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Russia will leave the top ten largest trading partners of the European Union by the end of this year, experts interviewed by Izvestia are sure. In 2023, our country dropped from 5th to 10th place in this list. The permanent mission of the Russian Federation to the EU emphasizes that the reason for this is the sanctions policy of Brussels. In particular, they reported: exports of machinery and equipment to Russia decreased by 55% last year, and exports of chemical products decreased by 18%. Analysts believe that Brazil and Saudi Arabia, in particular, may enter the top ten most important trading partners of the EU in 2024. At the same time, the loss of the European market did not significantly harm Russian exports — over the past two years, the country has significantly increased trade with China, India and Turkey.

How trade between Russia and the EU decreased in 2023

Since February 2022, the EU has imposed 13 packages of sanctions against Russia, which has seriously affected trade and economic relations between the Russian Federation and the association. According to Eurostat, in 2023, the trade turnover between Russia and the EU fell by 65.5%, amounting to about €90 billion (in 2022 — €257.7 billion). Exports of EU goods to our country decreased by 30%, while imports from Russia fell by 75%.

"During 2023, there was a steady downward trend in trade between the EU and Russia, which was the result of Brussels' sanctions policy against our country," the Russian permanent mission to the EU told Izvestia. — As a result of the introduction of anti-Russian restriction packages by the bloc, there was a sharp reduction in mutual trade, which is why, according to the results of the reporting period, Russia dropped from 5th to 10th place in the list of key trading partners of the European Union, passing Turkey, Norway, Japan, the Republic of Korea and India ahead of itself.

Specialists note that Russia's exports to the EU have significantly decreased over the past year. Trade restrictions have particularly affected the supply of hydrocarbons from Russia. Thus, in 2023, purchases of oil and gas by the Union countries decreased by about 80%. The category of "Mineral products" has traditionally occupied a dominant position in the structure of Russian exports to the EU. In 2022, its share in the total value of Russian supplies reached 73%, and by the end of 2023 it dropped to 33%.

The supply of metals has seriously decreased over the year. In particular, imports of Russian aluminum decreased by almost half (from €2.83 billion to €1.48 billion). Also, the total supply of all types of fertilizers fell by more than 40%, and the import of Russian diamonds decreased by 80%.

The import of European goods to Russia has also significantly decreased over the year. The main export item of the European Union to the Russian Federation — supplies of machinery, equipment and vehicles - suffered. The permanent mission indicates that in 2023 purchases fell by 55% (from €16.1 billion to €7.2 billion). European restrictions have affected the supply of chemical products and finished goods to Russia.

— The export of chemical products from the EU to our country (the second most important item of EU exports to Russia) decreased by 18.4% (from €18.2 billion to €14.8 billion). The products of the "Various finished goods" category also lagged slightly, the volume of which decreased by 13.6% (from €6.7 billion to €5.8 billion), the permanent mission of the Russian Federation to the EU noted.

Russian experts noted that food supplies decreased the least and even exports of goods from the Beverages and tobacco category to Russia increased by 20.8% (from €1.83 billion to €2.21 billion).

However, the trend is obvious, according to German MEP Gunnar Beck. For a long time, Russia remained the fourth or fifth most important trade and economic partner of the European Union. According to the politician, the situation may change in less than a year.

— By the end of 2024, Russia may leave the EU's top ten trading partners if sanctions are not lifted. However, their cancellation will not happen before the conflict in Ukraine ends," he told Izvestia.

With whom will the EU strengthen its trade

Experts believe that Russia may soon drop to 11th or even 12th place in the list of the most important trading partners of the European Union. Anna Chetverikova, head of the Center for European Studies at the IMEMO RAS, believes that a ban on the import of metals or, for example, fertilizers may affect the decrease in trade turnover between the Russian Federation and the EU in 2024. By the way, the other day Reuters reported that the European Union will soon propose a new sanctions package against Russia, which may include an embargo on aluminum imports. Its supplies to Europe are estimated at about 500 thousand tons (8% of the total volume).

— The European Union still has the opportunity to introduce measures against some sectors of the Russian economy. If they are strictly limited, of course, the trade turnover will have a negative trend," she told Izvestia. — If approximately the same dynamics continues, Russia may most likely withdraw from the top ten EU trade partners.

Lyudmila Simonova, Head of the Center for Economic Research at the Institute of Latin America of the Russian Academy of Sciences, believes that Brazil can take the place of the Russian Federation. By the way, according to Eurostat, in 2023, the trade turnover of this Latin American country and the EU amounted to about €87 billion.

— Given that our trade turnover with the EU is decreasing to a minimum, Brazil may well replace Russia, because, firstly, it is the world's largest supplier of food, and secondly, in the coming year, the EU and MERCOSUR free trade agreement is likely to be concluded. The EU, after China and the United States, is in third place as Brazil's largest partner," she told Izvestia.

Saudi Arabia can also catch up in this ranking, according to Galina Sorokina, professor of the Department of World Economy and International Economic Relations at the GUU. Riyadh will be able to do this by increasing oil exports to the EU.

— Observing not only the foreign trade statistics, but also the thoroughness with which Eurostat reports on the reduction of trade relations with Russia, it is highly likely that the Russian Federation will not be among the top ten strategic partners of the European Union next year. And taking into account the provision of Europe's needs for petroleum products, it can be expected that Saudi Arabia will most likely take Russia's place," she told Izvestia.

Mexico, whose trade turnover with the European Union is about 79.5 billion euros, as well as Canada and the island of Taiwan, may also be among the ten most important EU partners in the future.

Which markets has Russia reoriented to

The loss of the European market did not become a tragedy for the Russian economy. Since the introduction of the first sanctions, the country has increased trade with other countries, successfully replacing the European Union. The main partners, in particular, were China, India and Turkey. According to the Federal Customs Service, in 2022, Russia's trade turnover with China increased by 28% compared to the previous year, and with Turkey — by 84%. In 2023, Russia and India have almost doubled this figure to a record $65 billion, according to the Indian Statistical Service. Russia has become the second main exporter of goods to India, ahead of only China with supplies worth $ 100 billion. Over the past year, New Delhi has turned out to be one of the main buyers of Russian oil and rough diamonds from our country.

— The turn to the East of the Russian economy turned out to be unprecedented fast. For example, the main branch of Russian exports — energy — was able to increase exports of pipeline gas to China from 4 billion to 22 billion cubic meters of gas from 2020 to 2023, and oil exports to China more than doubled (from $29 billion to $60 billion per year), the president of the National Kirill Babaev, the Coordinating Center for International Business Cooperation.

According to him, the attempts of the EU countries to isolate Russian exports have caused losses only to Europe itself.

— Only in 2023, Russia increased grain exports to Asian countries almost fivefold, and this growth continues. Eastern markets have become the backbone for Russian fertilizers and pulp. As a result, it turned out that in the East of the Russian Federation it can earn significantly more than in the West," Kirill Babayev added.

In addition, gas supplies to Central Asian countries have significantly expanded over the past two years. According to Igor Yushkov, an expert at the Financial University and the National Energy Security Fund, the gas that the European Union did not want to buy will now go to Uzbekistan, Kazakhstan and Kyrgyzstan.

— In Uzbekistan, domestic production is declining, while consumption is growing. They didn't have enough last winter. Central Asia will increase gas imports in the coming years. Uzbekistan is already talking about plans to import up to 11 billion cubic meters of Russian gas per year," he told Izvestia.

According to him, Kazakhstan is in exactly the same position — its own production is falling and consumption is growing, so in the coming years it may sign a contract with Gazprom and increase gas imports from Russia. Kyrgyzstan can also follow this path, the analyst believes.

Source: https://iz.ru/1661351/semen-boikov/tovar-naoborot-rf-ne-voidet-v-top-10-osnovnykh-partnerov-es-po-itogam-2024-goda