Russia to join WTO -- Good for large cap and oil

November 1, 2006

U.S. trade officials say the United States and Russia are getting close to a deal that will open the way for Moscow to join the World Trade Organization (WTO). In addition, 13 global corporations, including Boeing, Ford, and Shell, are urging Presidents Bush and Putin to allow Russia's quick entry into the WTO.

Other related news:

• The Russian State Statistics Service announced that the country's core sectors (industry, construction, agriculture, transport, and retail trade) grew 5.7% through September 2006, up from 4.5% in the same period last year.
• The Russian Finance Ministry said that Russia's foreign debt, including former Soviet-era debt, has been reduced to $50.1 billion.
• The U.S. Congressional Research Service reported that Russia sold $7 billion worth of arms to Asia, Africa, and Latin America in 2005, an increase from $5.4 billion in 2004. France was second ($6.3 billion) and the U.S. was third ($6.2 billion).

What It Means:
Russia’s economy has been very dependent on natural gas exports. Admittance to the WTO would allow Russian businesses greater access to foreign markets, allowing the economy to expand beyond energy. In addition, it would allow foreign companies such as Shell to profit from joint ventures to explore Russia’s natural gas development.

Action Steps:
Russia’s capital markets are too volatile to invest in directly. The safest way to invest in Russia’s growth is through large cap multi-nationals that will profit from the anticipated growth. Ask your financial advisor about it.

Source: Radio Free Europe/Radio Liberty web site, China Daily web site