Russia’s export downward trend still remains unchanged

Russia's foreign trade turnover which is calculated by the balance of payments method, increased by 2.1% to $60.3bn in January 2013 against January 2012 in response to a 10.1% (to $21.3bn) increase in imports and a 1.7% (to $39bn) decline in export supplies. The balance of trade reduced as a result of mixed dynamics of exports and imports by 13% in January 2013 against January 2012.


Data source: Central Bank of Russia.
The reduction in value of exports was caused by lower export prices against stagnation of physical volumes of exports. The value of Russia's imports increased in January 2013 in response to growth in average import prices against growing physical volumes.

 

Data source: Ministry of Economic Development and Trade of Russia.

Non-CIS countries' share in the Russian foreign trade turnover kept growing to increase to 87% in January 2013 against 85.3% in January 2012. EU countries accounted for 50.4% (49.3%) of the Russia's trade turnover.

 

In March 2013, the European Union published its annual report on trade and investment barriers. According to the report, Russia was included into the list of countries which interfere with the development of European companies through protectionist measures. The European Union's principal claims against Russia relate to the motorcar recycling tax which is regarded as a new tax on imported products. Moreover, it was noted in the report that not all of the technical regulations, sanitary and phytosanitary measures developed for the Customs Union of Russia, Belarus, and Kazakhstan meet the WTO standards, which may seriously impede European companies access to the CU member countries' markets.

 

The European Union urged to observe as soon as possible the terms and conditions of the agreement on exports of wood. Under the agreements concluded during Russia's accession to the WTO, pine and white deal wood are currently exported in accordance with tariff quotas. The EU may annually import from Russia 9.5 million m3 soft-textured woods at a duty rate of 13% and 3.6 million m3 of pine wood at a customs tariff of 15%. Before Russia's accession to the WTO действовала at a rate of 25%. If pine and white deal wood are imported above the established quotas, the export tax would be 80%, i.e. it would be so high that import of pine and white deal wood above the established quotas would be pointless.

 

It was highlighted in the report that Europeans are dissatisfied with delayed issuance of export licenses for tariff quotas. Europeans are facing a problem relating to the fact that according to the Russian Government Order dd. July 30, 2012, No.779, licenses for tariff quotas may be issued to "importers/exporters as leaseholders of timber lands who are entitled to harvest spruce and common pine and have no rent arrears, or those who have entered into an agreement on sales and purchase (supply) of spruce and common pine with such leaseholders". Most commonly, however, Russian companies have such arrears. Consequently, Russian authorities exclude persons in arrears from the list of exporters. However, such persons may operate in the domestic market. These rules prevent Europeans from exercising their right to choose partners on the Russian side.

 

The European Union considers the Russian Federation as a major trade partner. In 2011, Russia accounted for 7.1% of exports (ranked fourth after USA, China, and Switzerland) and 11.8% of imports to the EU ЕС (ranked second after China).

 

Volovik N.P. - Head of Foreign Trade Department