The EDB: Russia’s foreign trade with other EAEU countries increased by 10.1% in 2018

In 2018, Russia’s trade with other EAEU countries amounted to US $57.8 billion (up 10.1% on 2017), including exports worth US $38.7 billion (up 12.7%) and imports US $19.1 billion (up 5.3%). This finding is presented in the report titled Main Trends in Russia’s Integrated Development in 2018 distributed by the Directorate for Research at the Eurasian Development Bank (EDB).

The key drivers for exports were favourable foreign trade conditions over the year, Russia’s improved price competitiveness due to the depreciation of the rouble, intensified trade, political, economic, institutional and logistical cooperation within the EAEU, government support to exporters, as well as an increase in external demand. Various non-tariff barriers envisioned by the nation’s economic policy of import substitution in the industrial sector, also contributed to the increase of its trade surplus relative to all other EAEU countries. The expanding mutual trade with the Union countries gave an added impetus to many Russian industries involved in Eurasian cooperation.

Despite an increase in both the volume and value of Russia’s trade with the EAEU countries, the Union’s share in Russia’s foreign trade declined as a result of a surge in its primary exports to other countries. As for the significance and intensity of mutual trade, Russia – because of its size and focus on primary exports – is the least integrated country among the EAEU. However, Russia remains of key importance to all other Union countries as the main supplier of goods (65.3% of mutual exports) and the largest market (31.2% of imports) for EAEU industrial enterprises. Mutual trade also plays an important part in the diversification and development of Russian manufacturers.

The financial channels of integration remain of strategic importance to Russia’s EAEU partners, as Russia is predominantly a net donor. In 2018, despite the depreciation of the rouble over the preceding year and a decline in migrant worker inflows, remittances from Russia to other EAEU countries grew by 6.9% compared to 2017 and amounted to US $4.6 billion. The deteriorated investment climate weakened the investment channel but Russia remains one of the key sources of FDI for the region.

A key task of Russia’s Foreign Policy Concept is to deepen and expand integration within the EAEU. Developing Eurasian integration is also a task set by the government for the International Cooperation and Export national project launched in October 2018. In particular, this project aims to promote an effective division of labour and industrial cooperation within the Union and to increase mutual trade and investment between the EAEU member states by at least 1.5 times. These were the principles Russia adhered to during its chairmanship of the EAEU in 2018.