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6 Jun, 2008 15:36

U.S.-Russia trade not reaching its potential

The volume of U.S.-Russia trade should be much bigger than it is, according to U.S. Commerce Secretary Carlos Gutierrez. He was speaking after attending a roundtable on bilateral trade at the St. Petersburg International Economic Forum on Friday. Meanwhil

Gutierrez is the first U.S. Cabinet member to discuss economic issues in Russia since President Dmitry Medvedev took office in May.

He believes Russia’s $U.S. 1.3 trillion economy is growing rapidly, but that it is not yet reflected in the level of Russian investment into the United States.

“We have companies in the U.S. that have invested $U.S. 60 billion in Russia. Russian companies have invested $U.S. 5 billion in the U.S. That could be a lot more businesses and a lot more jobs,” Gutierrez said.

The numbers speak for themselves. Though annual two-way trade between Russia and the United States was $U.S. 27 billion last year, the United States accounts for only 4% of the country’s total trade turnover.

Russia’s Economic Development Minister Elvira Nabiullina agreed with her former counterpart that much has to be done. But she thinks it is the U.S. companies that need to be more active.

“The reaction of U.S. companies to the changes that have taken place in our economy is obviously slow,” Nabiullina said. “Of course, there are companies that have been active in Russia for a long time, but their number doesn’t seem to be growing. They are in stand-by mode and they don’t take into account all the positive shifts in our investment climate.”

Despite some hesitation, U.S. exports of merchandise goods to Russia are on the up. They jumped nearly 60% last year. The United States mainly imports engineering and transport products as well as electronics.

Russia mainly exports oil and gas products, and aluminum and steel, to the United States.

First deals

Gazprom has agreed with the Nigerian National Oil company to build a gas pipeline system in the West African country. They also discussed joint ventures in oil and gas production and power plants.

Nigeria is also interested in Gazprom helping to build a cross border pipeline, known as the trans-Saharan gas pipeline.

Russia's major aircraft holding Sukhoi has announced plans to double demand for its Superjet 100.

So far, Sukhoi has 73 orders. Managers promise that more will come in after Saturday's test flight in St Petersburg. Two other Russian airlines are expected to take bookings to over a hundred.