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JANUARY 14 - 20, 2013
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Trade opportunities rise in Russia New legislation should help Eaton, other Ohio firms grow there; Putin voices opposition to deal Nate Ward, director of the International Trade Assistance Center at Cleveland State University’s Monte Ahuja College of Business.
By GINGER CHRIST gchrist@crain.com
U.S. companies face fewer roadblocks when it comes to trading with Russia, and Northeast Ohio companies are poised to benefit. Thanks to the passage last month of legislation to normalize U.S. trade with Russia, U.S. companies now are on the same playing field as other members of the World Trade Organization, which in August admitted Russia as a member. “We’re optimistic that Russia’s going to be a good market for a lot of American companies, not just Eaton,” said Barry Doggett, senior vice president of public and community affairs for Cleveland-based Eaton Corp. The diversified manufacturer already is “quite active” in Russia, Mr. Doggett said. Eaton recently opened a sales office in Moscow and operates a small manufacturing plant outside Moscow that makes electrical components. Eaton’s Brooklyn plant also exports industrial clutches to customers in Russia. “I think this will help,” Mr. Doggett said. “In general, just opening up the opportunity to trade and reducing trade barriers is a good thing.” In passing the Russia and Moldova JacksonVanik Repeal Act of 2012, lawmakers eliminated Cold War-era sanctions tied to emigration rights that restricted trade with Russia. It should make it easier for U.S. companies to invest in Russian businesses and to enter into joint ventures with Russian companies, and it will lower tariffs on U.S. goods imported in Russia, said
Buckeye bonanza Jooyoun Park, an assistant professor in Kent State University’s department of economics, said Northeast Ohio is well-positioned to take advantage of greater trade with Russia, given the area’s strength in the automotive and rubber industries, which are among the top imports in Russia. “Out of all of the states, Ohio will matter,” she said. “If there’s any big change in the export figure, it will be beneficial to Ohio.” While U.S. exports to Russia only represented 0.7% of the country’s total exports through the third quarter of 2012, exports are on the rise, including from Ohio, federal data show. Ohio’s exports to Russia through the third quarter of 2012 grew by 32% compared to the like period in 2011, while its exports to the rest of the world only increased by 7%, according to the U.S. Department of Commerce. Cleveland State’s Mr. Ward, who is a business consultant with the Small Business Development Center, sees opportunities for Ohio companies in exporting automotive parts as well as aircraft and electrical machinery to Russia, which has the world’s sixth-largest economy in terms of purchasing power. Because Russia is looking to replace its outdated agricultural equipment and needs to support its rapidly growing demand for passenger air travel, Ohio can stand to provide
products to meet those needs. But it won’t be easy.
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McGillicuddy named senior VP and GM of Fox Sports Ohio
Challenges await Mr. Ward said he usually eases companies unfamiliar with exporting to countries such as Russia into places such as Poland as a first step. Poland has taken steps to improve doing business with that nation, such as making it easier to register property, pay taxes and enforce contracts. “It’s just not easy to get in there. You have to invest a lot of time, energy and money to break into that market,” Mr. Ward said of Russia. “Hopefully, normalization of trade will raise their status.” Mr. Ward said U.S. companies have had goods lost in transit to Russia or held indefinitely in customs. He said some companies have developed alternate routes into the country, such as rerouting goods through Finland or Eastern Europe, because trucks entering Russia are less likely to be held up at customs than shipments arriving at ports. “Hopefully, all of those things go by the wayside,” Mr. Ward said. U.S. companies also could be at a disadvantage because the legislation approving permanent normalized trade relations with Russia contains a provision that allows the United States to withhold visas of Russian human rights violators and freeze their financial assets in U.S. banks. After the law was passed, Russian President Vladimir Putin said the move “poisons” the relationship between the two countries. Russia also passed legislation prohibiting U.S. citizens from adopting Russian children and prevents Americans accused of abusing the rights of Russians from entering the country. ■
Francois McGillicuddy, an executive with extensive experience in television and sports media, has been named ON THE WEB Story from senior vice president and www.crainscleveland.com general manager of Fox Sports Ohio. Fox Sports Networks said Mr. McGillicuddy will oversee all aspects of Fox Sports Ohio’s business, including production, programming, advertising sales, marketing and team relations, while also working in conjunction with Fox’s affiliate sales and marketing group on distribution issues. Mr. McGillicuddy also will manage the transition of recently acquired SportsTime Ohio into the Fox Sports portfolio of regional sports networks. Mr. McGillicuddy joins Fox Sports Ohio from Fox’s national cable channel Speed, where he has served as vice president, finance and business operations since 2006. “We’re pleased to have Francois continue his Fox career at Fox Sports Ohio,” said Jeff Krolik, executive vice president of Fox Sports Networks, in a statement. “His wealth of experience working with team partners, as well as his business acumen and proven leadership, will be a terrific asset to our business.” ■ Crain’s on Twitter: @CrainsCleveland
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