Catarina's World

Russia joins the WTO in August and is primed for growth. But U.S. companies may find it difficult to benefit because of a Cold War- era law restricting American companies from doing business in the U.S.S.R. It looks like the repeal of it will be passed by the Senate in august. But if it contains a reference to the Magnitsky bill US companies may still face difficulties in Russia. Devote 3 minutes to watching Chrystia Freeland talk to Klaus Kleinfeld, Chairman and CEO of Alcoa about Russia joining the WTO: 

As you know, Russia is one of the BRIC countries and the rest of the world is eagerly hoping to benefit from more trade with Russia as soon as it’s WTO membership starts this August .

Russian intelligence establishment still have cold war mentality? 

But even when the US cold war legislation is removed, cold war mentality may still remain an obstacle on the Russian side.

If it’s true that the Siloviki i.e. heads of Russia’s elite security and intelligence establishment, including Vladimir Putin, still remain in the cold war and the Kremlin dictated anti-Americanism continue, maybe the cold war isn’t over? On top of it businessmen are going to jail on a regular basis on charges that have frequently been unjust. The last ten years 3 million, yes you got it right, entrepreneurs have been jailed.

As a WTO member, Moscow will be required to cut import tariffs and open up key sectors of its economy to foreign investment. It took 18 years of negotiations and Moscow will now be required to cut import tariffs and open up key sectors of its economy to foreign investment. But many Russians are afraid their country will not be able to compete in the world economy.

It’s believed US exports to Russia could double as a result of WTO entry. Germany is one of Russia’s top trading partners and their ministry of economy estimates that German businesses doing business with Russia could earn an extra billion euros a year.

Jackson-Vanik repeal with or without reference to the Magnitsky bill?

It hence comes as no surprise that the US Senate Committee of Finance  approved a bill combining a repeal of the Jackson-Vanik Amendment and a measure aiming to punish Russian officials involved in the death of lawyer Sergei Magnitsky. Can’t help wondering how that’s going to go down with the Silovikis? That the White House is pushing for Jackson-Vanik repeal without reference to the Magnitsky bill doesn’t surprise me at all.  The latter seems to be a better bet of avoiding US companies going down the same route as BP in Russia. Would like to point out that what happened to Magnitsky was terrible but is tying the Magnitsky bill to the repeal of the Jackson-Vanik amendment not asking for trouble for US companies in Russia?

Do you believe the Russian Siloviki still have cold war mentality and the Kremlin dictate anti-Americanism? If so is the cold war really over? Is the Cold War-era law restricting American companies from doing business in the U.S.S.R. lamentable or a blessing in disguise for US businesses? Does it benefit companies from other countries?  Are you of the opinion that the Jackson-Vanik repeal should be made with or without reference to the Magnitsky bill? Should the United States and the rest of the world be cautious about doing business in Russia? 

Video: ReutersTV

If so, you personify the findings of Edelman's 2012 Trust Barometer. Watch Chrystia Freeland talk to Richard Edelman about the current erosion of confidence in the workplace and governments:

Respondents in 25 countries indicate trust in government have declined with nine percent and that Brazil is the country where confidence in elected officials have fallen most.

Not surprisingly the debt ceiling debacle in the US, bailouts in the European Union, corruption in Brazil and India as well as the nuclear disaster in Japan are the main reasons behind the mistrust. And it's interesting to note that Westerners have lower faith in their governments than citizens of the developing world. 

Half the public distrust companies

Businesses need to be regulated according to half the participants in the survery. And they are of the opinion that governments are not doing enough to rein in immoral companies. A high number of people would also like their authorities to increase consumer protection and ensure ethical corporate behaviour. It comes as no surprise that banks and financial institutions are least trusted. 

Trust in social media on the rise

Traditional media and online search engines are still the most trusted sources of news and information but social media including blogs, networking sites and content sharing sites showed the biggest increase in trust this year. Surprising, considering the amount of incorrect information circulating on such forums. 

Do you agree with the findings of the 2012 Trust Barometer and what Richard Edelman had to say? Have we lost confidence in authority figures? How can they build trust again and manage their reputations?There is now an opportunity for governments and businesses to lead in ways that earn trust. How would you like to see that done? Can they convince the citizens of the world that they are not about self interest but taking their responsibilities in society? Do you agree with Richard Eberman that confidence in governments and businesses will start rising again this year?

Video: ReutersTV