EU-Russia trade bouncing back - "Russia is not the EU's enemy, despite US rhetoric to the contrary"

Russia is not an enemy of the EU, to the contrary

The EU-Observer reports that after three years in decline due to sanctions, EU-Russia trade relations have picked up 20 percent so far in 2017;

In September, the EU Parliament published a report confirming that this decline continued in 2016 and this news was also reported by EUobserver.

However, the trend has changed in 2017.

Eurostat data from the first seven months of the year shows that this decline has stopped and, in fact, the trend was reversed with an expected increase of 20 percent by the end of the year compared to 2016.

EU-Russia trade was up to €285 billion in 2014. In 2016, this number dropped to €181 billion. In only three years, EU members imported €64 billion less from Russia and exported to it €31 billion less.

This decline affected Germany, Italy, Austria and Lithuania above all, which constitute €14.5 billion less in export towards Russia.

However, Austria, Ireland and Lithuania are the three members that suffered the most in relative terms with declines in export of 51, 50 and 40 percent respectively in two years only. Interestingly,

Luxembourg is the only country that increased its exports to Russia from 2014 to 2016.

The average decline for EU members was 34 percent in import and 29 percent in export with Russia.

The trend was reversed starting in January 2016 when trade with most of EU member states started to recover.

This is evident if we look at data for the half-year period. When we compare the first six months of 2016 with the same period of 2017, we notice that the volume of EU-Russia trade increased by €27 billion. The lion's share is for Germany with an expansion by €6 billion and the Netherlands with €4 billion. The only country that reduced its trade is Malta with a decrease of €400,000.

If we look at the exports only in the first six months of 2017 compared to last year, then the leading countries are Germany (plus €2.6 billion), Italy (plus €739 million) and the Netherlands (plus €707 million). The only countries decreasing their exports are Malta, Cyprus and the United Kingdom.

The behaviour of trading partners may be an indication that the Crimea crisis has been discounted already and that politics will, slowly, adjust.

One of the signals was the critical stand of some EU members to the recent round of secondary sanctions imposed by US Congress on Russia, which could create problems for companies involved in the construction of Nord Stream II.

While it is hard to predict the direction of trade flows in the future, we can state that the positive trend seems to lead towards a normalisation of EU-Russia trade in the coming future despite the unresolved crises in Crimea, Ukraine and US meddling in the EU-Russia relations..

EU-Digest