“We are against trade wars”: Russian trade turnover with the countries of the Shanghai Cooperation Organization grew to $ 150 billion

The volume of trade between Russia and the countries of the Shanghai Cooperation Organization reached $ 150 billion. This was announced on Saturday, November 2, by Russian Prime Minister Dmitry Medvedev at a meeting of the Council of Heads of Government of the SCO countries in Uzbekistan.

“In 2001, when we signed the agreement on the establishment of the Shanghai Cooperation Organization, our trade turnover with the People’s Republic of China amounted to about $ 10 billion. Now, in total, trade between Russia and all SCO countries is almost $ 150 billion,” Medvedev stated.

The Shanghai Cooperation Organization unites Russia, China, India, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Pakistan. In 2018, the total GDP of all eight countries reached $ 18 trillion. Over the entire period of the SCO's existence, the indicator has grown by almost 10 times. As Dmitry Medvedev noted, economic cooperation between the countries continues to intensify even in the face of trade wars and growing protectionism.

“The conditions in which we operate are not sterile. One way or another, we are under pressure - protectionist methods are used, trade wars are fought and sanctions are imposed. All this does not simplify the working conditions. But even in this difficult situation, development still takes place and trade is growing, ”Medvedev said.

Based on the results of the meeting, the organization’s participants approved a new version of the program of multilateral trade and economic cooperation until 2035 to improve trade dynamics. It is about partnerships in areas such as trade, investment, transport, industrial production, environmental protection, agriculture, food security and digitalization.

Currently, the organization’s work is aimed at strengthening open trade between member countries. At the same time, the SCO members are actively opposing global trade wars. This was announced in early September by the SCO Secretary General Vladimir Norov.

“Unfortunately, individual states see in trade wars and other sanctions measures a panacea in solving pressing political and economic problems,” said Norov. “We are against trade wars, it contradicts the peaceful nature of our organization.”

Recall that in 2018, a trade war began between China and the United States - the two largest economies in the world. The States accused China of illegally acquiring American technology and increased duties on Chinese goods imported into the country. Beijing has introduced a response. After a series of negotiations in May 2019, Washington went on to aggravate the conflict: in addition to introducing new duties, American technology companies began to stop cooperation with Huawei. In August, the countries again failed to find a compromise on the terms of the trade deal and in September introduced new mutual restrictions.

Following the results of regular negotiations in October, China and the United States were still able to partially agree on the terms of the trade deal. Meanwhile, experts continue to warn of the risks to the global economy from the intensification of trade wars.

As previously stated by the managing director of the International Monetary Fund (IMF) Kristalina Georgieva, tariff wars have virtually stopped the growth of world trade. As a result, by 2020, the global economy may be missing $ 700 billion.

“For the global economy, the combined effect of trade conflicts could mean a loss of about $ 700 billion by 2020, or about 0.8% of global GDP,” said Georgieva.

In its latest report, the World Trade Organization (WTO) downgraded its forecast for world trade growth in 2019 from 2.6% to 1.2%. The value is expected to be the lowest in 10 years.

Meanwhile, trade between the SCO member countries continues to grow rapidly. According to the FCS, in 2018, the volume of trade between Russia and members of the organization immediately increased by 21%.

In general, the organization’s states account for more than 20% of Russian goods turnover. At the same time, China remains the key trading partner of Moscow in the SCO (with a share of 15.7%).

In 2018, the volume of Russian-Chinese trade turnover reached a historic maximum and exceeded $ 108 billion. It is expected that by 2024 the figure could reach $ 200 billion.

In the coming years, one of the key drivers of trade growth and financial partnership between Russia and the SCO countries may be the transition to national currency settlements within the organization.

“It is very important to highlight issues of financial infrastructure. I want to draw attention to the proposal of the Kazakh side to develop specific steps to switch to mutual settlements in national currencies within the framework of the Shanghai Cooperation Organization. This is a good initiative, it needs to be worked out, ”said Dmitry Medvedev.

The head of government invited the SCO participants to discuss the possibility of switching to settlements in national currencies at the beginning of 2020 at a meeting in Moscow.