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Trade Trends News
10-08-2023
Economist Eric Dor, director of economic studies at the IESEG School of Management, reported on August 4 that EU member states have increased trade with Russia's neighbors, including Kyrgyzstan, Armenia, and Uzbekistan.
Since the EU banned exports to Russia at the start of the 2022 invasion of Ukraine, and given that these countries continue to trade freely with Russia, this has raised concerns that sanctions are being circumvented.
According to data compiled by economists, EU merchandise exports to Russia fell by €34 billion (-38%) between 2021 and 2022 as a result of the sanctions.
However, at the same time, trade with countries that continue to trade freely with the Russian state has grown dramatically: exports of goods from Kyrgyzstan have increased by 345% (by €909 million), from Armenia by 165% (by €1.1 billion), from Uzbekistan (€1.5 billion) +130%, from Kazakhstan (€4.9 billion) +94%, from Georgia (€1.2 billion) +58%, and Turkey (€20.5 billion) +23%. This trend is even intensifying in early 2023.
Belgium is no exception.Between 2021 and 2022, Belgium's exports of goods to Russia fell by €730 million (-16.76%), but increased by €1 billion to Turkey, €299 million to Kazakhstan, €81 million to Uzbekistan, €45 million to Armenia and 45 million euros, and exports of goods to Armenia increased by 34 euro million to Georgia. As in the rest of the EU, the growth of Belgian exports to Russia's neighbors even strengthened.
Eric Dor analyzes, "Therefore, we strongly speculate that goods purchased by these countries from the EU are subsequently re-exported to Russia."
These assumptions are reinforced by the strong growth of these countries' exports to Russia: in euro terms, between 2021 and 2022, Armenia grew by 222%, Turkey by 82% and Georgia by 12%.
The economist added that the risk of circumventing sanctions against Russia is also very high for goods that may have military applications, even if the industry also uses them for other purposes.
He cited the example of electronic integrated circuits: while European exports to Russia fell by 81% in one year, they grew by 3,461% to Kyrgyzstan, 1,313% to Armenia, 221% to Uzbekistan and 193% to Kazakhstan.
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