Vladivostok Novosti Company
April 17, 1998

Tacoma talks aim to ease Russia trade

by Al Gibbs, The Tacoma News Tribune

Nearly 180 people, one-third of them Russian, met this week bent on eliminating trade barriers between Puget Sound and the Russian Far East.

"It's still very much a niche market," said Don Meyer, deputy executive director of the Port of Tacoma. "But we want to establish the fact that, yes, you can do business in Russia."

The three-day effort by bureaucrats and business executives, in which Meyer is a driving force, operates under the auspices of the Ad Hoc Working Group of the Gore-Chernomyrdin Commission, named after Vice President Al Gore and former Russian Prime Minister Viktor Chernomyrdin.

Talks began more than a year ago, the result in part of the 1994 Vancouver, B.C., summit between Russian President Boris Yeltsin and President Clinton.

"This (Tacoma) meeting will focus quite a bit on port development and port relations," said Ginna Brelsford, Seattle-based director of the working group.

The aim of the project is to persuade the U.S. Congress and the Russian Duma to "change policies that may curb or limit trade relations and investment," Brelsford said.

While Puget Sound trade with the Russian Far East is not large now - about $432 million last year - the market is growing. The Russian Far East has large amounts of natural resources such as gold. Oil and gas exploration on Sakhalin Island is only now beginning to grow.

The Russian Far Eastern Shipping Co. sails regularly from Tacoma to Vladivostok and other Russian ports, and Sunmar shipping line is building a thriving business hauling cargo to Sakhalin Island and other ports from Olympia.

Plus, Russia offers entry ports to the emerging economy of northeast China, which has no easy access to the Sea of Japan and Pacific trade routes. China's northeast coast is largely blocked on the south by North Korea and the north by Russia. Yet Russian ports could provide needed links, Meyer said. While modern container ports are available, they are operating at only about 20 percent of capacity.

"The Russian Far East could truly act as a trade corridor for trade coming out of northeast China's provinces," he said. "If there is enough visibility and enough interest, this is an idea we should support."

Major barriers to trade are the six Russian departments that impose restrictions, inspections or tariffs on cargo. In 1995, it took about nine days to clear cargo through a Russian port.

A recent test of streamlined customs and inspection regulations allowed test consignments of 138 containers, loaded with $5.5 million in cargo, to be cleared in as little as two days or less, Meyer said. It also significantly reduced processing and storage fees.

For shippers, the time and expense needed to move cargo from a ship to a customer are critical factors.

Similar issues must be faced if trade through Russian ports to or from northeast China is to succeed.

"They simply don't have customs procedures that recognize cargo in transit," Meyer said.

Meyer suggests Russia holds the same promise for Puget Sound ports as has America's 49th state.

"The first time I went there, my first impression was that this was Alaska with different characters," Meyer said. "They need everything from houses to food."

Although trade between Puget Sound and Alaska began slowly, these days it involves several billion dollars worth of products every year. Construction of Prudhoe Bay oil drilling modules at the Port of Tacoma pumped hundreds of millions of dollars into Tacoma's economy.

The Russian Far East and its potential connections to northeastern China are the reason the working group's goals are so important, Meyer said.

He plans to schedule a trade mission and working group conference for September or October in both Russia - probably Vladivostok with side trips to Sakhalin Island - and the Chinese city of Harbin.
Other materials of this Issue:
So why is it so hard to invest cash in Russia?
Sakhalin in Brief
S. Koreans seek access to natural gas
Business Chronicle
Panels provide new look in Yuzhno
Vladivostok airlines take advantage of new route to Seoul
Small businesses get EBRD support
Japanese crisis hurts Primorye economy
Struggling in a high-tech world
Protest crowd falls short
Arsenals pose explosive risk
News in Brief
Feds give krai more property powers
Duma seeks to review closed budget
Nazdratenko claims foreign fleets steal Okhotsk fish
Arseniev tornado kills 2
Cherepkov sets alternative election date
Crime Chronicle
3 gunned down in contract killings
Junk cars could bring money and jobs to the city
Canada should try a bake sale
Fast train proves the rails can move cargo quickly
Studio offers space for artists
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