Culture Clues: Russia

No other Eastern European country is as protocol-conscious as Russia. Russian officials expect to do business with only the highest-ranking executives. That’s why Western firms are best advised to send their top managers to ensure a favorable first impression.

For more information, refer to Fundamentals of International Business by Michael Czinkota et al. 

President Obama’s Signature Paves Way for Permanent Normal Trade Relations with Russia and Moldova

As of August 22, 2012, Russia became the 156th member of the World Trade Organization (WTO) and on December 21, 2012, President Obama signed legislation that extended permanent normal trade relations with Russia and Moldova. A day before approving this legislation, the U.S. and Russia agreed to an Intellectual Property Rights (IPR) Action Plan in order to improve IPR protection and enforcement. It is important to remember that Russia is currently the U.S.’ 20th largest goods trading partner and that in 2011, Russia was the 14th largest import supplier to the U.S. It will be interesting to see how the U.S. and Russia attempt to increase their economic potentials now with less barriers to trade. Which key dimension will reign: Economics or Politics?

G-20 in Russia: Currency Wars

The Group of Twenty (G-20), consisting of industrialized and developing nations, has been prominent in dealing with current economic crises.

Talks took place in Russia February 15th and 16th addressing the current currency wars. Brazilian Finance Minister Guido Mantega commented, “The currency war has become more explicit now because trade conflicts have become sharper. Countries are trying to devalue their currencies because of falling global trade.” That way, exports become more competitive while imports will be reduced.

The U.S. along with other developed nations tend to use quantitative easing as one of their main stimulus measures, in which a central bank buys assets such as government bonds using freshly created money. This results in increasing the supply of currencies such as the U.S. dollar and the U.K. pound; thereby, in the long run, lowering their exchange rate.

The G-20 pledged to “refrain from targeting their currency policies to gain a competitive advantage.” All nations agreed to defuse tensions over unstable exchange rates, marking the first time they were in agreement on such an issue. If all were to engage in competitive devaluation, no country would benefit.

These talks prove G-20 members are moving toward more cooperative efforts. This will help lead the path to global economic growth, which in effect, may help increase U.S. exports and its domestic economy.

Source: http://online.wsj.com/article/SB10001424127887324162304578307320045470086.html?user=welcome&mg=id-wsj

Weekly News -20th APEC Economic Leaders’ Meeting on Sep 08-09

Official photographs of APEC Economic Leaders

On September 08, the 20th APEC Economic Leaders’ Meeting kicked off in Vladivostok, Russia. Leaders from 21 economies declared four priorities on the agenda:

  • Trade and investment liberalization, regional economic integration;
  • strengthening food security;
  • establishing reliable supply chains;
  • intensive cooperation to foster innovative growth.

The Asia –Pacific region has been the drive of growth for global economy. Undoubtedly, the leading role of growth implies shared responsibility for economic recovery. Deeping regional cooperation and integration was the center-piece of the meeting. President Putin, in his opening remarks, stressed the importance to follow fundamental principles of open markets and free trade and called for an “action-orientated, focused, courageous and visionary” cooperation for economic growth and global recovery.

For more information: http://www.apec.org/