Happy New Year!  As you plan for 2013, here are several items to think about and to incorporate into your business expansion plans. These actions could have a significant effect on U.S. businesses. 

1.  Export Regulations will change – New trade agency to be considered

Our previous post discussed the combined efforts of Department of Commerce’s Bureau of Industry and Security and Department of State’s Directorate of Defense Trade Controls to streamline the export process under the Export Control Reform Act.  But that’s not all.  In 2013, companies can expect the consolidation of several federal agencies creating one department that will carry out the trade related tasks of the: 

  • U.S. Department of Commerce
  • Export-Import Bank
  • Overseas Private Investment Corporation (OPIC)
  • Small Business Administration
  • U.S. Trade and Development Agency
  • Office of the U.S. Trade Representative

2.  The U.S. Government will try to expand opportunities for Service Industries

Global negotiations to boost and expand trade in U.S.services will commence in 2013.  This last month, the U.S. Government announced plans for talks with 20 countries regarding a service sector trade agreement.  Countries involved include members of the European Union, Canada, Mexico and Japan.  Notably, China will not be joining the negotiations.  Too bad.  Potentially, the negotiations may open the door for additional free-trade agreements. 

What will the global trade agreement mean for your company?

  • Opportunities to expand your footprint within a predictable environment;
  • The removal of trade barriers and regulatory red tape; and
  • Transparency and job creation to support the expansion of U.S.services.

3.  Doing business in Russia?

With Russia’s accession to the World Trade Organization (WTO) last August, the U.S.pushed to normalize U.S./Russian trade relations.  To start, the U.S. repealed the Jackson-Vanik Amendment, an amendment that conditioned “normal trade relations” and Most Favored Nation (MFN) tariff rates on Russia emigration policies.  Under the WTO rules, this type of condition is not allowed.  Keeping the Amendment would of have allowed Russia to implement discriminatory trade measures against the U.S.

Moving quickly, the U.S. Government is already working with Russia to expand the economic potential for both countries.  Many U.S. agencies and offices are working on concrete ways to increase bilateral trade and investment.  Last month Russia and the U.S. agreed to an Intellectual Property Rights (IPR) Action Plan.  This plan will boost protection and enforcement of IPR.  Additionally the United States-Russian Federation Intellectual Property Working Group will continue to work on IPR issues and concerns.

How does this help your company?

  • Russian companies will want U.S. partners;
  • U.S. companies can sell into the Russian market with competitive pricing;
  • Skyrocketing demand for certain U.S.exports.  For example, agricultural products and machinery; and
  • Legal mechanisms and governmental programs will be created to protect and support parties engaged in U.S./Russian trade.

Inevitably, despite all these positive measures, disputes will arise.  This month Russia banned imports of U.S. and Canadian pork treated with certain growth enhancing drugs.  U.S. officials claim that this is a violation of Russia’s WTO commitments.  It seems the honeymoon is already over. 

Takeaway: keep an eye out for developments effecting your business – both good and bad.

Have a great week,