Before turning to the East: why in 2022 Russia increased trade with Europe to a maximum in eight years

In 2022, the trade turnover between Russia and the countries of the European Union grew by 2.3% and amounted to €258.56 billion (about $276 billion at the current exchange rate).

The achieved value was the highest since 2014, as evidenced by the materials of the EU statistical service.

According to the agency, from January to December, the import of European goods into Russia fell by 38.1%, to €55.18 billion (about $59 billion), the lowest level since 2005.

At the same time, Moscow increased sales of its products to the European Union by 24.3%, to €203.38 billion (about $217 billion), which is close to the historical record of 2012 (€203.61 billion).

“During all 12 months, the volumes of deliveries from Russia to the EU were extremely heterogeneous and tended to decrease by the end of the year.

A significant increase in trade turnover was noted only in monetary terms, which may be due to the energy crisis in Europe, which was accompanied by a multiple rise in gas prices and a significant rise in oil prices, ”said Yevgeny Mironyuk, an expert on the BCS World of Investments stock market, to RT.

In addition, as the specialist noted, last year the EU countries introduced restrictions on the import of energy resources, metals and a number of other goods from Russia.

However, before the entry into force of the restrictions, Europe significantly increased the purchase of these products from Moscow, which also affected the final trade statistics, the analyst emphasized.

“The dynamics of exports from Europe to Russia was different.

The sharpest drop came in March, when the European Union began imposing sanctions against Moscow.

As a result, from February to September 2022 alone, the share of supplies of European products to Russia more than halved, from 4% to 1.8% in total EU sales,” Mironyuk added.

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• © Dmitry Melnikov

Recall that in 2022, after the start of a special military operation in Ukraine, the European Union, together with other Western countries, imposed unprecedented sanctions on Russia.

In addition to trade and energy, the restrictions affected the banking and financial sectors, as well as aviation.

Along with this, almost half of Russia's gold and foreign exchange reserves (worth $300 billion) were frozen, and many European companies announced their withdrawal from the Russian Federation.

In total, over the past year, unfriendly countries have already introduced almost 11.5 thousand anti-Russian restrictions.

Of this volume, 2.7 thousand restrictions were initiated by the EU states, according to the global sanctions tracking database Castellum.AI.

To date, Brussels has introduced ten sanctions packages against Moscow.

According to the European Commission, these measures affect about 58% of deliveries of Russian goods to the EU and 49% of European imports to the Russian Federation.

Under such conditions, experts interviewed by RT predict a noticeable decline in Russian-European trade in 2023.

According to TeleTrade analyst Alexei Fedorov, the main reason for the expected decline in trade will be the reduction in gas supplies by Moscow due to the inoperability of the Nord Streams, as well as oil against the background of the embargo and price ceiling imposed by Europe.

As a result, according to the specialist, from January to December of this year, the volume of exports from Russia to Europe will decrease to €160 billion. In turn, after a sharp decline in 2022, imports may not decrease so significantly - to €40-45 billion Fedorov predicts.

“Thus, the volume of mutual trade between Russia and the EU in 2023 can be about €200-205 billion and will be 20% less than in 2022.

Of course, if the conflict in Ukraine ends, then the reduction in trade turnover will be smaller, because the parties will start looking for ways to restore trade ties, ”the analyst suggested.

Trading Alternative

However, today Russia has largely reoriented trade flows from the west to the east.

And we are talking not only about exports, but also about imports, Russian Finance Minister Anton Siluanov said in an interview with RT.

“Russia has already adapted to a number of these restrictions... We have found new sales markets... we are already learning and working in new conditions,” said the head of the Ministry of Finance.

Meanwhile, the European Union is experiencing serious difficulties from the restrictions imposed against Moscow, Siluanov emphasized.

According to him, the lack of Russian hydrocarbons has led to a sharp rise in the cost of energy in the EU, and a number of European companies that previously supplied products to the Russian Federation are now forced to cut production and lay off employees.

• Anton Siluanov on the consequences of anti-Russian sanctions in the West

According to experts, buyers and suppliers from China are actively replacing partners from Europe.

In 2022, China significantly increased imports of Russian energy resources, metals, and timber, and at the same time increased exports of cars, electronics, equipment, and light industry goods to Russia.

As a result, last year the volume of Russian-Chinese trade added 29.3% and for the first time reached $190.27 billion. Imports of goods from China grew by 12.8% to $76.12 billion, while deliveries of Russian products to the Asian republic increased by 43.4% - up to $ 114.15 billion, according to a report by the General Administration of Customs of China.

Earlier, Moscow and Beijing agreed to bring mutual trade to $200 billion in 2024.

However, the target figure can be achieved as early as 2023.

This was stated by Russian President Vladimir Putin on February 22 at a meeting with the head of the office of the Commission of the Central Committee of the Communist Party of China for Foreign Affairs, a member of the Politburo of the Central Committee of the Communist Party of China, Wang Yi.

“There is every reason to believe that we will achieve our goals in terms of trade turnover, perhaps even earlier than we planned: trade turnover is growing.

It is important for both sides,” Putin stressed.

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• © Mikhail Metzel

Moreover, the trade mark of $200 billion can be not only achieved, but also noticeably exceeded by the end of the current year.

This point of view was expressed by Russian Ambassador to China Igor Morgulov in an interview with China Central Television.

“Some experts draw attention to the fact that the $190 billion figure includes only trade in goods.

If we add trade in services here, then we can assume that we have definitely overcome the target milestone already in 2022.

I am convinced that the goal of bringing trade in goods to $200 billion will be easily achieved and overcome this year with a large margin,” the diplomat suggested.

According to Natalia Milchakova, a leading analyst at Freedom Finance Global, taking into account current trends, in 2024 the trade turnover between Russia and China may approach the $250 billion mark. In this case, Moscow will be able to almost completely replace the lost part of the European market in foreign trade, RT interlocutor is sure.

“Our energy resources will now go primarily to China and India, which by 2030 will account for almost a quarter of global oil demand.

This is quite natural.

However, it is also important that Russia generally overcome its dependence on imports of manufacturing products from any countries, develop its own production, and in the future even increase the export of such products to friendly countries, Milchakova concluded.