In the span of 17 years, Russia has gone from a state-controlled command economy to a stable, growing and rapidly maturing market-oriented economy. Today, it is one of the world’s largest economies with a GDP of $1.4 trillion. In 2009, however because of the financial crisis Russia’s GDP decreased by 7.9%. During the 6 previous years, due to buoyant household demand and business investment driving output in the construction, manufacturing and services sectors, the country enjoyed strong economic growth (ranging from 5.6 to 8.1 percent annually). During this growth period per capita incomes were rising and its middle class has become a more significant force in the national economy. Russia's future accession to the WTO, which Russia has declared it is now seeking as a single customs bloc with Belarus and Kazakhstan, should provide better access for Canadian products and services as well as improved rules-based and transparent business climate. European and East Asian countries are increasingly viewing Russia as a key economic partner. Russia's economy is expected to rebound with the global economic recovery, in line with outlooks in commodity prices. Russia's newly strong private sector will be a contributing factor, with the government playing an assertive role through regulation and public corporations. Moving forward, the country will need foreign capital, partnerships and technology to reach its full potential. As Russia proceeds with the modernization of its industrial and agricultural infrastructure, opportunities will abound in transportation, infrastructure development and industrial equipment. There are also excellent export and investment opportunities in agriculture and agri-food, mining, forestry, housing, and information and communication technologies. Canadian companies wishing to capitalize on the opportunities Russia presents face a number of challenges, however, including competition from other foreign companies and differences in cultural and business practices.
The Government of Canada has identified Russia as a GCS priority market—based on extensive consultation with government, academic and Canadian business and industry representatives—and has developed a comprehensive Market Plan that identifies the following key sectors as offering clear market opportunities well suited to Canadian capabilities and interests in Russia:
Canada-Russia Commercial Relations, 2005-2009 ($ Millions)
Recognizing the increased predictability, transparency and stability that WTO membership would bring to Russia, the Government of Canada has been supportive of its efforts to become a member and will continue to work closely with Russia and other members of the WTO to secure Russia’s accession. As Russia offers huge and largely untapped scientific expertise and considerable procurement, investment and partnering opportunities, Canada is seeking to upgrade its Foreign Investment Promotion and Protection Agreement (FIPA) with the country to better reflect current investment conditions and lend assurances to Canadian investors pursuing projects in Russia. Trade commissioners in Moscow will continue to advance Canadian exporter, investor and innovation interests by reaching out to Russian officials and business community leaders to promote Canada as a “top of mind” partner, by helping to address market access barriers and by providing Canadian businesses with timely and relevant information about commercial opportunities and conditions in Russia. Trade Commissioners in Canada will continue to bolster Canadian company awareness of the considerable commercial opportunities that exist in Russia and its increasing global value chain role as a strategic bridge between the large markets of East Asia and Europe.
Canada has the following Trade Agreements with Russia:
Recently, we have enhanced our bilateral relations with Russia through:
Unless otherwise stated, all data is for 2009 and expressed in Canadian dollars. All data based on latest available national statistics drawn from a variety of sources, including Statistics Canada, Export Development Canada, Bank of Canada, IMF WEO, UNCTAD.
For further information about Russia, visit the Foreign Affairs and International Trade Canada website or contact the Trade Commissioner Service at 1-888-306-9991.
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