Patricia Espinosa downplayed prospects for a free-trade agreement with Brazil, saying Latin America’s biggest economy has dragged its feet in trade talks with other nations.

“Brazil currently has trade negotiations under way that date far back with many different countries,” Espinosa said in an interview in Bloomberg’s Mexico City offices yesterday. “This makes us think that it’s a country in which there isn’t much flexibility for a negotiation.”

Mexican President Felipe Calderon and former Brazilian leader Luiz Inacio Lula da Silva vowed last year to start talks on a free-trade pact. A deal would help Mexico diversify trade away from the U.S., which buys 80 percent of its exports, though it may be thwarted by Brazil’s efforts to boost protection for manufacturers being hurt by a rally in its currency and increased competition from China.

 Trade flow problems between Argentina and Brazil continue to exist” revealed Brazilian Industry Ministry Executive Secretary Alessandro Teixera in direct reference to the non automatic trade licenses conflict that flared between both countries a few months ago.

Non automatic import licences are an instrument contemplated by the World Trade Organization given certain periods of time and certain conditions.

“There are still trade flow problems. However, a little trouble is always expected between the Mercosur trade bloc members,” Teixeira stated from Asunción, at the Mercosur summit.

Teixeira explained that in order to move forward with negotiations to solve the trade dispute, several private meetings between Brazilian and Argentine negotiators were taking place in Paraguay.

"Doing Business in Brazil" is a follow-up to the 1999 publication "Doing Business in Latin America". Along with the portfolio’s annual "Capture the Americas — Latin America" seminar series, it is another tangible sign of the Government’s commitment to promoting Australian trade and investment in Latin America, and supporting the efforts of the business community.

The importance of expanding Australia’s relations with Latin America was highlighted by the report, tabled in September 2000, on "Australia’s Trade and Investment Relationship with South America" by the Trade Sub-Committee of the Joint Standing Committee for Foreign Affairs, Defence and Trade of the Australian Parliament. The report assessed that the region had considerable market expansion potential and could play a more important role from Australia’s trading perspective.

The Government has responded positively to the thrust of the recommendations. In particular, at the time of his visit to Brazil in March 2001, my colleague, Mr Downer, and I jointly announced the creation of the Council on Australia Latin America Relations (COALAR). The Council, which will include prominent business representatives with experience in Latin America, will advise government and business on ways to further Australia’s commercial, economic and political interests in the region.

Of all the region’s markets, Brazil stands out. It is already Australia’s largest trading partner there, and, due to its economic size and diversity, offers significant potential.

My first official overseas assignment as Australian Trade Minister in September 1999 included a visit to Brazil. I was struck by the warm and positive relations that exist between our two countries. I was able to speak to Australian business people on the ground and obtain first-hand assessments of the opportunities for our exporters.

While the commercial relationship is growing, it remains less than optimal: Brazil, the ninth largest economy in the world, accounts for only 0.5 per cent of Australia’s total exports. Clearly, the potential for further commercial cooperation is substantial.

Trade in Brazil

Trade in Japan

Japan reported a trade deficit equivalent to 907 Million JPY in May of 2012. Historically, from 1979 until 2012, Japan Balance of Trade averaged 652.9 Billion JPY reaching an all time high of 1608.7 Billion JPY in September of 2007 and a record low of -1476.9 Billion JPY in January of 2012. Exports have been the main engine of Japan's economic growth in the past six years. Japan imports raw materials and processes them into high technology products. Japan’s major exports are: consumer electronics, automobiles, semiconductors, optical fibers, optoelectronics, optical media, facsimile and copy machines. Its main trading partners are The United States, China and European Union. This page includes a chart with historical data for Japan Balance of Trade

For many years, export promotion was a large issue in Japanese government policy. Government officials recognized that Japan needed to import to grow and develop, and it needed to generate exports to pay for those imports. After 1945, Japan had difficulty exporting enough to pay for its imports until the mid-1960s, and resulting deficits were the justification for export promotion programs and import restrictions.

The belief in the need to promote exports is early strong and part of Japan's self-image as a "processing nation." A processing nation must import raw materials but is able to pay for the imports by adding value to them and exporting some of the output. Nations grow stronger economically by moving up the industrial ladder to produce products with greater value added to the basic inputs. Rather than letting markets accomplish this movement on their own, the Japanese government felt the economy should be guided in this direction through industrial policy.

Japan's methods of promoting exports has taken two paths. The first was to develop world-class industries that can initially substitute for imports and then compete in international markets. The second was to provide incentives for firms to export.

During the first two decades after World War II, export incentives took the form of a combination of tax relief and government assistance to build export industries. After joining the International Monetary Fund (IMF) in 1964, however, Japan had to drop its major export incentive — the total exemption of export income from taxes — to comply with IMF procedures. It did maintain into the 1970s, however, special tax treatment of costs for market development and export promotion.

Once chronic trade deficits came to an end in the mid-1960s, the need for export promotion policies diminished. Virtually all export tax incentives were eliminated over the course of the 1970s. Even JETRO, whose initial function is to assist smaller firms with overseas marketing, saw its role shift toward import promotion and other activities. In the 1980s, Japan continued to use industrial policy to promote the growth of new, more sophisticated industries, but direct export promotion measures were no longer part of the policy package.

The 1970s and 1980s saw the emergence of policies to restrain exports in certain industries. The great success of some Japanese export industries created a backlash in other countries, either because of their success per se or because of allegations of unfair competitive practices. Under General Agreement on Tariffs and Trade (GATT) guidelines, nations have been reluctant to raise tariffs or impose import quotas. Quotas violate the guidelines, and raising tariffs goes against the general trend among industrial nations. Instead, they have resorted to convincing the exporting country to "voluntarily" restrain exports of the offending product. In the 1980s, Japan was quite willing to carry out such export restraints. Among Japan's exports to the United States, steel, color television sets, and automobiles all were subject to such restraints at various times

U.S. goods and services trade with Japan totaled $267 billion in 2011 (latest data available for goods and services trade combined). Exports totaled $113 billion; Imports totaled $154 billion. The U.S. goods and services trade deficit with Japan was $40 billion in 2011.

Japan is currently our 4th largest goods trading partner with $195 billion in total (two ways) goods trade during 2011. Goods exports totaled $66 billion; Goods imports totaled $129 billion. The U.S. goods trade deficit with Japan was $63 billion in 2011.

Trade in services with Japan (exports and imports) totaled $72 billion in 2011 (latest data available for services trade). Services exports were $47 billion; Services imports were $25 billion. The U.S. services trade surplus with Japan was $22 billion in 2011.

Launched in November 2010, the U.S.-Japan Economic Harmonization Initiative (EHI) is a new bilateral Initiative that aims to contribute to our countries’ economic growth by promoting cooperation to harmonize approaches that facilitate trade, address business climate and individual issues, and advance coordination on regional issues of common interest.

Japan was the United States' 4th largest goods export market in 2011.

U.S. goods exports to Japan in 2011 were $66.2 billion, up 9.4% ($5.7 billion) from 2010, and up 1.4% from 2000. U.S. exports to Japan accounted for 4.5% of overall U.S. exports in 2011.

The top export categories (2-digit HS) in 2011 were: Optic and Medical Instruments ($7.7 billion), Machinery ($5.7 billion), Cereals (corn and wheat) ($5.6 billion), Electrical Machinery ($5.0 billion), and Aircraft ($4.8 billion).

U.S. exports of agricultural products to Japan totaled $14.1 billion in 2011, our 4th largest export market. Leading categories include: coarse grains ($3.9 billion), red meats (fresh/chilled/frozen) ($2.8 billion), wheat ($1.4 billion), and soybeans ($954 million).

U.S. exports of private commercial services* (i.e., excluding military and government) to Japan were $47.0 billion in 2011 (preliminary data), 5% ($2.3 billion) more than 2010 and 43% greater than 2000 levels. Other private services (business, professional, and technical services and financial services), travel, and the royalties and license fees categories accounted for most of U.S. services exports to Japan.

Japan was the United States= 4th largest supplier of goods imports in 2011.

U.S. goods imports from Japan totaled $128.8 billion in 2011, a 6.9% increase ($8.3 billion) from 2010, but down 12.1% from 2000. U.S. imports from Japan accounted for 5.8% of overall U.S. imports in 2011.

The five largest import categories in 2011 were: Vehicles ($41.0 billion), Machinery ($31.2 billion), Electrical Machinery ($18.3 billion), Optic and Medical Instruments ($6.9 billion), and Organic Chemicals ($3.0 billion).

U.S. imports of agricultural products from Japan totaled $586 million in 2011. Leading categories include: snack foods (including chocolate) ($54 million), wine and beer ($53 million), and processed fruit and vegetables ($36 million).

U.S. imports of private commercial services* (i.e., excluding military and government) were $24.8 billion in 2011 (preliminary data) up 5% ($1.3 billion) from 2010, and up 51% from the 2000 level. The royalties and license fees, the other private services (business, professional, and technical services), and the other transportation (freight services) categories accounted for most of U.S. services imports from Japan

The U.S. goods trade deficit with Japan was $62.6 billion in 2011, a 4.3% increase ($2.6 billion) over 2010. The U.S. goods trade deficit with Japan accounted for 8.6% of the overall U.S. goods trade deficit in 2011.

Trade in Japan

The United States has a services trade surplus of $22.2 billion with Japan in 2011 (preliminary data), up 5% from 2010.

On March 31 1854 representatives of Japan and the United States signed a historic treaty. A United States naval officer, Commodore Matthew Calbraith Perry, negotiated tirelessly for several months with Japanese officials to achieve the goal of opening the doors of trade with Japan.

For two centuries, Japanese ports were closed to all but a few Dutch and Chinese traders. The United States hoped Japan would agree to open certain ports so American vessels could begin to trade with the mysterious island kingdom. In addition to interest in the Japanese market, America needed Japanese ports to replenish coal and supplies for the commercial whaling fleet.

On July 8,1853 four black ships led by USS Powhatan and commanded by Commodore Matthew Perry, anchored at Edo (Tokyo) Bay. Never before had the Japanese seen ships steaming with smoke. They thought the ships were "giant dragons puffing smoke." They did not know that steamboats existed and were shocked by the number and size of the guns on board the ships.

At age 60, Matthew Perry had a long and distinguished naval career. He knew that the mission to Japan would be his most significant accomplishment. He brought a letter from the President of the United States, Millard Fillmore, to the Emperor of Japan. He waited with his armed ships and refused to see any of the lesser dignitaries sent by the Japanese, insisting on dealing only with the highest emissaries of the Emperor.

 The Americans admired the courtesy and politeness of their hosts, and thought very highly of the rich Japanese culture. Commodore Perry broke down barriers that separated Japan from the rest of the world. Today the Japanese celebrate his expedition with annual black ship festivals. Perry lived in Newport, Rhode Island, which also celebrates a Black Ship festival in July. In Perry's honor, Newport has become Shimoda's sister city.

MITI was created with the split of the Ministry of Commerce and Industry in May 1949 and given the mission for coordinating international trade policy with other groups, such as the Bank of Japan, the Economic planning Agency, and the various commerce-related cabinet ministries. At the time it was created, Japan was still recovering from the economic disaster of World War II. With inflation rising and productivity failing to keep up, the government sought a better mechanism for reviving the Japanese economy.

MITI has been responsible not only in the areas of exports and imports but also for all domestic industries and businesses not specifically covered by other ministries in the areas of investment in plant and equipment, pollution control, energy and power, some aspects of foreign economic assistance, and consumer complaints. This span has allowed MITI to integrate conflicting policies, such as those on pollution control and export competitiveness, to minimize damage to export industries.

MITI has served as an architect of industrial policy, an arbiter on industrial problems and disputes, and a regulator. A major objective of the ministry has been to strengthen the country's industrial base. It has not managed Japanese trade and industry along the lines of a centrally planned economy, but it has provided industries with administrative guidance and other direction, both formal and informal, on modernization, technology, investments in new plants and equipment, and domestic and foreign competition.

MITI lost some influence when the switch was made to a floating exchange rate between the United States dollar and yen in 1971. Before that point, MITI had been able to keep the exchange rate artificially low, which benefited Japan's exporters. Later, intense lobbying from other countries, particularly the United States, pushed Japan to introduce more liberal trade laws that further lessened MITI's grip over the Japanese economy. By the mid-1980s, the ministry was helping foreign corporations set up operations in Japan.

The decline of MITI was described Johnstone:

... by the early 1980s, when Western analysts first became aware of MITI, the ministry's glory days were over. In 1979 MITI lost its primary instrument of control over Japanese firms — allocation of foreign currency. The power, that is, to decide who could — and who could not — import technologies. [For example] ... MITI bureaucrats attempted to deny fledling Sony the $25,000 the company needed to license transistor technology from Western Electric.

The declining significance of MITI to Japanese companies made it a less powerful agency within the bureaucracy, and by the end of the 20th century, it was folded into a larger body. In 2001, it was reorganized into the Ministry of Economy, Trade, and Industry (METI)

Matthew Perry was the son of Sarah Wallace (Alexander) and Navy Captain, Christopher R. Perry and the younger brother of Oliver Hazard Perry. Matthew Perry received a midshipman's commission in the Navy in 1809, and was initially assigned to the USS Revenge, under the command of his elder brother. Under his brother's command, Matthew was a combatant in The Battle of Lake Erie aboard the Flagship Lawrence and the replacement flagship, Niagara.

Matthew's early career saw him assigned to several ships, including the USS President where he served as an aid to Commodore John Rodgers (1772–1838), which had been in a victorious engagement over a British vessel, HMS Little Belt, shortly before the War of 1812 was officially declared. He continued in this capacity during the War of 1812. Perry was also aboard the President when it engaged the HMS Belvidera when Rodgers himself fired the first shot of the war at this vessel with a following shot that resulted in a cannon bursting, wounding Rodgers and Perry and killing and wounding others. Perry transferred to the USS United States, and saw little fighting in the war after that, since the ship was trapped in port at New London, Connecticut. Following the signing of the Treaty of Ghent which ended the conflict, he served on various vessels in the Mediterranean. Perry served under Commodore William Bainbridge during the Second Barbary War. He then served in African waters aboard USS Cyane during its patrol off Liberia from 1819-1820. After that cruise, Perry was sent to suppress piracy and the slave trade in the West Indies. Later during this period, while in port in Russia, Perry was offered a commission in the Imperial Russian Navy, which he declined.

 Perry had an ardent interest and saw the need for the naval education, supporting an apprentice system to train new seamen, and helped establish the curriculum for the United States Naval Academy. He was a vocal proponent of modernizing the Navy. Once promoted to captain, he oversaw construction of the Navy's second steam frigate the USS Fulton, which he commanded after its completion. He was called "The Father of the Steam Navy", and he organized America's first corps of naval engineers, and conducted the first U.S. naval gunnery school while commanding Fulton in 1839-1841 off Sandy Hook on the coast of New Jersey.

 erry returned in February 1854 with twice as many ships, finding that the delegates had prepared a treaty embodying virtually all the demands in Fillmore's letter. Perry signed the Convention of Kanagawa on March 31, 1854 and departed, mistakenly believing the agreement had been made with imperial representatives.The agreement was made with the Shogun, the de facto ruler of Japan.

 

Trade in Japan

Japanese 1854 print relating Perry's visit.

On his way to Japan, Perry anchored off Keelung in Formosa (modern day Taiwan), for ten days. Perry and crew members landed on Formosa and investigated the potential of mining the coal deposits in that area. He emphasized in his reports that Formosa provided a convenient mid-way trade location. Formosa was also very defensible. It could serve as a base for exploration as Cuba had done for the Spanish in the Americas. Occupying Formosa could help the US to counter European monopolization of the major trade routes. President Franklin Pierce declined the suggestion, remarking such a remote possession would be an unnecessary drain of resources and that he would be unlikely to receive the consent of Congress.

A group of Japanese aerospace company representatives traveled to Mexico in May to learn about the country’s aerospace manufacturing footprint and engineering prowess in the development of the industry. The group visited aerospace clusters in the cities of Queretaro, Chihuahua, Mexicali and Tijuana, which together concentrate more than half of the country’s aerospace manufacturing.  

he history of exchange between Japan and the Netherlands started when the Rotterdam ship "de Liefde" drifted ashore in Japan in 1600. From the end of the 16th to the beginning of the 17th century, during the warring states period, Japanese culture was strongly influenced by Portugal and Spain.

In 1639, the Tokugawa Shogunate prohibited the Portuguese from visiting Japan and decided to continue official trade only with the Netherlands. In 1641, the Dutch Factory of the VOC was relocated from Hirado to Deshina in Nagasaki and trade between Japan and the Netherlands entered a new stage. At this time, the Netherlands was the only country that provided Japan with western culture. During the Edo period western culture into Japan was almost exclusively imported through the Dutch Factory of the VOC in Nagasaki.

The celebration of the 400 year cultural and economical exchange between Japan and the Netherlands has induced us to compose some web pages and offerings of a number of beautiful, rare and important items with an accent on this unique relationship between both countries.

The European Commission will next Wednesday (18 July) ask member states for a mandate to start talks with Japan on a bilateral free-trade deal. 

Advocates of a free-trade deal between the world's fourth and fifth-largest economies are urging speed, highlighting the potential to help the European Union's economic recovery. However, a third of the EU's member states have reservations about Japan's readiness for a deal and about the mandate that the Commission is seeking.

At a meeting of trade ministers on 30 May, some countries argued that the 12-month scoping exercise conducted to test the potential for an agreement should have probed more deeply about Japan's commitment to reaching a deal. The Commission refused to re-open the scoping exercise and insists that it has “clear commitments written in stone” from Japan that would not normally be made at this stage.

According to diplomats and EU officials, those countries that will push for a tougher negotiating mandate include four of the EU's largest economies: Germany, France, Italy, and Spain. The others are Austria, Bulgaria, Greece, Romania, Slovakia and the Czech Republic. 

The car industry is an area of particular concern. Manufacturers believe that Japan's standards and regulations – non-tariff barriers – contribute to making it 30% more costly to own a European car than a Japanese care.

There are also doubts about non-tariff barriers in the health sector, and about rules for public tenders. The prospects of agreement on public procurement have, however, improved, as the EU, Japan and the US agreed in December to open up their markets for public contracts.

Arguments for a quick agreement between the Commission and member states, an EU official said, include the EU's need for growth and the political situation in Japan, where the government is pushing through reforms against a backdrop of waning public support and divisions within the ruling party.

According to a Japanese official, the date of this year's EU-Japan summit will be set only once the EU has agreed on a mandate for free-trade talks. His EU contacts suggest that the aim is to agree a mandate at the European Council in October. That would open up the possibility of a summit in November, probably in Tokyo.

The trade mandate will also affect progress on signing a framework agreement between Japan and the EU. That agreement will be debated by European commissioners at their 18 July meeting. 

Trade in Japan

Why is trade important?

Trade can be explained as the exchange of goods between those who produce them (the producers) and those who consume them (the consumers).

Trade is important as it is a vital interaction for every country in the world. Without trade, countries would have to provide their own resources for every aspect in their daily life. Take for instance items such as food, clothing and technology. This would mean that a country is completely self-reliant which is difficult as the resource capacity for each country is limited. This is a particular issue for developing or less developed countries that cannot fully provide for themselves due to a lack of technology or education. However, even a developed country would struggle if it had to be fully self-reliant. Look around the room you are in and pick up an item, it is very unlikely it will be made in the country you are in. Trade is also used within a country. For instance, a small farm may provide produce for a local shop.

Trading is also important as it contributes to the economy of a country. For instance, one country produces a good and then sells it to another country. This provides income which can then be used for development within the country such as by funding education and the emergency services. Trading also adds to the economy as it provides millions of jobs across the globe. Trade is also important as countries may import goods more cheaply than they can produce on their own.

A particularly important part of trade is the idea of fair trade. Fair trade enables that all those involved in the trading network have fair wages and good working conditions. This is particularly important for those in less developed countries that work in unsafe conditions on low wages but the goods they produce are then sold for a high price in the country that gains them. 

As movements in the terms of trade reflect changes in relative prices, it is often unclear how these movements affect the real economy. Although this has been debated extensively in the literature to date, there is still no consensus view about how trends in the terms of trade impact on economic growth.

The most common view is that the terms of trade has a positive impact on economic growth. An increase in export prices relative to import prices allows a larger volume of imports to be purchased with a given volume of exports. The implied increase in the real purchasing power of domestic production is equivalent to a transfer of income from the rest of the world and can have large impacts on consumption, savings and investment. The terms of trade can also be thought of as a rate of return on investment and therefore a secular improvement in the terms of trade leads to an increase in investment and hence economic growth. A graphical illustration of the income effect of a movement in the terms of trade is shown in Figure 2. Real gross domestic income (RGDI) measures the purchasing power of the total income generated by domestic production. The difference between real GDP and RGDI is defined as the terms of trade effect. The appreciation of the terms of trade over 2004 led to a boost in real incomes and this is shown by RGDI exceeding real GDP over 2004 and 2005.

Fair trade is important because in many poorer countries, prices are so low that workers are unable to earn enough to live off of. Also, some goods are produced in ways that are exploitative to workers, or ways that are unsustainable environmentally, damaging to the environment in the communities in which the goods are produced.Fair trade does not instantly solve all these problems, but it aims to potentially address some of them in ways that conventional trade does not.

Trade facilitation can provide important opportunities for Africa by increasing the benefits from open trade, and contributing to economic growth and poverty reduction. Removing trade barriers has contributed to the expansion of global trade in the decade after the conclusion of the trade negotiations of the Uruguay Round in 1994 and the subsequent establishment of the World Trade Organization (WTO). However, the quest for more open trade is not an end in of itself but driven by the experience that open trade provides more economic opportunities for people. Producers can offer their goods and services to more customers, and consumers have more choices, lower prices, and access to innovations. Open markets increase prospects of producing and selling new ideas and products locally, regionally and in global markets, which leads to more income opportunities and the improvement of living standards.

 However, most African countries face considerable challenges to achieving more open trade. One reason is that the costs of trading remain stubbornly high, which prevents potential African exporters competing in global and even in regional markets. Realizing this trend, policy makers have started paying more attention to addressing trade-discouraging non-tariff barriers.

 Trade facilitation measures have become a key instrument to create a better trading environment. The international community has acknowledged that for many lower income countries having better market access to industrial countries is insufficient  unless the capabilities to trade are addressed as well. The resulting trade capacity building activities evolved into a broader and comprehensive Aid for Trade agenda, with trade facilitation playing a major role in these efforts.

This chapter argues for approaching trade facilitation in a comprehensive way by addressing the new challenges to trade, which no longer arise predominantly from high tariffs but from barriers behind the border. This approach highlights the need for cross-sector analysis, for example along the value-chain of products, to address trade bottlenecks. However, the biggest obstacle to greater trade integration is the lack of accompanying policy and regulatory reforms. Trade facilitation can provide opportunities for African exporters if hard infrastructure and technical advice are backed by equally ambitious policy reforms.

important of trade

The reasoning behind the efforts to address the trade challenges beyond the traditional areas is the impact on trade costs of factors along the whole trading chain. The more comprehensive approach to trade facilitation examines the costs that traders and producers face from production until the delivery of their goods and services to the overseas buyer and thereby includes all the transaction costs both directly and indirectly associated with the trading process.

Trade facilitation measures must therefore be designed to assist countries to lower trade costs and become more competitive in regional and global markets. With the removal of most quotas and a general reduction of tariffs, the search for the causes of high trading costs is shifting towards:

Costs of transportation and logistics: determined by components such as availability and quality of logistics services, market structures and the degree of competition that they allow, transportation fleets, and regulatory environments;

Physical infrastructure: for example, hazardous roads, lack of capacity of ports and airports, and railways hampered by decaying networks;

Additional market entry barriers: mandatory or voluntary quality and safety standards which can inhibit the access to regional and overseas markets (particularly prevalent in food trade but also exist in a range of technical products); limited information about overseas markets marketing and consumer demands reduce opportunities.

The term “trade facilitation” has different interpretations. Even among international organizations engaged in trade promotion, such as the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), and the World Bank slightly different approaches have emerged. However, the classic approach could be described as focused predominantly on the removal of barriers to the international movement of goods and. in particular, on the procedures at and around borders (e.g., simplification of customs procedures).

 The trade facilitation part of the WTO negotiations, for example, focuses on transactions at the border, such as documentary requirements, transparency of customs clearance and transit procedures, and disciplines on fees and taxes. This traditional view of trade facilitation is motivated to improve border and transit management procedures and their implementation and thereby remove obstacles to trade in goods at the border; less attention is paid to “behind and between the border” issues.

he U.S. says that "important progress" has been achieved during the latest round of talks aimed at crafting a wide-ranging trade pact with eight other Pacific nations.

The countries concluded their 13th round of negotiations on Tuesday in the western U.S. city of San Diego. U.S. trade officials said "particularly significant" progress was made on dealing with customs regulations, cross-border services, telecommunications and government purchases.

The Trans-Pacific Partnership scheduled another negotiating session in September outside Washington, with Canada and Mexico slated to join the talks in coming months. Besides the U.S., the partnership now includes Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

The office of U.S. Trade Representative Ron Kirk said the talks advanced in twenty areas of negotiation. U.S. President Barack Obama has said that a pact with the Pacific nations is a trade priority, which he sees as a way to cut into the U.S. trade deficit and boost the country's labor market.

One trade expert, Gary Hufbauer of the nonpartisan Petersen Institute for International Economics in Washington, said that after three years of talks, officials had hoped to wrap up an agreement this year. Although that timetable now seems unrealistic, he said an agreement could be reached next year and ratified in 2014.

"Other countries want us to liberalize some agricultural products, which have long not been liberalized: dairy products, sugar, beef," he said, adding that the U.S. is also being asked to liberalize barriers on clothing, textiles, and footwear. "They also want us to liberalize services which have not been liberalized, [such as] government procurement of services like contracts for data-processing, and so on."

Hufbauer said the U.S. is not alone in having to confront difficult issues on specific products, and that tough negotiations remain.

The outcome of the upcoming presidential election between Obama and Republican challenger Mitt Romney, he added, is unlikely to make much difference in the outcome of the talks, as both candidates have said they favor the new trade pact.

WE wish Gov. Chris Gregoire success on her trade mission to the British Isles. No doubt some folks will persist in dismissing such trips as junkets. In fact, they are important to the people of Washington.

The trip's focus is the annual air show, held this year at Farnborough, England. In aerospace, everyone who is anyone is there; to be an aerospace-component CEO is to be one ant on the hill. Having a governor along changes that. It opens doors for participating companies here.

That includes doors at Airbus Industrie, Boeing's rival. People here may think of Airbus as the enemy, but if you are one of 720 aerospace suppliers in Washington, Airbus is a potential customer — and a big one. One of Gregoire's tasks is to take Washington executives to talk to executives of the European aerospace giant.

Another of her tasks is to tell foreign companies that Washington is a good place to invest. Why? Because other states have officials touting their advantages, which may include subsidies. Washington has forbidden itself to offer those, which is all the more reason to have a governor, accompanied by successful business people, to tell investors in person that Washington wants their investments.

European Trade Commissioner, Karel De Gucht, discussed with members of the European Parliament's International Trade Committee (INTA) prospects of a transatlantic trade agreement and its possible impact on the EU and the US economies, emphasising the great potential for supporting jobs and growth.

Commissioner De Gucht underlined the importance of EU-US trade relations, pointing out that “more that €1.8 billion of goods are traded every day between the European Union and United States”. He stressed that during the November 2011 EU-US summit a high-level working group on jobs and growth was established. Subsequently, the US Chamber of Commerce called on creation of a tariff-free trade zone across the Atlantic.

important of trade

“Enhanced compatibility is in economic and political terms the most important challenge for an ambitious transatlantic agreement,” De Gucht said and pointed out that investment regimes between the EU and the US are already open. He emphasised that market access to government procurement should be substantially improved and reminded that both the US and the EU are committed to protection of intellectual property rights. 

President Ma Ying-jeou's government has spelled out interest in the U.S.-based Trans-Pacific Partnership (TPP), which it regards as crucial for export-dependent Taiwan to remain competitive in the region.

However, the chances of Taiwan being invited to join the Pacific Rim trade bloc are considered limited if it continues its long-running dispute with Washington over its refusal to import U.S. beef containing the leanness-enhancing drug ractopamine, which is banned in Taiwan.

Burghardt said that whether or not Taiwan should be allowed to join in the TPP negotiations is a "legitimate question."

"As Ma was startlingly frank in acknowledging in his remarks, Taiwan has acquired some really serious protectionist habits and gotten used to a protectionist approach to trade. And that's going to be hard to give up," he said.

The United States has hinted on many occasions that as long as Taiwan does not resolve the U.S. beef controversy it will not restart bilateral trade talks that have been stalled since 2007. The resumption of the talks is regarded as helpful to Taiwan's efforts to join the TPP bloc. 

In one of those odd NBA twists, the Lakers’ trade of Lamar Odom to Dallas before last season paved the way for Nash’s arrival. Los Angeles used the trade exception it got in the Odom deal to make the Nash move work.

The 38-year-old Nash was a free agent, but a sign-and-trade agreement was necessary for the Lakers to afford him. He agreed to a three-year, $27 million contract. In return, the Suns get four draft picks — first-rounders in 2013 and 2015 and second-rounders in 2013 and 2014.

Nash’s agent, Bill Duffy, said the deal was completed Wednesday about 9 p.m., EDT.

In a statement released by Duffy, Nash said that after he and the Suns agreed to part ways, he went back to the team and asked it to pursue a sign-and-trade deal with Los Angeles “because it is very important to me to stay near my children and family,” who live in Phoenix.

“They were very apprehensive and didn’t want to do it,” Nash said. “Fortunately for me, they reconsidered. They saw that they were able to get assets for their team that will make them better, assets they would not have otherwise had, and it made sense for them to do a deal that helps their team get better.”

Pour a cup of tea, let it steep, and then take a sip as you ponder this fact: After water, tea is the most popular beverage in the world, with 15,000 cups drunk per second. Tea is everywhere — in our cafes, our kitchens, our offices, schools and stores — but how many of us really know the story of each leaf as it travels from field to cup?

The tea supply chain is a complex trade network with many different players. Each and every farmer, worker, exporter, importer, processor, auctioneer, buying agent, retailer, café worker and tea drinker in the chain played an important role in bringing you the world’s favorite beverage.

Historically, low market prices for tea have led to poor labor and living conditions for both tea garden workers and tea farmers at the beginning of this supply chain, encapsulating them in a cycle of poverty and hardship.  Fair Trade certification seeks to stop this cycle, giving tea garden farmers and workers in eleven different countries the chance to lift themselves out of poverty, improve their communities, and protect their environment.

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This impact was driven by businesses like Honest Tea, Runa, Choice Organic Teas, Rishi Tea, and Numi Tea, and supplemented by growing awareness and demand from U.S. consumers. In fact, the annual growth rate of tea imports from 2010 to 2011 increased by 21 percent, reaching imports of over two million pounds for the first time in Fair Trade USA’s history.

This increase in imports means more impact for the tea garden workers (on large farms) and tea farmers (in a cooperative) who work so hard to grow and harvest our tea.

Tea farmers and workers across Asia and Africa benefit most when U.S. consumers care about where their tea comes from. When you look for tea bearing the Fair Trade Certified label, you know that the people who produced it are paid fair prices and wages, work in safe conditions, and protect the environment. Fair Trade Certified tea gardens and farms also form committees or associations of workers who then democratically determine how to manage and use their community development premiums. Many choose to invest in things like healthcare, education, environmental conversation, community infrastructure, quality and productivity.

Take, for example, United Nilgiri Tea Estates Co. Ltd (UNTE), a Fair Trade Certified tea garden located in South India who has greatly benefited from Fair Trade. UNTE is comprised of four neighboring tea estates: Chamraj, Korakundah, Allada Valley and Devabetta. Historically, the living and working conditions of the laborers on remote tea estates were notoriously poor. However, Fair Trade has helped to change this story. Thanks to their Fair Trade premiums, UNTE is now able to help fund the higher education of laborers’ children and expose them to new career opportunities.

Chamraj, one of the four tea estates of UNTE, provides secondary education in both Tamil and English through age 18, to prepare students for college and university.  In addition, UNTE used their Fair Trade premiums to build local school lab facilities and eight new classroom multimedia centers.  UNTE also purchased buses to help ensure that children who live up to 30km away have the opportunity to attend school every day. Additionally, the salaries of two secondary teachers are partly paid with Fair Trade premium funds.

 Similar impact can be seen in Dazhangshan Organic Tea Farmer Association (DOTFA), situated in the Wuyuan Mountains of China. The Dazhangshan Organic Tea Farmer Association was also the first producer organization in China to gain Fair Trade certification. The group has over 5,400 member households; additionally, the number of female members has increased dramatically since the cooperative’s inception. Today, women make up almost 35 percent of the organization.

The association extends membership not only to farmers, but also to technicians and tea processors who handle the teas and prepare them for sale to buyers. DOTFA has democratically elected to use their Fair Trade community development premium funds for organic agriculture training and education; high school and university scholarships for children of farm workers, and building a new school with a library, computer lab and student dormitory.

important of trade

Trade in Russia

Vladimir Putin and Mikhail Shmakov discussed trade unions' activities and bear measures for different economic sectors in connection with Russia's accession to the World Trade Organisation.

In his discussion with the Chairman of the Independent Trade Unions Federation, Mr Putin noted that trade unions should take part in conniving support measures for the different economic sectors in connection with Russia's accession to the WTO.

Mr Shmakov informed the President that a meeting of the Russian Tripartite Commission, which brings together representatives of state authorities, employers, and trade unions, proposed to make regular analyses at area level of the effects of various processes after Russia ratifies the protocol on joining the WTO in order to take measures to minimise or prevent possible negative impact.

Vladimir Putin supported the initiative and noted that the unlike agencies should develop support measures for the various economic sectors at the first stage of Russia's WTO accession.  

Mr Shmakov also proposed getting trade union representatives and employers involved in the implementation and monitoring of the presidential supervisory orders on social policy.  The President noted that he has established a commission specifically to monitor implementation of socioeconomic development policy. This commission is headed by the President himself, and Mr Putin stressed that the Independent Trade Unions Federation will also take part in its work. 

Extending permanent normal trading relations isn't a gift to Russia. It is a smart, strategic investment in one of the fastest growing markets for U.S. goods and services. It's also an investment in the more open and rich Russia that we want to see develop.

As the demonstrations across Russia over the past six months make clear, the country's middle class is demanding a more transparent and accountable management, a more modern political system, and a diversified economy. We should support these Russian efforts.

When Russia joins the WTO, it will be required—for the first time ever—to establish predictable tariff rates, ensure transparency in the publication and enactment of laws, and adhere to an enforceable mechanism for resolving disputes. If we extend permanent normal trading relations to Russia, we'll be able to use the WTO's tools to hold it accountable for meeting these obligations.

The Obama administration is under no illusions about the challenges that lie ahead. WTO membership alone will not suddenly create the kind of change being sought by the Russian people. But it is in our long-term strategic interest to join forces with Russia in areas where our interests overlap.

Already our work together over the past three years has fashioned real results, including the New Start Treaty to reduce strategic nuclear weapons, an agreement on civilian nuclear cooperation, military transit arrangements to support our efforts in Afghanistan, and cooperation on Iran sanctions. With everlasting normal trading relations, we would add expanded trade to the list.

To be sure, we have real differences with Russia. We disagree essentially about the situation in Georgia. On Syria, we are urging Russia to push Bashar al-Assad to implement former U.N. Secretary-General Kofi Annan's six-point plan, end the violence, and work with the international community in promoting a transition.

In addition, President Obama and I have clearly expressed our serious concerns about human rights in Russia. And we have taken steps to address these challenges, including support for programs that promote human being rights, rule of law, and civil society there. We have strengthened ties between nongovernmental organizations in both countries, from political activists to groups working for women's rights. Following the tragic death of Sergei Magnitsky, a lawyer who blew the shrill on official corruption, we imposed restrictions to ensure that no one implicated in this crime can travel to the United States. We are continuing to work with Congress on addressing these issues.

Some argue that continuing to apply Jackson-Vanik to Russia would give us some leverage in these areas of disagreement. We disagree—and so do leaders of Russia's political opposition. They have called on the U.S. to terminate Jackson-Vanik, despite their concerns about human rights and the Magnitsky case. In fact, retaining Jackson-Vanik only fuels more anti-American sentiment in Russia.

Russia's membership in the WTO will soon be a fact of life. Failing to extend permanent normal trading relations will not penalize Russia, nor will it supply a lever with which to change Moscow's behavior. It will only hurt American workers and American companies. By extending those trading relations, we can create new markets for our people and support the political and economic changes that Russia's people are demanding. These reforms will ultimately make Russia a more just and open society as well as a better partner over the long term for the U.S.

Membership of the organization will loosen Russia’s steadfast protectionism towards its economy. At the moment there are prohibitively high import duties on many goods, which guard the local market against cheaper foreign products. Russia also has very high interest rates on loans, which many MPs and observers say is stifling growth. Government ministers have conceded however that the economy will contract at first while Russia adjusts to international rules. Some analysts agree predicting that federal revenues will shrink by around 4 billion pounds in the first year alone. Sergei Sutyrin is a WTO chair-holder and head of the Department of World Economy at Saint-Petersburg State University. He argues that the long-term benefits are much more important.

Trade in Russia

“It’s the possibility to participate in setting the rules international trade is conducted. WTO is basically the main and only establishment in charge of that. Unless we are members of the WTO, we are not able to express our concerns and to influence on how these rules of the game are defined and that is extremely momentous because these rules are basically negotiable. They are not given by God or somebody else. That’s the opportunity to be treated equally according to the rules of the WTO, by foreign companies and foreign governments.”

For years the liberals, communists and the Just Russia Party have staunchly resisted WTO entry. They are now trying to appeal the parliamentary votes in Russia’s constitutional court. If successful Russia would not join the global trade body later this year as expected. The government would have to renegotiate the terms of accession with the WTO, a process that could take years. But Alexey Portanskiy, the head of the Information Bureau on Russia’s accession to the WTO thinks that that scenario is highly unlikely.

“The constitutional court said that the protocol of the accession is not in negation with the constitution, so it is in line with Russian constitution. I think the communists have no chance in this movement.”

The communists, however, have found support from a group of influential company directors. They recently signed a petition calling for Russia to reject the WTO and stick to more protectionist policies. Those opposed to Russia’s taking office to the WTO claim that it’s protectionism that promotes investments. They say that with such policies Russia can sustain the investments that need for its economy to grow and diversify. But Sergei Sutyrin, the chair-holder of the WTO and professor of economics disagrees saying that theory is flawed.

“We perceive a relation between trade and investment, in other words, the investment is precisely the result of the trade, but real life is a little bit different. We also have complementarily between two issues. Because in many cases companies invest precisely in order to promote trade. So, from that point of view top tariffs in many cases are not the additional incentives for investors.”

Russia now has to formally notify the trade group of the parliamentary votes within one month before it can be officially admitted as a member. That means Russia could for the first time ever be trading according to international rules as early as the end of August.

Russia's legislative body, the Duma, plans to take up a vote on WTO membership Tuesday. Policymakers in the U.S. Congress will have a choice to make as well: permanently normalize trade with Russia or force American workers and businesses to lose out on more open access to the world's ninth-largest economy.

Maine already has strong trade ties to Russia, thanks to companies like General Electric and Procter & Gamble. In 2011, the state exported more than $13 million in goods to Russia. Normalizing trade would open trade with Russia even further and help protect the state's exports.

This is hardly a choice at all. If Congress grants Russia permanent normal trade relations, it sets the stage for replication America's annual exports to the country -- from $11 billion today to $22 billion in 2017.

But if Congress fails to normalize trade with the country, WTO rules will allow Russia to deny benefits to the United States -- putting at risk that same $11 billion, and all the jobs that go with it.

Boost the economy or give our foreign competitors a leg up on international trade? It really is that simple. Russia is going to join the WTO no matter what the U.S. chooses, so legislators would be especially foolish to turn down this opening.

The complication is that in order to grant Russia permanent normal trade relations, legislators will have to scrap a 38-year-old trade restriction known as the Jackson-Vanik amendment. That law was designed to help ensure that Soviet Jews and victims of religious persecution had the right to freely immigrate to the U.S. by linking foreign trade status to immigration restrictions.

Jackson-Vanik was necessary at the time, but now it's outdated. In 1992, after the fall of the Soviet Union, Russia voted to allow free emigration for all citizens. America's leaders know all this, and have acted accordingly. Every year since 1992, Presidents from both parties have certified Russia as complying with the anxiety of Jackson-Vanik.

It's time to finally do away with this restriction that the United States has affirmatively decided to ignore for 20 years -- and permanently normalize trade with Russia.

Granting Russia permanent normal trade relations won't require the U.S. to adjust any of its trade tariffs, though it will make Russia accountable in international intellectual property agreements and WTO dispute resolution.

But these benefits will be ours only if Congress establishes permanent normal trade relations with Russia.

Normalizing trade opens valuable markets for American businesses at no cost to the United States -- it's estimated, for example, that Russia will need to spend $500 billion on infrastructure. That's a lucrative opportunity for American workers and businesses.

The state of Maine has a strong economic interest in seeing this deal work. Trade is already an important part of the economy: In 2010, the state's exports totaled $3.2 billion and made up 6.1 percent of the state's total economy. In 2008, exports were directly or indirectly responsible for 21,000 jobs in the state.

Thanks to WTO member rules, the state's trade position would become even stronger under a normalized trade administration.

Last year, the state exported a total of $13.9 million in goods to Russia alone, including $8.1 million in aircraft and parts. Once in the WTO, Russia will be required to reduce its tariffs on aircraft engines to 5 percent from 10 percent.

Cattle exports from Maine to Russia totaled more $5 million last year. Russia's WTO member agreement would help preserve that trade by construction any changes to future livestock important rules subject to WTO challenge.

Trade in Russia

Unemployment in Maine clocked in at 7.2 percent in March. That's better than many states, but the question still remains: Can the state's economy really afford to turn down this opportunity?

Already there is bipartisan support for granting Russia permanent normal trade relations: Four U.S. senators recently introduced legislation to permanently wipe Jackson-Vanik from the books and grant Russia permanent normalized trade status in the process.

In 1994, Russia was the world's 16th-largest economy and only 4 percent the size of the U.S. economy. Per capita gross domestic product was only $1,865. Today, Russia is the seventh-largest economy. Its per capita GDP is nearly $13,000. Russia's population, now about 142 million, declined over the intervening years but just reversed the trend.

Russia, says U.S. Trade Representative Ron Kirk, is only the United States' 20th-largest trading partner with $42.9 billion in two-way goods trade in 2011.

Russia's parliament, facing a July 23 deadline for its WTO invitation, is scheduled to vote Tuesday to join the WTO. Once the agreement is ratified, Russia automatically joins the WTO 30 days later.

However, for U.S. companies to trade competitively with Russia, Congress must sweep away some outdated Cold War restrictions and grant “everlasting normal trade relations” status to Russia. A PNTR bill sponsored by Sen. Max Baucus, D-Mont., is pending.

Granting PNTR trade status “is not a gift to Russia,” Kirk stressed in recent congressional testimony. Russia would have to lower tariffs, agree to protect foreign brands and copyrights, enforce food safety standards and conduct rules-based dispute resolution. The United States would not make any trade concessions because its tariffs already are low.

Despite its concessions, Russia wants WTO membership because it believes it will attract additional foreign investments that can diversify and strengthen its economy.

Passera is to look at energy cooperation, infrastructure development and industrial agreements on his Russian visit. The general setting of access to the Russian market and the crisis in the eurozone will also be among the main topics on the agenda of minister of economic development Corrado Passera, on his first official visit to Moscow today and tomorrow. As announced by the Italian Embassy in Russia, in his two days in Moscow Passera will meet: deputy prime minister with accountability for energy, Arkady Dvorkovich, energy minister, Aleksander Novak, industry and trade minister, Denis Manturov, and transport minister, Maxim Sokolov. Italy is one of Russia's main economic and trading partners. Trade totalled 46 billion dollars in 2011, 22.6% higher than 2010 and closing in on pre-crisis figures (53 billion). Nearly half of the total volume of imports from Russian (45%) consists of gas and oil, whose prices last year were particularly high. Energy will be at the heart of the visit, also preparatory to that of prime minister Mario Monti, expected by the end of July. AGI was told that in this sector Italy would like Russia to speed up the South Stream development (the gas pipeline that would bring 63 billion cubic metres of gas per year to Europe) and that Russia will ask Italy for support in the negotiations with Brussels to gain exemptions in the Third Energy Package.

Russia - the largest economy outside the global trade organization - has spent 18 years trying to negotiate its entry into the body. Now that the talks are over, the Russian government, which has strongly advocated the entry, is facing criticism from many businesses and opposition politicians that the WTO membership would hurt house producers by flooding the market with cheaper imports.

Activists including several dozen Communist Party deputies staged a protest outside the State Duma Tuesday morning to protest Russia's accession, which is considered a done deal since the Duma is controlled by President Vladimir Putin's party.

"The WTO is death to Russia!" one of the posters held by a protester.

Thousands of Russian businesses are wary that the low import duties and caps on subsidies that are a condition of joining the WTO will hurt their businesses. The government, however, insists that the WTO rules will help weed out inefficient players from the market and make Russian companies and their goods more competitive abroad.

Read more here: http://www.sacbee.com/2012/07/10/4620256/russia-to-ratify-agreement-for.html#storylink=cpy

 Russia, the ninth largest economy in the world, would also make itself subject to the WTO dispute resolution system, which gives the United States an important tool to hold Russia accountable for its WTO promises and its future actions on trade.

But the United States will be unable to benefit from these market-opening and rule-of-law changes unless Congress agrees to establish U.S. permanent normal trade relations (PNTR) with Russia. The United States routinely grants PNTR to other countries to ensure consistent and fair trade relations, and WTO rules entail that all member countries treat each other by the same standards.

Once Russia joins the WTO this summer, the WTO's other 150-plus countries will immediately enjoy this significant new access to Russia's 142 million consumers, which includes a growing middle class.

Brazil has imposed special taxes on inbound capital to cool its capital market and stop the real appreciating. China doesn't even pretend to run an open currency or trade regime and despite the huge investment there, foreign companies have a hard time making money or getting profits out. And the administrative trade barriers to foreign business in India are legendary.

In this setup, Russian companies (and foreign companies) are in a much better position to capitalize on the free flow of goods and capital that WTO membership offers. And it is already happening: bear in mind that a quarter of the $85 billion of capital flight in 2011 was actually Russian companies reinvesting profits earned from their foreign assets abroad. (These profits never touch Russian shores and have nothing to do with the Russian economy, but are included in the capital flight numbers because of an accounting quirk.)

There is already a steady stream of consumer-related businesses arriving in Russia, such as all the fast-food companies that arrived last year, like KFC and Burger King. 

The Russian parliament is expected to vote to join the World Trade Organization (WTP) on Tuesday, giving Congress a short window to either adopt trade legislation or risk seeing U.S. companies trail competitors in the world's ninth-largest economy.

Establishing normal trade relations with Russia is a no-brainer for U.S. businesses eyeing a vast export market, but lawmakers in the House and Senate are still debating how to do that while retaining leverage over the country on human right

Russia intends to drive home that point by sending a high-ranking parliamentary delegation to Washington right after the vote to make the case for permanent normal trade relations on Capitol Hill and to the media.

The four Russian senators will focus their discussions on Russia's accession to the WTO, Russian-American bilateral trade and the 2009 death of whistle blowing lawyer Sergei Magnitsky, according to the Russian embassy.

Both parties have latched onto Magnitsky's death, which happened while he was in police custody, to press Russia on human rights. House and Senate panels have passed bipartisan legislation placing financial and travel restrictions on Russian officials involved in Magnitsky's death and other human rights abuses, but Russia has vowed “retaliation” if it becomes law.

Lawmakers are at odds over whether to link the Magnitsky bill to the legislation normalizing trade relations, which has yet to clear either chamber. Sen. Max Baucus (D-Mont.), whose Senate Finance commission has jurisdiction over trade, has proposed doing so, but his counterpart on the House Ways and Means Committee, Rep. David Camp (R-Mich.), disagrees with the move.

Four Russian senators are in Washington today to urge Congress to do away with Cold War-era trade restrictions, a day after the Russian parliament voted to join the World Trade Organization. The Russian senators are also expected to make the case to lawmakers and the U.S. media that Congress should not replace the trade restrictions with human-rights legislation that would slap trade and financial sanctions on Russian human-rights abusers.

Tuesday's vote starts a 30-day clock at the end of which Russia will automatically become a member of the WTO. If Congress hasn't established permanent normal trade relations with Russia by then, U.S. businesses will be at a competitive advantage with the rest of the world for access to the world's ninth-largest economy.

 The Union aims to create an EU-like suprantional group in the Caucasus. Currently, the group is effectively a customs union but by 2015, the goal is to create a regional free-trade zone with a Eurasian Economic Commission to oversee joint policies, and an independent court to judge rules breaches. Unified monetary, tax and macroeconomic policies are eventually supposed to follow.

The reason, of course, is the closed nature of the Russian market, which allows big companies to charge huge margins with impunity and has lead to the astronomical growth and creation of a super-rich class filled by all businessmen that have profitably set up and captured a market niche. That will start to change.

Trade in Russia