Posts Tagged ‘Russia’


Ensuring the Right Business Conditions for U.S. Companies to Thrive in Russia

June 21, 2013

Joe Wereszynski is an International Trade Specialist in the International Trade Administration’s Office of Russia, Ukraine and Eurasia.

Russia is an evolving market and its World Trade Organization (WTO) membership is positively influencing bilateral cooperation and business opportunities. We at the International Trade Administration’s (ITA) Office of Russia, Ukraine, and Eurasia have been working hard to help American businesses navigate Russia’s business climate. On May 30, under the auspices of the U.S.-Russia Bilateral Presidential Commission, we partnered with U.S. and Russian experts to hold a widely attended forum in Moscow on standards and conformity assessment.

Standards and conformity assessment barriers represent the largest trade barrier by volume in the world. With Russia’s newly inked WTO membership, we saw clear value in cooperating with Russia early in the nation’s implementation period to prevent barriers from arising.

The forum was co-led by the U.S. Department of Commerce and the World Trade Center Moscow. It attracted more than 300 participants and featured presentations by standards and policy experts from the public and private sectors including the U.S. Department of Commerce, the American National Standards Institute, the National Institute of Standards and Technology, Underwriters Laboratories, the International Medical Device Manufacturers Association, the U.S.-Russia Business Council, the Russia’s Ministry of Economic Development, Ministry of Industry and Trade, and the Federal Agency on Technical Regulation and Metrology (Rosstandart).

Matthew Murray, the U.S. Department of Commerce Deputy Assistant Secretary for Europe and Eurasia, stressed the importance of standards in global markets, and highlighted the benefits that cooperation on standards can have to U.S.-Russian economic relations. He announced that the Commission’s working group on Business Development and Economic Relations adopted a plan that, “identifies areas in which the United States and Russia envision a new chapter of economic cooperation, including capitalizing on new trade opportunities presented by Russia’s accession into the WTO.

“We are developing a common language, mutual understanding and consensus on appropriate commercial standards for regulating our products and services… while ensuring the right business conditions are in place to create fair, and predictable globally competitive markets for both U.S. and Russian companies to thrive.”

The forum brought together U.S. and Russian standardization bodies to foster greater understanding of each other’s systems and facilitate cooperation. As a result, both countries may increase cooperation to improve transparency and interoperability, by developing regulatory guides and creating a standards portal to help companies better understand market conditions and standards requirements.

Director General Vladimir Salamatov of the World Trade Center Moscow commented on this cooperation, saying, “developments in innovation in our two countries, and the world as a whole, have reached a level where it is necessary to devise common strategies and solutions in order for the economy to develop more effectively and to support the growth of production.

“We can confidently say that we have reached a mutual understanding on all the questions and also have made big plans for collaboration on future projects.”

A major theme of the forum was ensuring regulatory conditions do not unnecessarily hamper trade. Last year, Russian President Vladimir Putin set out the goal of improving Russia’s rating on the World Bank’s Ease of Doing Business Report from 120 to 20 by 2018.

U.S. Department of Commerce trade agreement expert Bryan O’Byrne explained that the principles of the WTO Technical Barriers to Trade Agreement (TBT) can improve Russia’s ease-of-doing-business outlook by increasing transparency through notice-and-comment of new regulations to the WTO. Notice-and-comment provides companies with an advanced warning on regulatory changes and allows companies to provide feedback to regulators on implementing less trade restrictive measures, while meeting the same level of safety or higher.

Another key TBT Agreement principle is the need to use globally relevant standards in regulation, which are more commonly used by companies around the world.  This provides greater market access, and can help domestic companies become more competitive. During sector-focused panel discussions, Russian regulators responded positively to a U.S. private sector recommendation to consider adopting a globally relevant standard to increase fire safety for the petroleum industry.

For more information on the event and our partner organizations, go to:


Reaching Out to U.S. Businesses to Do Business in Russia

June 10, 2013

Joe Wereszynski is an International Trade Specialist in the International Trade Administration’s Office of Russia, Ukraine and Eurasia. 

DAS Murray, Jim Ross CEO of Ross Laboratories, and Karen Taylor Seattle USEAC look at Ross Lab’s innovative marine technology while discussing market access opportunities.

Jim Ross of Ross Laboratories (center) demonstrates  some of Ross Labs’ marine technology for Karen Taylor of the Seattle Export Assistance Center and Deputy Assistant Secretary for Europe Matt Murray during a discussion of market access opportunities.

As we discussed last week, we at the International Trade Administration’s (ITA) Office of Russia, Ukraine and Eurasia have been working hard to tell American businesses about doing business in Russia. Since last year, we’ve held a series of webinars, visits and consultations to help businesses understand our new trade relationship.

We will also participate in this month’s International Economic Forum in St. Petersburg. This forum will have participants from around the world and one of the key focuses will be the importance of capitalizing on new opportunities.

We see the Russian market as a new opportunity for many businesses and are working hard to make sure our trade relationship stays on the right path and American businesses understand how to navigate it.

“Standards and conformity assessment barriers are the number one trade barrier by volume around the world,” says Deputy Assistant Secretary for Europe and Eurasia Matthew Murray. “We see clear value to getting ahead of these issues, identifying problems early, and making sure U.S. exporters are aware of the rights and resources at their disposal.”

Our team has given presentations on our evolving trade relationship with Russia, and how ITA can help businesses overcome trade barriers and do business with Russia.

One such presentation was in late September, on the margins of the 2012 Russian-America Pacific Partnership (RAPP) forum held in Tacoma, Washington. Mr. Murray spoke in a series of events and held one-on-one meetings with companies across the state.

Washington plays a vital state role in conducting foreign trade; it’s the 7th-largest state export volume and was the 5th largest state exporter to Russia. The state’s increase in exports to Russia from $247 million in 2010 to $445 million in 2011 directly supported over 1,400 American jobs.

During 2012 and 2013, our office helped to organize additional roundtable events with U.S. companies on the benefits of Russia’s WTO membership in eight cities including New York, Moscow and Boston. In June 2012 hosted a webinar that reached over 100 participates across the United States.

We continue to listen. If you want to learn how to do business in Russia, please contact your nearest Export Assistance Center for assistance. We look forward to helping American business sell their goods and services in Russia, taking advantage of our new trade agreement.


U.S. Department of Commerce Reaches Out to U.S. Companies on the Benefits of Russia’s WTO Membership

May 29, 2013

Joe Wereszynski is an International Trade Specialist in the International Trade Administration’s Office of Russia, Ukraine and Eurasia. 

What better way to recognize World Trade Month than by expanding to the Russian market?

On December 14th, 2012, President Obama signed into law legislation extending Permanent Normal Trade Relations (PNTR) with Russia, establishing a promising trade future with a growing economy. We at the International Trade Administration’s (ITA) Office of Russia, Ukraine and Eurasia are working to help U.S. companies understand and take advantage of this relationship.

Our team has worked to inform U.S. industry about changes that will take place due to PNTR and Russia’s accession to the WTO. Our goal is to make sure that all U.S. businesses understand the agreement and are able to take advantage of this new trade relationship.

The U.S.-Russian Business Development and Economic Relations Working Group, which was established in 2009 by President Obama and then-Russian President Medvedev as part of the U.S.-Russian Bilateral Presidential Commission, is informing American companies of their new trading rights and business opportunities stemming from U.S.-Russian cooperation. The Working Group signed a plan that will guide and shape bilateral economic cooperation efforts between the two governments.

One specific area where work is under way is the realm of standards and conformity assessment. As tariff barriers fall, non-tariff barriers tend to rise. We’re working with interested industry groups and companies from both countries to prevent unnecessary trade barriers. Familiarizing companies and regulators with the rules-based WTO Agreement on Technical Barriers to Trade can help to increase transparency and facilitate greater trade and investment.

Later this week, we’ll meet with government and industry representatives from both countries for the U.S.-Russian Standards and Conformity Assessment Forum in Moscow. We’ll discuss how to prevent trade barriers and cooperate on standards for fair trade. More than 500 attendees have registered for the event.

We continue to reach out to U.S. companies about doing business with Russia, and I hope you’ll check back next week when we provide an update on outreach activities.

If your business is interested in exporting to Russia, the entire Department of Commerce team is ready to help. Your nearest Export Assistance Center can help you understand how to take advantage of our updated trade relationship. If you’ve run into a trade barrier with Russia or any other country, you can report it to ITA’s Trade Compliance Center.

This World Trade Month and all year long, we’d love to help you sell your goods and services in the Russian market.


U.S. Exporters Set to Reap Benefits of Russia’s Accession to the World Trade Organization

February 7, 2013

Matthew Edwards is Director, and Christine Lucyk is Senior Policy Advisor, in the International Trade Administration’s Office of Russia, Ukraine and Eurasia.

As 2012 drew to a close, Acting Commerce Secretary Rebecca Blank joined President Obama, U.S. Trade Representative Ron Kirk, members of Congress, and representatives of the business community at the White House to mark a historic event in U.S.-Russia economic relations – the signing of legislation authorizing the President to establish Permanent Normal Trade Relations (PNTR) with Russia. Calling the legislation a “win-win for American businesses and workers,” Blank hailed the legislation as a crucial step to ensure that U.S. businesses can compete on a level playing field and enjoy in full measure the increased access to Russia’s growing market which Russia extended through its agreement to join the World Trade Organization (WTO).

These are benefits that the U.S. Government, in consultation with Congress and American manufacturers, farmers and service-providers as well as fellow with WTO members, worked hard to achieve, through intensive negotiations, and with bipartisan support by successive U.S. administrations, culminating in Russia’s accession to the WTO in August 2012.

What does this mean for the future? For context, as one of the world’s larger emerging markets, Russia has been playing a growing role in U.S. trade and investment, in particular as a market for U.S. goods. In 2012, American exports to Russia rose approximately 25 percent over 2011’s level, growing more than five times as fast as U.S. exports to the world as a whole. More exports means support for more American jobs.

U.S. exporters stand to benefit further from greater and more predictable market access, as tariffs fall in line with Russia’s commitments to reduce and bind tariffs on many industrial products. In the past, Russia was able to increase tariffs without limit. As a result of its WTO commitments, Russia’s tariffs will be bound at an average rate of about seven percent. U.S. exports in key sectors like information technology, civil aircraft, chemicals, agricultural products and many types of capital goods and equipment will see significant tariff benefits.

In the past, U.S. service providers were excluded from many sectors or faced barriers in those sectors where they were allowed to operate. Russia’s market access and national treatment commitments provide new opportunities in telecommunications, computer services, express delivery, distribution, financial services and audio-visual services.

Russia’s commitments on non-tariff measures, including obligations to abide by WTO rules on technical barriers to trade, subsidies, and sanitary and phytosanitary (SPS) measures, will limit Russia’s ability to take certain kinds of arbitrary actions, such as SPS and other measures that have restricted U.S. exports of meat and poultry, spirits, and dairy products.

Russia’s trade environment also should continue to benefit over time from commitments in the area of transparency. U.S. exporters have in the past come up against laws and regulations adopted without adequate opportunity for input from interested parties or without reliable information about regulations on trade in a given product or industry. Under the WTO, Russia is obligated to apply WTO rules on transparency, including formal establishment of notice and comment procedures for proposed measures affecting trade in goods, services and intellectual property and requirements to provide decisions in writing and new rights of appeal.

As the volume and breadth of U.S.-Russia trade grows, establishing PNTR has provided the U.S. with more tools and the leverage to hold Russia accountable for the obligations it has undertaken, and to defend U.S. economic interests in Russia’s market. In the coming months, the International Trade Administration plans to step up our outreach to advise U.S. industry of new opportunities in Russia’s market – as well as its remaining challenges. These challenges still can be considerable, as indicated in the World Bank’s most recent “Doing Business” rankings, where despite jumping eight places in the rankings, Russia placed 112th out of 185 economies surveyed.

The Commerce Department will be working under the U.S.-Russia Business Development and Economic Relations Working Group (part of the U.S.-Russia Bilateral Presidential Commission) to continue to bring U.S. business interests to the fore in discussions with our Russian counterparts on ways to further expand this growing trade relationship in ways that benefit U.S. industry and U.S. workers.


Russian Entrepreneur Touts ITA Training Program ‘Life-Changing’

September 12, 2012

Justyna Kottke and Tracy Perrelli are International Trade Specialists at the U.S. Department of Commerce

At a reception honoring alumni of ITA’s Special American Business Internship Training (SABIT) Program held in St. Petersburg, Russia on August 2, Dr. Oleg Prokhorenko, a Russian entrepreneur and small business owner, told Under Secretary for International Trade Francisco Sánchez that participation in a SABIT internship “changed his life and career.”

(L-R) U.S. Consul General Bruce Turner, Under Secretary Sánchez, and Oleg Prokhorenko during the SABIT Alumni event held in St. Petersburg, Russia August 2. (Photo Vladimir Grigoryev)

(L-R) U.S. Consul General Bruce Turner, Under Secretary Sánchez, and Oleg Prokhorenko during the SABIT Alumni event held in St. Petersburg, Russia August 2. (Photo Vladimir Grigoryev)

Dr. Prokhorenko grew his company, Laboratory of Glass Properties, after participating in a SABIT internship in the United States in 1995 to learn about glass manufacturing at Ford Motor Company’s Scientific Research Laboratory.

His company provides testing and data analysis of glass and glass material qualities, and has invented a system to check energy efficiency methods used during the manufacturing of windows, car glass, and optical glass. Dr. Prokhorenko attributes the growth of his small business to the knowledge and experience gained during his SABIT Program internship.

“I built this business based on what I learned during my SABIT internship.  I now employ more than 60 people and my company is growing,” he told Sánchez.

Earlier that day, Prokhorenko participated in a training seminar on corporate leadership ethics for SABIT alumni.  The attendees for the training included past SABIT program participants and leaders of small and medium enterprises; both groups found the training very useful for their businesses.

SABIT Program Impacts Small Business Development

Since the SABIT Program was founded over 20 years ago, the program has trained more than 5,000 mid-to-senior level professionals and business leaders from the countries of the former Soviet Union. These participants are selected through a highly competitive application process for industry-specific technical assistance programs, which bring them to the United States for three to four weeks during which they meet with federal, state, and local government, associations, academia, large corporations and small and medium businesses.  These programs typically begin in Washington, DC, and then take the delegations to various locations in the continental United States, chosen for best fit with their industry.

Upon returning to their home countries, SABIT Program participants have reported many successes, including the establishment and growth of industry associations, cooperation with participants from their countries and other regions, opportunities to make positive improvements to the protection of intellectual property, promotions to decision-making positions within their government, and development of new business relationships with U.S. companies that they met during their training.

In fact, the SABIT Program has facilitated over $850 million in U.S. exports over the last 20 years. These types of outcomes are very beneficial to both the SABIT participants and their countries and to U.S. companies, many of which are small and medium firms that interact with the SABIT trainees during and after their training.

For small and medium companies, the opportunity to meet with SABIT Program delegations is very appealing as a chance to learn about their industry in a different geographic area, and meet with industry leaders and potential business partners without having to travel to these countries.

The SABIT Program provides valuable benefits to U.S. companies and organizations and to its alumni. Dr. Prokhorenko is a great example of one of the thousands of SABIT Program alumni who have been able to significantly better their businesses and lives thanks in part to ITA.


Chicago Today, Russia Tomorrow

June 27, 2012

Francisco Sánchez is the Under Secretary for International Trade

Today I was fortunate enough to speak at the SMC3 conference in Chicago about the progress we’ve made toward achieving the President’s goal of doubling U.S. exports. SMC3 is a supply chain industry association that provides technology to shipping and logistics companies across the country, the very same companies who ensure the efficient transportation of American exports. Each year, the conference brings together representatives from America’s most active manufacturing, trucking, rail, shipping, and logistics firms.

The success of U.S. exporters depends in part on U.S. businesses being able to quickly and efficiently get their products to market. So it was fitting that I gave these remarks in Chicago, home to some of America’s most important freight and transportation corridors. According to the latest data, the Chicago metropolitan area is the 7th largest export market in the U.S. with merchandise shipments totaling nearly $34 billion.

Under Secretary Francisco Sanchez and Chicago U.S. Export Assistance Center Director Julie Carducci present Export Achievement Certificate to BayRu CEO Aaron Block. (Photo Commerce)

Chicago is also home to some of America’s top exporters. I was pleased to honor an innovative company, BayRu, with an Export Achievement Certificate while in Chicago. Their online store,, BayRu is one of the fastest growing e-commerce sites in Russia. On, Russian shoppers can buy a wide range of American consumer goods found in catalogues like E-bay and Amazon and then have those products shipped to more than 160 cities across Russia and other CIS states.

But what makes this company unique is that it’s headquartered right here…in Skokie, Illinois. BayRu has a unique business model of buying American consumer goods here, which are often tough to find in Russia, repackaging them, and then exporting those goods for delivery in Russia.

In January 2011, BayRu partnered with the International Trade Administration’s Commercial Service in Chicago and Moscow to gain market knowledge and insight. Since partnering with ITA, BayRu’s export sales increased by more than $10 million and it plans to create 20 local jobs here in the Chicago area.

BayRu is just another example of an American company being creative, growing their business through exports, and creating good-paying jobs for Americans in the process. But it is also the prime example of a company that would benefit from Russia’s WTO accession and the repeal of the Jackson-Vanik Amendment.

Currently, Russia is set to join the WTO, which will reduce tariffs and increase transparency, making it easier for American companies to access this large and growing export market. However, Russia is still covered by the Jackson-Vanik Amendment, which makes trade conditional with certain economies. If this amendment is not repealed, American businesses would not be able to enjoy the benefits of more open trade with Russia.

That’s why the Obama administration has called on Congress to repeal the amendment and grant Permanent Normal Trade Relations (PNTR) with Russia as soon as possible. It makes no sense to let American businesses stand on the sideline while our global competitors take advantage of Russia’s WTO accession and gain access to a growing market with new opportunities for innovative American companies, like BayRu.

If Congress establishes PNTR with Russia, it will open the door for American businesses to expand into Russia and create jobs here at home. BayRu will enjoy many real benefits, direct and indirect. Increasing trust and awareness of U.S. brands will help drive their growth even further and help them create more good-paying jobs in Chicago.

This is an important issue for many businesses across the country. To find out more about what Russia WTO accession and the repeal of Jackson-Vanik could mean for business, visit our website where you’ll find detailed reports on potential opportunities for U.S. businesses.


Helping to Drive the Export Economy

June 5, 2012

Francisco Sánchez is the Under Secretary of Commerce for International Trade.

June is only a few days old, but it’s already been a special month for me personally.

Last Friday, I was both honored and humbled to receive the “Excellence in Public Sector Service Award” from the Latin Chamber of Commerce of the United States (CAMACOL).

Based out of my home state of Florida, the organization is one of the most influential minority business associations in the nation. For decades, it has done great work to open new doors of opportunity for U.S. businesses, and I greatly appreciate CAMACOL’s recognition of my work in the global marketplace.

Under Secretary Francisco Sánchez during the Healthcare Technology and Policy Trade Mission (Photo: Eduardo Sanchez)

Under Secretary Francisco Sánchez during the Healthcare Technology and Policy Trade Mission (Photo: Eduardo Sanchez)

However, as I always say, I don’t do this work alone. I have the pleasure of serving with the talented staff of the International Trade Administration (ITA).  Located in roughly 100 U.S. cities, and more than 70 countries, they work tirelessly to represent the interests of American businesses in markets all over the world.

As you’ll see in this month’s edition of the International Trade Update, they continue to do great work to help American-made products reach as many international consumers and markets as possible.

We held Trade Winds — Asia, an event to help U.S. companies, across a wide-range of sectors, explore the incredible opportunities in the Asia-Pacific region. U.S. goods exports to the region totaled nearly $900 billion in 2011 — a 15 percent increase from 2010.  Incredibly, there is potential to do more, and we are working to help companies make the most of this promise.

Additionally, in Hong Kong, Commercial Officers from ITA organized the largest ever Filmart conference, bringing together American film companies to meet with regional distributors from across Asia.  This business forum, and others like it, ensures that American entertainment companies are well positioned to prosper in this important market.

I was also proud to lead a delegation of 17 U.S. companies on the first U.S. Healthcare Policy Trade Mission to Mexico.  The Mexican healthcare sector has invested an estimated $500 million in healthcare information technology systems; its government is expanding healthcare coverage to all citizens, and with 4 percent economic growth expected in the country for 2012, this is an ideal market for U.S. medical sector products and services.

One final highlight from last month: we celebrated American exporters at the President’s “E” and “E Star” annual awards ceremony, which recognizes those who make significant contributions to the U.S. export industry. The event was held at the White House with special guests Commerce Secretary John Bryson, and Valerie Jarrett, Senior Advisor to President Obama.  A record 41 companies were honored for their excellence, and, in the larger picture, the event emphasized how important U.S. exports are to America’s economy and future.

The numbers are clear: in 2011, the total value of U.S. exports reached a record $2.1 trillion; these exports supported nearly 10 million jobs at a time when putting people to work is a national priority.  That’s why ITA remains firmly committed to helping companies sell products that are “Made in America” in as many markets as possible.

One example: when this newsletter edition publishes, I am leading a trade mission to Russia focused on clean technology and energy efficiency.  The Russian government has stated that the industry is a key to a modern economy, and we’re determined to ensure that U.S. products are a part of this growth.  And over the next few weeks, ITA will have a number of announcements so keep in contact with us.

June is poised to be a productive month.  As I stated earlier in this column, it’s already been special for me.  I was honored to receive an award for my public service.  But, I don’t do my work to get awards; I do it to make a positive difference for U.S. businesses.  And each new day brings new opportunities to do this work and make that difference.

Get in touch with ITA, and those opportunities could be yours.


Twelve U.S. Companies Participate in the First-Ever Energy Themed Trade Mission to Russia

June 5, 2012

Francisco Sánchez is the Under Secretary of Commerce for International Trade.

Russia’s impending accession to the World Trade Organization (WTO) has sparked a boom of foreign business interest in the Russian economy. Couple this with the Russian governments’ concentrated investments in energy technology and you have a situation ripe for trade deals between American and Russian companies. As such, I am leading a trade delegation of American energy companies to Moscow, the first such energy-themed mission in the history of U.S.-Russian relations.

Under Secretary Sánchez welcomes members of a 12-company U.S. trade delegation to Moscow for the first stop on an energy efficiency trade mission to Russia. The delegation will meet with public and private sector officials in Moscow and St. Petersburg to discuss export opportunities in a growing sector

Under Secretary Sánchez welcomes members of a 12-company U.S. trade delegation to Moscow for the first stop on an energy efficiency trade mission to Russia. The delegation will meet with public and private sector officials in Moscow and St. Petersburg to discuss export opportunities in a growing sector

Representatives from 12 American energy firms are accompanying me on a business tour of Moscow in search of export opportunities for American energy firms. The Russian market represents incredible potential and invaluable relationships – opportunities that America cannot afford to neglect. Successful investments in the Russian energy market could spur a windfall of job creation and economic growth at home while American companies rake in profits from these beneficial partnerships.

We’ve watched U.S. merchandise exports to Russia double from 2005 to 2010, and then grow nearly another 40 percent in 2011 alone. American business exports to Russia now top $8 billion dollars a year. This is a market we must capitalize on. Recognizing this growth and potential, the Department of Commerce led an automotive technologies mission to Russia in April and was eager to do so again.

The Russian government is implementing an Energy Strategy that calls for energy efficiency, sustainable development, energy development and technological development, as well as improved effectiveness and competitiveness. The demand for affordable and efficient energy will only grow as the global economy evolves, a phenomenon that will continuously stimulate demand for high-quality, energy-efficient products and services. Appropriately, the companies on this trade mission can supply exactly that. As I highlighted in an opinion piece in The Moscow Times, many U.S. businesses on the mission have a particular interest in Russia’s focus on smart grids, green-building and road infrastructure.

This mission is a historic event for both the American and Russian energy industries. U.S. companies, manufacturers, and workers already are global leaders in clean technology production and services. And that is why I am privileged to lead this mission to expand exports to the region, exports that will create jobs at home. As a nation, we should be proud of the expertise our companies offer, as well as the innovation and advancement we are known for. These investments today will pay dividends to our citizens tomorrow.


Auto Companies in Russia: Always Two Sides to a Story

May 1, 2012

Eduard Roytberg is a Senior International Trade Specialist and the Global Automotive Team Leader within the Commercial Service division of the International Trade Administration.

This past week 12 U.S. auto parts and service providers traveled through Russia with ITA’s Deputy Secretary Michelle O’Neill finding partners and business opportunities along the way. It will come as no surprise that three of the 12 are based in Michigan.

CAMACO, LLC is a Novi, Michigan based independent supplier of engineered seat frames to the automotive market with locations in North America, South America, Europe and India. Camaco supports 1,200 employees worldwide and their diverse product scope includes stamped metal and wire-frame seat assemblies, headrest and armrest structures.

Participants in the Russia Automotive Trade Mission and Deputy Under Secretary O'Neill at Johnson Controls in St. Petersburg.

Participants in the Russia Automotive Trade Mission and Deputy Under Secretary O’Neill at Johnson Controls in St. Petersburg. (Photo U.S. Department of Commerce)

Camaco has only just begun working with the U.S. Commercial Service and is looking to expand operations into Russia. They have existing operations in India and Brazil.

Another Michigan company on the mission Fluxtrol, Inc., is based in Auburn Hills. Fluxtrol was established in 1981 and manufactures soft magnetic materials for magnetic flux control in induction heating systems and provides advanced engineering services including computer simulation, induction coil design and process optimization.

Fluxtrol, a client of the U.S. Commercial Service for the past  7 years, embarked on this mission to expand their presence in the Russian market and are looking to broaden and deepen their auto industry contacts. They are already planning follow-up trip. Robert Ruffini, President of Fluxtrol is also a member of the Michigan District Export Council.

Inductoheat, Inc., established in 1962 and based in Madison Heights, is a small yet leading manufacturer of induction heating equipment with more than 50 years of experience. Inductoheat operates 40 facilities worldwide providing products to many of the world’s largest automotive companies.

Indoctoheat has been working with the U.S. Commercial Service for the past two decades and hoped to gain exposure to and understanding of the Russian market, make significant connections with leaders, partners and potential customers in Russia, and explore opportunities for business expansion in Russia.

“As a result of participating in the trade mission, I will be coming back within the next three weeks to visit two new prospective clients and further develop our level of support for the Russian automotive market,” said Inductoheat, Inc., Vice President of Heat Treating Rob Madeira.

Related: U.S. Auto Parts Firms Find Partners in Russia

These and the rest of the mission participants are either already doing business in Russia and looking to expand or are here with the hope of expanding into the Russian market.

To facilitate good business relationships for U.S. companies, the Commercial Service in Russia and globally frequently work with foreign buyers to ensure that U.S. firms find positive and long-lasting relationships in an overseas market.

Some of those buyers were recognized by Ms. O’Neill during the mission’s visit to Moscow and St. Petersburg. Specifically, Triton-Import of Moscow was recognized for its achievement in opening the Russian automotive spare parts market to American small and medium-sized enterprises. For the past 19 years, Triton-Import has been an important Commercial Service partner. This partnership has resulted in more than $50 million in sales for U.S. exporters of automotive spare parts.

The two companies honored last week in St. Petersburg include Solex and Auto Sport Tuning. Solex was recognized for their achievement as a leading importer of American-made trucks and spare parts into Russia. The Commercial service has helped Solex find U.S. partners to actively market U.S. brands that has resulted in more than $300 million in sales for American truck manufacturers and spare parts for American trucks.

Auto Sport Tuning (AST), a relatively young partner of the Commercial Service, was recognized for its leading role as an importer of U.S. specialty automotive equipment in the Russian market. AST has participated in the International Buyer Program, or IBP, since 2007, attending the Automotive Aftermarket Industry Week in Las Vegas, Nevada. As a result of this collaboration and partnership with the Commercial Service, AST has established business partnerships with several American automotive performance suppliers.

The U.S. and Russian companies show the partnership it takes to facilitate global trade. Great partners home and abroad can be facilitated with the help of the Commercial Service domestically and overseas.


U.S. Auto Parts Firms Find Partners in Russia

April 25, 2012

Elena Mikalis is an International Trade Specialist in the Office of Transportation and Machinery within the Manufacturing and Services division of the International Trade Administration

This week Deputy Under Secretary Michelle O’Neill is leading a delegation of 12 auto parts and services companies to explore opportunities for sales to the burgeoning Russian auto industry. I am fortunate to be accompanying her and the 12 U.S. companies who are on the mission. We have completed two of our three stops in the mission, having left Samara today.

In 2011, vehicles sales in Russia grew 39 percent to 2.6 million units. U.S. auto components and parts manufacturers are well-positioned to help supply the growing Russian auto industry, which grew 98 percent from 2010 to 2011, reaching $125 million. In 2011, Russia imported almost $1.5 billion in U.S.-made components, parts, and finished motor vehicles, an increase of 75 percent from 2010.

Deputy Under Secretary Michelle O'Neill presents a certificate of recognition to Konstantin Avdeev, President and CEO of Triton-Import for their support of U.S. exporters of automotive spare parts.

Deputy Under Secretary Michelle O’Neill presents a certificate of recognition to Konstantin Avdeev, President and CEO of Triton-Import for their support of U.S. exporters of automotive spare parts.

The trade mission delegation participated in one-on-one meetings with potential business partners in Samara, have met with key Russian Government officials, and visited automotive assembly plants and component manufacturers in Russia’s automotive industry centers.

Deputy Under Secretary O’Neill launched the mission in Moscow by presenting Triton-Import, a Moscow-based automotive parts distributor, with the Commerce Department’s Certificate of Appreciation for Achievement in Trade. Triton-Import has helped U.S. companies export more than $50 million in automotive spare parts to the Russian market. “Triton-Import has been an important partner and friend to many U.S. small and medium-sized firms,” O’Neill said.

The trade mission advances President Obama’s National Export Initiative which aims to double U.S. exports by the end of 2014, supporting economic and job growth.

With more than 140 million consumers and a growing middle class, Russia remains one of the most promising markets for U.S. exporters. Sales of cars and trucks in Russia are currently growing at an annual rate of 30 percent. In 2010, Russian customers purchased 1.9 million cars. This figure includes 646,000 new Russian cars and 1.25 million foreign cars, both imported and produced in Russia. Importers forecast continued rapid growth of approximately 20 percent in 2011. If these trends continue, most experts project Russia will be the largest automotive market in Europe within the next few years.

Related: Auto Companies in Russia: Always Two Sides to a Story

Foreign automakers have taken notice of the Russian automotive market’s potential for growth and are building assembly plants to meet the increasing demand for high-quality automobiles. General Motors, for example, has a $335 million plant in Togliatti, a joint venture with Russian auto giant AvtoVaz. The mission participants will be touring this facility at the end of the week to round out their trip. Other major international producers, including Nissan, Toyota and Hyundai, have made significant investments in St. Petersburg and the surrounding Leningrad oblast, turning it into a new automotive assembly cluster.

U.S. mission participants are further encouraged by Russia’s recent invitation to join the World Trade Organization. Russia is expected to accept this invitation and formally join the WTO this summer. As a result, Russia has committed to reducing many of its tariffs on motor vehicles and parts — some of which run as high as 35 percent.

It’s an exciting time in the auto industry and Russia is a great market for U.S. auto parts and suppliers to find sales and partners.

Samara, the Detroit of Russia

Samara, formerly known as Kuybyshev, is one of the largest and most prominent regions in Russia. It is also referred as Region 63 and is situated in the south-eastern region of European Russia. Samara region is the administrative hub of the Samara oblast and is one of the most stable leaders of the national economy. Similar to Detroit, Samara is situated close to reliable transportation, has well developed infrastructure for manufacturing and access to parts and supplies.

Samara region is renowned across the world for its planes, cars, bearings, aluminum and cables. It is also the hub of the Russian space industry. Satellite launchers, unique aircraft engines and manual space crafts are produced in this region.

The Samara region is a hub of innovation and industrial development. It provides the essential environment required for innovative development. This includes, a significant industrial and scientific potential, availability of well-trained personnel and a well-established infrastructure of innovative activities. The obvious advantages of Samara region are the favorable business climate and the multidisciplinary structure of the industrial system.

Development of Samara Region’s automobile cluster is a priority in the development of the regional economy. Share of automotive industry in the regional industrial output amounts to more than 35%, in machine building – over 70%. The automobile cluster includes a large number of firms producing cars and car components, as well as providing transport services.

Samara Region is one of Russia’s the most significant transport hubs.

The share of automobile transportation in the total volume of transported freight is 43%. The extensive network of public paved roads covers 12,700 km (7,891.4 miles). The Moscow – Chelyabinsk federal highway crosses the crosses the region, with links to Kazakhstan, Central Asia and northern parts of Russia. 55 transport companies serve the region′s passenger and freight transport by region and Russia.

Railway transportation accounts for 22.8% of freight traffic. Samara Kuibyshevskaya Railway has the total length of 1,389 km (863 miles).