_ Yuri Kofner, junior economist, Institute for Market Integration and Economic Policy. Vienna-Munich, March 2020.
In 2010, Belarus, Kazakhstan and Russia incepted a customs union, which, in 2015, they transformed into the Eurasian Economic Union (EAEU), along with the accession of Armenia and Kyrgyzstan. Its declared aim is to create common single market for the free movement of goods, services, labor, capital and digital data.
Facilitating access to the Russian market, which in 2018 amounted to USD 4.1 trillion in PPP (87 percent of the EAEU’s GDP) with a combined population of 147 mln people (80 percent of the Union’s total population), was one of the main reasons for Armenia, Belarus, Kazakhstan and Kyrgyzstan to decide in favor of participating in the Eurasian integration project. The Russian Federation is indeed an important trading partner for the other EAEU member states. In 2018 it accounted for 8.6 to almost 40 percent of their export geography and for 26 to almost 60 percent of their geographic import structure (Charts 1 and 2, Table 1).
Chart 1. Share of Russia in the geographic export structure of Armenia, Belarus, Kazakhstan and Kyrgyzstan (2010-2018, in percent of total)
Source: WITS (UN Comtrade) and author’s calculations.
Chart 2. Share of Russia in the geographic import structure of Armenia, Belarus, Kazakhstan and Kyrgyzstan (2010-2018, in percent of total)
Source: WITS (UN Comtrade) and author’s calculations.
However, in 2014, in reaction to Western sanctions, the Russian Federation adopted a ban on food imports from various Western countries and introduced a protectionist industrial import substitution policy. These unilateral steps by Moscow are often criticized as the main obstructions to the declared free movement of goods within the EAEU by de-facto creating a “two-tier customs union” and by skewing the formally unified foreign trade policy.
Therefore, the aim of this article is to identify, whether the four other member states of the Eurasian Economic Union – Armenia, Belarus, Kazakhstan and Kyrgyzstan – were able to benefit from their participation in the Eurasian integration process and from Russia’s unilateral countersanction policy. This we will do by mainly examining their market share in various product group imports to the Russian Federation.
Russia’s countersanction and industrialization policy
Russia’s protectionist policy was officially implemented starting in 2014 as a reaction to sanctions imposed by the Western international community over Crimea and the Ukrainian crisis. Here, two sub-policies should be differentiated:
Firstly, from 2014 onwards, import bans on agri-food products, primarily fruits and vegetables, animal meat products and dairy products, from the USA, the EU, Canada, Australia, Ukraine, Norway and various Balkan states were adopted. Moscow considered these restrictions the most effective way to harm those economies that imposed sanctions on Russia, without inflicting too much self-harm, and to make the country more self-sufficient in the agri-food sector, which is in line with “Russia’s Food Safety Doctrine” from 2010. At the same time, their aim is also to redirect import flows to those countries that have not imposed sanctions against Russia – including the EAEU member states.
Secondly, in 2014 the Russian government introduced the import substitution program “Industry Development and Increasing its Competitiveness”, which from 2018 onwards is also often referred to as the Russian “localization” program or policy. It has the aim to reduce imports of 800 foreign products and to substitute them with selected domestic products by 2020. It is likely that the program, and in general the entire policy aimed at import substitution, will be extended until 2024. In most manufacturing industries, the share of domestic products should exceed 70 percent by 2024: in particular, in energy and heavy engineering – 81.7 and 73 percent respectively, in the electrical and cable industries – 80.2 percent. In oil and gas engineering it is planned to increase the share to 65 percent, in the machine tool industry – up to 31 percent.
Until now, the success of the policy was rather modest: by the beginning of 2019, Russian manufacturers were able to produce up to 60 percent of components for foreign automotive brands, but not 93 percent, as expected. Other markets did not show such results either: oil and gas engineering still depends on imports at 71 percent, machine tools – at 93 percent, medicine – at 73 percent, the light industry – at 78 percent, the timber industry – at 87 percent.
Most noteworthy, the program entails restrictions on government procurement and procurement of state-owned enterprises (SOE) of pharmaceuticals, transport vehicles, electronics, telecom and software, defense and engineering. Public procurements are currently subject to import bans (97 products in defense and national security, machine-building, light industry and software), import restrictions (46 products involving medical technology and pharmaceuticals) and preferential treatment for domestic products, including the so called “special investment contracts” (SPICs) for receiving state support companies that decide to open production in Russia.
The other EAEU member states are highly interested in the open access to the Russian public procurement market, as Russia is the leader in terms of state orders among the EAEU countries. In 2018, 87.2 percent of total tender values in the Union were issued by the Russian Federation, by Kazakhstan – 10.35 percent, by Belarus – 1.3 percent, by Kyrgyzstan – 0.48 percent, by Armenia – 0.4 percent. Russian public procurement contracts amounted to USD 108 bln. In 2018 Moscow formally admitted companies from other EAEU member states to participate in its import substitution (localization) program. Moreover, applications for Russian state procurement tenders originating from the other member states formally receive price privileges of 15 percent. Even more importantly, other Eurasian companies are formally allowed to take part in Russian public procurement procedures in the field of defense and security, which in 2018 made up 12.1 percent of the country’s federal budget expenses and 2.7 percent of its GDP.
At the same time, de facto substantial obstacles remain that prevent companies from the other EAEU member states from taking part in Russian tenders: Moscow has introduced heightened requirements for electronic digital signatures and accepts bank guarantees only from Russian banks, although the latter issue should be resolved by the summer of 2020. Further, out of the 45 special investment contracts (SPICs), concluded between 2016 and 2019 and worth together USD 12.5 bln, only one was signed with a daughter company from another EAEU member state – OJSC AMKODOR – a Belarusian engineering company (Chart 3, Table 2).
Chart 3. Structure of Russian special investment contracts (SPICs) by origin country of investing company (2016-2019)
Source: Ministry of Industry and Trade of the Russian Federation and author’s calculations.
Effects of Eurasian integration and the Russian import ban on agri-food products
In order to analyze, if the other EAEU member states either lost or gained from Eurasian integration and from Russian countersanctions in the agri-food sector, we will look at the dynamics of their share in imports to Russia in three categories of agri-food products – 1. fruit & vegetables, 2. animals and products thereof, and 3. dairy products – in comparison to the share of the European Union, the United States and Canada between 2010 and 2018. These product groups are the ones that have been affected by Moscow’s food import ban. The data has been taken from the WITS UN Comtrade data base using the WTO “multilateral trade negotiations” (MTN) classification.
Despite the fact that within the common customs territory the EAEU member states can circulate goods without paying tariff duties, Vinokurov et al. (2015) points out that non-tariff barriers (NTBs) remain a significant obstacle to intra-Union free trade. According to a quantification by Knobel et al. (2019), the ad valorem equivalent of NTBs that other member states experience when importing goods into Russia is on average 3.1 percent for agricultural products and 3.8 percent for food products (Table 7).
From 2013, i.e. the last year before the introduction of the import-ban, the EAEU member states were able to increase their collective share in Russia’s imports of fruits and vegetables from 2.2 percent to 6 percent in 2018. Minsk benefited the most: it was able to increase its share from 1.7 to 4.5 percent. At the same time, the collective share of the EU, the USA and Canada decreased from 30.8 to only 6.6 percent during the study period (Chart 4, Table 3).
Chart 4. Import structure to Russia of fruit & vegetables from EU27, USA, Canada and EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
In 2013 only Belarus accounted for a statistically significant share of animal meat imports to the Russian Federation – 9.3 percent. Contrarily, the EU, USA and Canada together accounted for 43.4 percent of Russian animal product imports. By 2018 their share dropped to 10.1 percent, whereas Belarus was able to increase its share to 34.6 percent. Kazakhstan also managed to win a share of almost one percent in the Russian meat market (Chart 5, Table 3).
Chart 5. Import structure to Russia of animals and products thereof from EU27, USA, Canada and EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
The biggest trade diversion and trade creation effects can be seen in the dairy sector. In 2010 the European Union and the United States accounted for 71.3 percent of diary food imports to the Russian Federation. Although their share began to decrease already since then, ie. in 2013 European dairy products still made up 41.7 percent of Russian imports, they plummeted to almost zero by 2018. Concurrently, the EAEU member states were able to significantly increase their collective share from 39.5 percent in 2013 to 84.1 percent in 2018. Remarkably, Belarussian dairy products alone accounted for 81.3 percent. It is plausible that a large part of dairy products entering the Russian market labeled as “Belarusian”, are actually gray re-exports of European origin. Therefore, it may be unsurprising that especially in this sector Moscow’s unilateral application of sanitary, phytosanitary and veterinary measures caused a recurring trade dispute with Belarus. Between 2015 and 2018 the country’s share in Russian dairy product imports actually decreased slightly from 84.1 to 81.3 percent (Chart 6, Table 3).
Chart 6. Import structure to Russia of dairy products from EU27, USA, Canada and EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
Effects of Eurasian integration and of Russia’s industrial localization policy
We will now consider the change in the share of the other EAEU member states in the structure of Russian imports of selected manufactured product groups between 2010 and 2018 in order to assess if they benefited from participation in the customs and then in the Eurasian Economic Union, as well as from the Russian import substitution policy. For comparison purposes, we will also study the dynamics of the EU, USA, Canada and China. The data has been taken from the WITS UN Comtrade data base using the MTN classification.
And again, despite the fact that customs duties have been canceled inside the EAEU, the other member states continue to experience non-tariff barriers when they export to the Russian Federation. For them, the ad valorem equivalent of NTBs for the import of textile materials and clothing into Russia averages at 2.3 percent, for leather products at 5 percent, for chemical products at 4.8 percent, for transport equipment at 2.1 percent, for electronic equipment and machinery at 3.3 percent, and for manufactures n.e.s. at 2.7 percent (Table 7).
Throughout the study period, in the product group of semi-processed textiles and clothing, we cannot identify significant changes in the shares of the European Union and China in Russian imports. The US-American market share jumped to 3.7 percent in 2014, but by 2018 returned to the initial level of 0.7 percent. Belarus managed to slightly increase its market share from 6.4 percent in 2012 to almost 10 percent in 2018. It is worth noting that the share of Kazakhstan dropped from 3 to 0.3 percent in 2012-2013, though it was able to slowly expand its sales back to 1 percent by the end of the period (Chart 7, Table 4).
Chart 7. Import structure to Russia of textiles & clothing, semi-finished from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
Against the background that the share of China in Russian imports of ready-made clothes gradually decreased over the entire study period and that the European share remained unchanged, the shares of Kyrgyzstan and Kazakhstan fell quite sharply during the customs union period, which may indicate the cessation of re-export of Chinese clothing to Russia through these countries. The Belarussian share also decreased from 7.1 percent in 2012 to 5.1. in 2018. However, with the launch of the Eurasian Economic Union Armenia managed to enter the Russian clothing market: from zero its share increased to 1.4 percent in 2018 (Chart 8, Table 4).
Chart 8. Import structure to Russia of textiles & clothing, finished from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
During the study period, there were no significant changes in the shares of the USA, Kazakhstan and Belarus in Russians import of semi-finished chemical products. The main dynamics was that against the backdrop of a decrease in the share of the EU, the share of China increased (Chart 9, Table 4).
Chart 9. Import structure to Russia of chemicals, semi-finished from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
Similar trends were in the import of finished chemical products into Russia: a slow decline in the share of Europe and an increase in the share of China. For this, one could also observe an increase in the share of Belarus from 1.7 percent in 2012 to 3.5 percent in 2018. The US share as a whole remained relatively unchanged (Chart 10, Table 4).
Chart 10. Import structure to Russia of chemicals, finished from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
During the customs union, in the Russian import of transport vehicles one could observe a sharp increase in deliveries from the USA: from 4.2 percent in 2012 to 20 percent in 2014. However, then declining again with the start of the Eurasian Economic Union, its share has stabilized at about 16 percent by 2018. The share of Europe remained practically unchanged for the entire period, while China expanded slightly with 4.3 to 6.9 percent. Of all the EAEU member states, only Belarus managed to increase its share in 2012-2018 from 2.7 to 5.4 percent (Chart 11, Table 4).
Chart 11. Import structure to Russia of transport equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
In the non-electric machinery and equipment sector, the shares of the European Union and the United States slowly decreased. In 2012-2015, the shares of Belarus and Kazakhstan decreased more noticeably, however, stabilizing during the EAEU (yet Kazakhstan practically left the Russian market). China’s share also fell slightly during the customs union, but with the start of the EAEU it rose to 33.2 percent in 2016, then again fell below 30 percent by the end of the period (Chart 12, Table 4).
Chart 12. Import structure to Russia of non-electric machinery from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
In the electric equipment sector, amid a general decline in the shares of the European Union, the USA and Belarus, the PRC increased its share from 32.2 percent in 2010 to almost half of all Russian electric machinery imports in 2018. The share of Kazakhstan decreased quite drastically from 4.6 percent in 2012 to 0.4 percent in 2018. Despite the decline in 2012-2014, Minsk managed to slightly regain its share in the EAEU period: from 1.7 percent in 2015 to 2.7 percent in 2018 (Chart 13, Table 4).
Chart 13. Import structure to Russia of electric machinery, processed from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
A similar picture could be observed in the import of manufactured articles to Russia: China’s share rose from 32.2 percent in 2010 to almost 50 percent in 2018, while the USA, EU, Belarus and Kazakhstan decreased their presence in the Russian market. The reduction in the share of Belarus in 2013-2014 was rather sharp: from almost 6 to 2.3 percent. However, as member of the EAEU, the country was able to retain its market share at around 2.5 percent (Chart 14, Table 4).
Chart 14. Import structure to Russia of manufactured articles n.e.s. from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
For a more detailed analysis of the question whether other EAEU member states have won from Eurasian integration and the Russian policy of import substitution, we will further examine a narrower list of selected product groups. The data has been taken from the WITS UN Comtrade data base using the “Standard Industrial Classification” (SIC) classification.
In the import of pharmaceuticals (drugs) into Russia, over the studied period we see an increase in the shares of the USA and China against the background of a gradual decrease in the share of the European Union. Moreover, there was a rather noticeable increase in the supply of pharmaceuticals made in China in 2014-15. Then, with the launch of the EAEU, China’s share stabilized at 5.7 percent, while Belarus and Kazakhstan managed to respectively expand their presence and enter the Russian market: from 2015 onwards, their share increased to 1.5 and 0.6 percent, respectively, which may indicate a modest success of the plans for creating a common pharma market in the Union (Chart 15, Table 5).
Chart 15. Import structure to Russia of drugs from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
In the import to the Russian Federation of farm machinery and equipment, against the backdrop of a slow reduction in the EU and US shares and an increase in China’s share, the fluctuations in the share of Belarus were too heterogenous to draw unambiguous conclusions about the effects of Eurasian integration and the Russian industrialization policy on imports from this EAEU member state (Chart 16, Table 5).
Chart 16. Import structure to Russia of farm machinery and equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
In 2014 the Western international community led by the United States and the European Union introduced sanctions on the provision of technology for oil and gas exploration, as well as a ban on loans to Russian oil companies and state banks (including for the purchase of Western drilling equipment). Against this background, the share in total deliveries of oil and gas field machinery from the United States to Russia indeed decreased from 19.1 percent in 2015 to 10.4 percent in 2018. However, this level was still higher than in 2010 (7.6 percent). And the share of European deliveries fluctuated de facto without changes at around 60 percent. China’s share more than doubled from 5.5 percent in 2014 to 12.6 percent in 2018. Belarusian sales of oil and gas field equipment declined from 1.5 percent in 2012 to 0.8 percent in 2018. Kazakhstan de facto left the Russian market in 2012-2013 (Chart 17, Table 5).
Chart 17. Import structure to Russia of oil and gas field machinery and equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
Over the entire study period, the share of deliveries of elevators and moving stairways from the European Union fell from 66.8 to 31.5 percent. China’s share remained more or less unchanged at 23 percent. For this, Minsk managed to increase its share in the structure of Russian imports of elevators from 12.1 percent in 2012 to 24.4 percent in 2018, with a peak of 33.7 percent in 2016 (Chart 18, Table 5).
Chart 18. Import structure to Russia of elevators and moving stairways from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
In the industrial trucks and tractors sector, the share of the EU and Belarus in imports to Russia decreased slightly, while the share of China doubled from almost 5 to almost 11 percent over the study period. In 2016-2018, the United States once again entered the Russian market (up to 1.6 percent) (Chart 19, Table 5).
Chart 19. Import structure to Russia of industrial trucks and tractors from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
From the point of view of such an important sector for the industrial corporation within the EAEU as the metal-cutting machine sector, the share of deliveries from Belarus and Kazakhstan to the Russian market from 2012 to 2018 essentially faded away: from 21.3 to 2.5 percent and from 3.7 to 0.1 percent, respectively. The share of the United States and of the European Union also declined, while China expanded its sales (Chart 20, Table 5).
Chart 20. Import structure to Russia of metalworking machinery and equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
A similar picture could be observed in the electric machinery and equipment sector: China steadily increased its share from 37.1 percent in 2010 to almost 50 percent in 2018, while the shares of the US and EU decreased to 2.3 and 23.3 percent, respectively. The share of Kazakhstan fell sharply in 2013-2013 from 4.2 percent to 0.4 as a result at the end of the study period. Belarus confidently continues to hold a small share of 3 percent (Chart 21, Table 5).
Chart 21. Import structure to Russia of electrical machinery and equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
Along with the creation of the Eurasian Economic Union, Minsk managed to increase its share in the import of motor vehicles and parts to Russia from 0.9 percent in 2014 to almost 3 percent in 2018. Until 2014, the US was also able to increase its share from 4.4 to almost 13 percent, but after that it again fell slightly to 9.3 percent by 2018. The EU’s share remained almost unchanged at around 45 percent, while the PRC slowly increased its supplies in Russian imports of motor vehicles and parts from 1.1 to 3 percent (Chart 22, Table 5).
Table Chart 22. Import structure to Russia of motor vehicles and parts from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
Railway equipment and parts is (another) one example where the other EAEU member states were indeed able to derive obvious benefits from integration and from Russian industrial protectionism. From 2012 to 2018, the shares of Belarus and Kazakhstan increased from zero to almost 14 and almost 6 percent, respectively (Belarus reached even 21.5 percent in 2017). China also entered the Russian railway market, increasing its sales from zero to 3.4 percent. Interestingly, during the period of the existence of the Eurasian customs union, European companies managed to increase their market share tenfold from 5.7 percent in 2010 to over 60 percent in 2014. However, after another small increase in 2015-2016, it declined to 49.1 percent at the end of the period (Chart 23, Table 5).
Chart 23. Import structure to Russia of railroad equipment and parts from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
In the sector of surgical, medical and dental equipment Belarus was also able to increase its modest market share from 0.2 in 2012 to 1 percent in 2018. The shares of the USA and of the EU in Russian imports declined, while, again, China was able to increase its share (Chart 24, Table 5).
Chart 24. Import structure to Russia of surgical, medical and dental equipment from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
Merchandise trade deficit with Russia
Throughout the functioning of the customs union and later the Eurasian Economic Union, the other EAEU member states experienced a negative trade balance with the Russian Federation, i.e. in value terms, they imported more goods from Russia than they exported there. At the same time, with the launch of the EAEU Belarus and Kazakhstan managed to slightly reduce their negative trade balance in comparison with the period of the customs union (Chart 25, Table 6).
Chart 25. Merchandise trade balance of Armenia, Belarus, Kazakhstan and Kyrgyzstan (2010-2018, in USD bln)
Source: EEC Statistics Department.
In addition, it is worth bearing in mind that such asymmetry is not an exceptional feature of Eurasian integration. Within intra-European trade, the EU member states are approximately equally divided into net-exporters and net-importers. Moreover, even such economically sophisticated countries as the United Kingdom, France and Austria have a negative trade balance within the common commodity market.
Conclusion
Several conclusions can be inferred from the above made analysis.
Firstly, all EAEU member states gained from Eurasian integration in combination with Russia’s import ban on Western agri-food products. In particular, Belarus was able to significantly increase its share in Russian imports in all three food groups affected by the ban. In comparison, the export gains of the other member states were much more modest. Nevertheless, it can be stated that Armenia was able to increase its share of deliveries of fruits and vegetables to Russia, Kazakhstan – of meat and dairy products, and Kyrgyzstan – of dairy products.
Secondly, in the industrial manufacturing sector the results were more heterogenous, with the other EAEU member states gaining market shares (in terms of their share of Russian imports) in some sectors, while also losing their shares in other product groups. In some sectors the import shares to Russia remained relatively unchanged. In yet other sectors the other EAEU member states remained absent from the market. It was also possible to observe opposite trends in different time periods, i.e. their share in Russian imports could decrease during the customs union period yet increase under the EAEU. And vice versa. The table below summarizes in which sectors the other EAEU member states visibly either increased or reduced their share in imports to the Russian Federation by the end of the study period (Table 8).
Thirdly, it can be seen that in the industrial sector Belarus was the main beneficiary from Eurasian integration and from the cooldown in the Russo-Western economic relationship. Significant gains on the Russian market were made in such areas as: semi-finished textiles & clothing; finished chemicals (including pharmaceutical drugs); transport equipment – motor vehicles and railroad equipment in particular; and elevators. For comparison, Armenia and Kyrgyzstan were able to clearly increase their market share only in the field of finished textiles & clothing. As part of the EAEU, Kazakhstan was able to significantly increase its share in Russian imports of railroad equipment and also, yet very slightly, of pharmaceutical products. In this regard, it seems logical that it is Minsk and Moscow, which within the Union State strive for even deeper economic integration in comparison to the EAEU format.
Fourth, indeed, during the study period, and especially after 2014, the shares of the EU and the USA in almost all industrial product groups imported into the Russian Federation declined. However, Belarus and Kazakhstan, as well, were forced to reduce their shares in Russian imports of a number of processed goods: Kazakhstan in semi-processed fabric, Belarus in oil and gas field machinery. Both member states reduced their shares in Russian purchases of electric and non-electric machinery, as well as of manufactured articles n.e.s. In all three sectors, the reduction took place during the customs union. Nevertheless, under the EAEU, Nursultan and especially Minsk were sometimes able to either stop the negative trend or even to return to a slight increase.
Table 8. Visible import creation and import diversion affects in selected product groups to Russia from the EU, USA, Canada, China and the other EAEU member states (2010-2018)
| Fruit & vegetables | Animals and products thereof | ||
| Increase | Decrease | Increase | Decrease |
| BLR
ARM KAZ |
EU
USA |
BLR
KAZ |
EU
USA CAN |
| Diary products | |||
| Increase | Decrease | ||
| BLR
ARM KAZ KGZ |
EU
USA |
||
| Industrial products (MTN classification) | |||
| Textiles & clothing, semi-finished | Textiles & clothing, finished | ||
| Increase | Decrease | Increase | Decrease |
| BLR | KAZ | ARM
KGZ |
CHN
USA BLR |
| Chemicals, semi-finished | Chemicals, finished | ||
| Increase | Decrease | Increase | Decrease |
| CHN
|
EU
USA BLR |
BLR
CHN |
EU |
| Transport equipment | Non-electric machinery | ||
| Increase | Decrease | Increase | Decrease |
| USA
BLR CHN |
CHN | KAZ
BLR USA |
|
| Electric machinery | Manufactured articles n.e.s. | ||
| Increase | Decrease | Increase | Decrease |
| CHN | KAZ
USA EU |
CHN | BLR
USA EU KAZ |
| Selected industrial products (SIC classification) | |||
| Drugs | Farm machinery and equipment | ||
| Increase | Decrease | Increase | Decrease |
| CHN
USA BLR KAZ |
EU | CHN | EU
USA |
| Oil and gas field machinery and equipment | Elevators and moving stairways | ||
| Increase | Decrease | Increase | Decrease |
| USA
|
BLR | BLR | EU |
| Industrial trucks and tractors | Metalworking machinery and equipment | ||
| Increase | Decrease | Increase | Decrease |
| CHN
USA
|
EU
BLR |
CHN | BLR
KAZ USA EU |
| Electrical machinery and equipment | Motor vehicles and parts | ||
| Increase | Decrease | Increase | Decrease |
| CHN | KAZ
EU |
BLR
CHN USA |
|
| Railroad equipment and parts | Motor vehicles and parts | ||
| Increase | Decrease | Increase | Decrease |
| EU
BLR KAZ CHN |
CHN | EU
USA |
|
Source: Compiled by the author on the basis of the above analysis.
Fifth, it was above all China, which was able to methodically increase its share in the Russian market in almost all industrial sectors. China is not a member in the Eurasian Economic Union and its “non-preferential” agreement on trade and economic cooperation with the EAEU came into effect in only October 2019, i.e. almost a year after the study period.
Sixth, looking at shares in Russian imports of processed non-agricultural goods, the new small EAEU member states – Armenia and Kyrgyzstan, at first glance, could not gain obvious advantages, neither from joining the EAEU, nor from the Russian localization policy. The only exception is the supply of finished apparel. Yet, the reason for the growth in this product segment, which began in 2015, may lie in the gray re-export of Turkish and Chinese clothing products, respectively. Nevertheless, the impossibility of increasing its share in the Russian market may seem so because of the small size and relatively low competitiveness of these countries. Instead, if we look at the dynamics of export growth to Russia, we see that Yerevan and Bishkek still benefited from Eurasian integration in certain sectors: between 2015 and 2018, Armenia’s exports to Russia increased in semi-finished textiles and clothing, manufactured articles n.e.s. and surgical equipment. Kyrgyzstan’s exports to Russia increased in semi-finished chemicals. Both member states were able to increase their exports to the Russian Federation in finished chemicals and drugs, transport equipment and motor vehicles (Table 9).
At this point, several limitations of the above study need to be emphasized, mainly, that it does not explain the cause-effect relationships in the changes in the shares of imports of various product groups into the Russian Federation. We can only assume a set of causes and their relative significance for the trade diversion and trade creation effects. Of course, Eurasian economic integration was one of the most important among them. Other important factors were Western sanctions and Russian retaliatory protectionism. Another important reason was the fall in world oil prices and the resulting crisis in Russia of 2014-2015, which resulted in a contraction in the country’s purchasing power paired with higher prices for imports from Western countries due to the comparative strengthening of the USD and EUR. At the same time, a relatively coordinated devaluation of the RUB and of the national currencies of Belarus and Kazakhstan occurred, which made their products relatively more price competitive (Chart 26, Table 10).
Chart 26. Real effective exchange rate index of the national currencies of the EAEU member states against foreign currencies ( percent change, 2010 = basis year)
Source: EEC Statistics Department.
Also, this study did not examine to which extent Russian companies proper, i.e. as part of the national import substitution policy, were able to oust foreign competitors, both from far abroad and from other EAEU member states. In the end, one should not forget that some shifts in import flows to Russia are simply related to a decrease or increase in the national competitiveness of individual countries and their industrial sectors: e.g., in the case of the EU, the USA and China, which fits into the general tendency of the global economic center moving east.
In sum, it can be said that other member states indeed benefited from participating in the Eurasian integration process and from Russian protectionism in response to Western sanctions. The most pronounced trade creation effects were in the agri-food sector. But in other manufacturing sectors the other EAEU member states, mainly Belarus and Kazakhstan, were also able to increase their share in the Russian market. Problems with the promotion of their products in various other industrial sectors can also be linked to the fact that Moscow only recently, in 2018, de jure opened its public procurement market for its Union partners. Yet remaining barriers still de facto exclude them from participating in Russian tenders.
Despite the fact that Eurasian industrial policy is still largely left to the national competence of the member states, they, together with the supranational Eurasian Economic Commission (EEC), seek to promote intercountry industrial corporation at the union level. Thus, in July 2018, the prime ministers of the EAEU countries decided to support the transfer of the import substitution policy from the Russian to the all-Union level.
In this regard the EEC periodically carries out studies to identify sectors, which are promising for industrial corporation and joint import substitution. A study by the EEC from 2015, using a gravity model and various other assessment tools, identified metallurgical production of ferrous and non-ferrous metals, production of basic chemical elements and pharmaceutical products, as well as cultivation of plant agricultural products as such promising sectors. This is in line with the observations made in the analysis above on the product groups where Belarus and Kazakhstan were able to increase their shares in Russian imports.
Since 2019, following the successful European experience, discussions have also intensified on the possibility of introducing the legal category of “Eurasian firms” in order to support the joint production of manufactured goods. Along with the aforementioned sectors, further promising directions for the creation of such “societas Eurasicaea” may be the joint production of clothing, elevators, space satellites for remote sensing of the earth, as well as energy storage devices, which are becoming increasingly important in the transition to e-mobility. Thus, in 2010-2018 the joint share of Belarus and Kazakhstan in the import of energy storage devices to Russia increased from zero to 8.6 percent (it peaked at 12.1 percent in 2017). This again relatively confirms the conclusions made in this study. To the author’s opinion, another promising area for intra-EAEU industrial corporation is the extraction and processing of rare earth elements.
In addition, in order to stimulate industrial cooperation in research and development, it was decided in 2016 to create “Eurasian Technology Platforms” in 16 key areas, including the chemical industry, pharmacy, electronics and mechanical engineering.
Cross-sectoral measures to support the industrial corporation in the EAEU are the implementation of the “Digital Transformation Agenda until 2025”, which includes the creation of an electronic “industrialization map” and of an online subcontracting system; as well as export support for the joint entry into the markets of third countries under the common brand “Made in the EAEU”.
Annex
Table 1. Share of Russia in the geographic trade structure of Armenia, Belarus, Kazakhstan and Kyrgyzstan (2010-2018, in percent of total)
| Export to RUS | ||||
| ARM | BLR | KAZ | KGZ | |
| 2010 | 17.1 | 38.8 | 5.3 | 19.4 |
| 2011 | 16.3 | 32.4 | 8.5 | 14.8 |
| 2012 | 21.3 | 34.1 | 7.3 | 14.4 |
| 2013 | 24.0 | 44.6 | 6.9 | 9.1 |
| 2014 | 21.9 | 42.1 | 8.0 | 6.3 |
| 2010-2014 average | 20.1 | 38.4 | 7.2 | 12.8 |
| 2015 | 16.8 | 39.3 | 9.9 | 5.9 |
| 2016 | 22.5 | 46.9 | 9.5 | 7.7 |
| 2017 | 27.0 | 44.4 | 9.6 | 15.1 |
| 2018 | 29.4 | 39.0 | 8.6 | 19.5 |
| 2015-2018 average | 23.9 | 42.4 | 9.4 | 12.0 |
| Import from RUS | ||||
| ARM | BLR | KAZ | KGZ | |
| 2010 | 22.6 | 53.4 | 22.8 | 33.9 |
| 2011 | 22.2 | 56.8 | 42.8 | 33.7 |
| 2012 | 25.7 | 60.0 | 38.3 | 33.4 |
| 2013 | 25.9 | 53.7 | 36.8 | 33.4 |
| 2014 | 25.9 | 54.0 | 33.4 | 32.4 |
| 2010-2014 average | 24.5 | 55.6 | 34.8 | 33.3 |
| 2015 | 30.5 | 55.7 | 34.4 | 30.8 |
| 2016 | 30.9 | 54.9 | 36.3 | 20.3 |
| 2017 | 30.0 | 57.1 | 39.6 | 27.4 |
| 2018 | 26.0 | 59.1 | 39.3 | 28.5 |
| 2015-2018 average | 29.3 | 56.7 | 37.4 | 26.8 |
Source: WITS (UN Comtrade) and author’s calculations.
Table 2. Structure of Russian special investment contracts (SPICs) by origin country of investing company (2016-2019)
| Investor | Country of origin | Product group | Sum of investment (USD mln) | Date signed |
| CLAAS LLC | Germany | Farming machinery and equipment | 12 | 2016 |
| MAZDA SOLLERS Manufacturing Rus LLC | Japan, Russia | Engines and motor vehicles | 43 | 2016 |
| GUILDEMASTER Betailigungen GmbH | Germany | Machine tools | 12 | 2016 |
| HMS Livhydromash JSC | Russia | Oil refining pumps | 19 | 2016 |
| LLC Tomsk Engineering Technologies | Russia | Electric machinery | 19 | 2016 |
| EuroChem – Usolsky Potash Plant LLC | Switzerland (Russia) | Mining and processing of potassium | 1126 | 2016 |
| LLC EuroChem-VolgaKali | Switzerland (Russia) | Mining and processing of potassium | 885 | 2016 |
| JSC Mercedes-Benz Rus | Germany | Motor vehicles | 232 | 2017 |
| Transneft Siberia, JSC | Russia | Equipment for oil pipelines | 45 | 2017 |
| LLC “VILO RUS” | Germany | Pumping equipment | 12 | 2017 |
| LLC AstraZeneca Industries | UK, Sweden | Pharmaceutical products | 16 | 2017 |
| Sanofi-Aventis Vostok CJSC | France | Pharmaceutical products | 13 | 2017 |
| LLC “Geropharm” | Russia | Pharmaceutical products | 21 | 2017 |
| CJSC BIOCAD | Russia | Pharmaceutical products | 46 | 2017 |
| LLC “VESTAS MENUFEKCHURING RUS” | Denmark | Equipment for wind energy turbines | 21 | 2018 |
| LLC NovaMedica | Russia, USA | Pharmaceutical products | 48 | 2018 |
| ZAO Hamilton Standard – Science | USA | Aircraft equipment | 12 | 2018 |
| OJSC “Kovrov Electromechanical Plant” | Russia | Tractors | 12 | 2018 |
| LLC TULACHERMET-STEEL | Russia | Metal rolling | 210 | 2018 |
| PJSC “KAMAZ” | Russia, Germany | Motor vehicles | 717 | 2018 |
| DIMLER KAMAZ RUS LLC | Japan, Russia | Motor vehicles | 77 | 2018 |
| LLC ISUZU SOLLERS | Spain, Russia | Equipment for wind energy turbines | 12 | 2018 |
| VINDAR-RUS LLC | Russia | Polymer products | 13 | 2018 |
| LLC Interpak-M | Switzerland (Russia) | Processing of ammonium | 444 | 2018 |
| JSC EuroChem-North-West | Switzerland | Pharmaceutical products | 82 | 2018 |
| LLC “Octapharma-Pharmimex | Russia | Motor vehicles | 323 | 2018 |
| Hyundai Motor Manufacturing Rus LLC | Korea | Motor vehicles | 258 | 2018 |
| PJSC Uralkali | Russia | Mining and processing of potassium | 552 | 2018 |
| LLC “VetroStroyDetal” | Russia | Equipment for wind energy turbines | 18 | 2018 |
| PJSC AvtoVAZ | Russia | Motor vehicles | 1082 | 2018 |
| JSC NovaVind | Denmark, Russia | Equipment for wind energy turbines | 15 | 2019 |
| LLC Snabpolymer Medicine Nizhny Novgorod | Russia, China | Surgical equipment | 50 | 2019 |
| LLC Gazpromneft-Catalytic Systems | Russia | Catalysts | 329 | 2019 |
| PJSC Uralkali | Russia | Mining and processing of potassium | 1822 | 2019 |
| PJSC Uralkali | Russia | Mining and processing of potassium | 569 | 2019 |
| CJSC Verkhnekamsk Potash Company | Russia | Mining and processing of potassium | 1355 | 2019 |
| LLC Amkodor-Onego | Russia (Belarus) | Forestry equipment | 216 | 2019 |
| SOLLERS PJSC | Russia | Motor vehicles | 116 | 2019 |
| JSC ENERGOPROM – Novocherkassk Electrode Plant | Russia | Electronics | 42 | 2019 |
| Toyota Motor LLC | Japan | Motor vehicles | 309 | 2019 |
| VOLKSWAGEN Group Rus LLC | Germany | Motor vehicles | 951 | 2019 |
| CJSC GM AvtoVAZ | USA | Motor vehicles | 15 | 2019 |
| LLC “AUTOTOR Holding” | Russia | Motor vehicles | 58 | 2019 |
| JSC (n) Volvo East | Sweden | Trucks | 141 | 2019 |
| LLC PSMA Rus | France | Motor vehicles | 110 | 2019 |
| Total | 12479 |
Source: Ministry of Industry and Trade of the Russian Federation and author’s calculations
Table 3. Import structure to Russia of selected agri-food product groups from EU27, USA, Canada and EAEU member states (2010-2018, in percent of total)
| Fruit & vegetables | |||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | |
| 2010 | 26.8 | 1.7 | 0.1 | 0.1 | 1.7 | ||
| 2011 | 28.8 | 1.7 | 0.2 | 0.2 | 0.4 | ||
| 2012 | 30.5 | 1.9 | 0.0 | 0.4 | 0.6 | 0.1 | 0.1 |
| 2013 | 28.4 | 2.4 | 0.0 | 0.4 | 1.7 | 0.0 | 0.1 |
| 2014 | 23.1 | 1.7 | 0.1 | 0.4 | 3.0 | 0.2 | 0.1 |
| 2015 | 6.4 | 0.4 | 0.0 | 0.4 | 1.9 | 0.1 | 0.1 |
| 2016 | 6.9 | 0.4 | 0.0 | 1.0 | 4.2 | 0.3 | 0.2 |
| 2017 | 6.2 | 0.4 | 0.0 | 0.6 | 4.2 | 0.4 | 0.3 |
| 2018 | 6.3 | 0.3 | 0.0 | 0.8 | 4.5 | 0.5 | 0.2 |
| Animals and products thereof | |||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | |
| 2010 | 36.5 | 10.9 | 3.8 | 0.0 | |||
| 2011 | 39.3 | 12.1 | 6.3 | 0.0 | |||
| 2012 | 29.5 | 14.9 | 7.7 | 5.2 | 0.0 | 0.0 | |
| 2013 | 32.5 | 7.2 | 3.7 | 9.3 | 0.0 | 0.0 | |
| 2014 | 10.1 | 5.3 | 5.6 | 14.7 | 0.2 | 0.0 | |
| 2015 | 4.7 | 0.7 | 0.1 | 0.0 | 18.8 | 0.4 | 0.0 |
| 2016 | 5.7 | 0.2 | 0.3 | 0.0 | 27.9 | 0.4 | |
| 2017 | 7.3 | 0.2 | 0.3 | 0.0 | 27.1 | 0.5 | |
| 2018 | 9.4 | 0.3 | 0.4 | 0.0 | 34.6 | 0.9 | |
| Dairy products | |||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | |
| 2010 | 70.1 | 1.2 | 0.1 | ||||
| 2011 | 67.5 | 0.0 | 0.1 | ||||
| 2012 | 46.8 | 0.0 | 0.1 | 34.0 | 0.0 | ||
| 2013 | 41.7 | 0.0 | 0.2 | 38.9 | 0.4 | ||
| 2014 | 28.8 | 0.0 | 0.2 | 51.6 | 0.9 | ||
| 2015 | 1.2 | 0.9 | 84.1 | 0.9 | |||
| 2016 | 0.0 | 0.5 | 83.0 | 0.8 | 0.4 | ||
| 2017 | 0.0 | 0.5 | 80.5 | 1.2 | 0.7 | ||
| 2018 | 0.1 | 0.4 | 81.3 | 1.7 | 0.7 | ||
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
Table 4. Import structure to Russia of various industrial goods from EU27, USA, Canada, China and the EAEU member states (2010-2018, in percent of total)
| Textiles & clothing, semi-finished | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 25.2 | 0.5 | 0.0 | 0.0 | 0.1 | 31.4 | ||
| 2011 | 23.5 | 0.4 | 0.1 | 0.0 | 34.9 | |||
| 2012 | 20.5 | 0.5 | 0.0 | 6.4 | 3.0 | 0.1 | 32.0 | |
| 2013 | 22.2 | 1.6 | 0.0 | 9.2 | 0.3 | 0.0 | 28.7 | |
| 2014 | 23.5 | 3.7 | 0.1 | 7.6 | 0.9 | 0.0 | 28.8 | |
| 2015 | 22.8 | 2.5 | 0.0 | 0.0 | 7.9 | 0.4 | 0.0 | 28.4 |
| 2016 | 25.6 | 0.9 | 0.0 | 0.0 | 10.4 | 0.6 | 0.1 | 31.6 |
| 2017 | 25.8 | 0.8 | 0.0 | 0.0 | 10.6 | 0.9 | 0.0 | 30.7 |
| 2018 | 25.1 | 0.7 | 0.0 | 0.1 | 9.8 | 1.0 | 0.0 | 32.6 |
| Textiles & clothing, finished | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 19.7 | 0.7 | 0.1 | 0.0 | 2.3 | 53.0 | ||
| 2011 | 18.4 | 0.7 | 0.1 | 0.0 | 1.6 | 50.8 | ||
| 2012 | 15.0 | 0.5 | 0.0 | 0.0 | 7.1 | 9.1 | 0.7 | 41.0 |
| 2013 | 15.3 | 0.6 | 0.1 | 0.0 | 6.0 | 0.2 | 0.1 | 46.4 |
| 2014 | 15.2 | 0.6 | 0.0 | 0.0 | 5.0 | 0.3 | 0.0 | 46.1 |
| 2015 | 14.8 | 0.6 | 0.0 | 0.0 | 3.8 | 0.1 | 0.0 | 43.8 |
| 2016 | 16.7 | 0.6 | 0.0 | 0.5 | 5.3 | 0.5 | 0.2 | 40.8 |
| 2017 | 16.5 | 0.6 | 0.1 | 0.8 | 4.9 | 0.5 | 0.3 | 39.4 |
| 2018 | 16.3 | 0.6 | 0.1 | 1.4 | 5.1 | 0.3 | 0.3 | 38.6 |
| Chemical,. semi-finished | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 54.1 | 6.6 | 0.1 | 0.0 | 0.1 | 11.4 | ||
| 2011 | 50.2 | 7.1 | 0.1 | 0.0 | 0.0 | 11.7 | ||
| 2012 | 47.1 | 6.4 | 0.1 | 0.0 | 3.7 | 4.5 | 0.0 | 11.4 |
| 2013 | 49.5 | 7.0 | 0.1 | 0.0 | 2.6 | 4.3 | 0.0 | 12.2 |
| 2014 | 48.6 | 5.6 | 0.1 | 0.0 | 2.9 | 4.8 | 0.0 | 14.0 |
| 2015 | 43.8 | 7.1 | 0.1 | 0.0 | 2.4 | 6.8 | 0.0 | 13.5 |
| 2016 | 46.1 | 5.7 | 0.5 | 0.0 | 3.6 | 4.9 | 0.0 | 15.6 |
| 2017 | 45.7 | 5.9 | 0.1 | 0.0 | 3.5 | 4.2 | 0.0 | 15.6 |
| 2018 | 41.6 | 5.5 | 0.2 | 0.0 | 2.9 | 4.6 | 0.0 | 17.0 |
| Chemicals, finished manufactures | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 72.5 | 5.6 | 0.4 | 0.0 | 0.0 | 5.0 | ||
| 2011 | 72.5 | 5.3 | 0.4 | 0.0 | 0.0 | 5.1 | ||
| 2012 | 70.6 | 5.5 | 0.4 | 0.0 | 1.7 | 0.3 | 0.0 | 5.4 |
| 2013 | 71.7 | 5.4 | 0.5 | 0.0 | 2.3 | 0.0 | 0.0 | 5.0 |
| 2014 | 70.2 | 5.8 | 0.4 | 0.0 | 2.7 | 0.1 | 0.0 | 5.3 |
| 2015 | 67.8 | 6.4 | 0.4 | 0.0 | 2.7 | 0.0 | 0.0 | 5.8 |
| 2016 | 68.8 | 6.3 | 0.5 | 0.0 | 3.1 | 0.1 | 0.0 | 6.1 |
| 2017 | 69.0 | 5.9 | 0.5 | 0.1 | 3.2 | 0.1 | 0.0 | 6.2 |
| 2018 | 67.4 | 5.9 | 0.7 | 0.1 | 3.5 | 0.2 | 0.0 | 6.8 |
| Transport equipment | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 43.6 | 4.2 | 0.3 | 0.0 | 0.0 | 4.3 | ||
| 2011 | 44.2 | 4.1 | 0.3 | 0.0 | 0.0 | 4.8 | ||
| 2012 | 46.9 | 6.2 | 0.6 | 0.0 | 2.7 | 0.0 | 0.0 | 5.7 |
| 2013 | 47.5 | 10.0 | 0.5 | 0.0 | 2.5 | 0.1 | 0.0 | 5.4 |
| 2014 | 42.9 | 20.0 | 0.5 | 0.0 | 2.3 | 0.0 | 0.0 | 5.7 |
| 2015 | 35.1 | 19.4 | 1.2 | 0.0 | 4.1 | 0.0 | 0.0 | 6.8 |
| 2016 | 42.1 | 16.3 | 0.4 | 0.0 | 4.8 | 0.1 | 0.0 | 5.9 |
| 2017 | 42.6 | 15.5 | 0.9 | 0.0 | 5.0 | 0.1 | 0.0 | 5.9 |
| 2018 | 42.6 | 15.9 | 0.2 | 0.0 | 5.4 | 0.1 | 0.0 | 6.9 |
| Non-electric machinery | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 48.2 | 5.7 | 1.0 | 0.0 | 0.0 | 24.9 | ||
| 2011 | 50.4 | 5.7 | 0.9 | 0.0 | 0.0 | 23.3 | ||
| 2012 | 47.6 | 5.3 | 0.9 | 0.0 | 3.5 | 2.4 | 0.0 | 22.0 |
| 2013 | 49.7 | 5.6 | 0.8 | 0.0 | 3.5 | 0.8 | 0.0 | 20.4 |
| 2014 | 49.0 | 4.8 | 0.7 | 0.0 | 2.4 | 1.5 | 0.0 | 21.8 |
| 2015 | 41.8 | 5.9 | 0.7 | 0.0 | 2.1 | 0.2 | 0.0 | 25.3 |
| 2016 | 41.3 | 4.9 | 0.5 | 0.1 | 2.4 | 0.3 | 0.0 | 33.2 |
| 2017 | 43.5 | 4.7 | 0.4 | 0.0 | 2.3 | 0.2 | 0.0 | 30.1 |
| 2018 | 45.1 | 4.5 | 0.5 | 0.0 | 2.4 | 0.4 | 0.0 | 28.9 |
| Electric machinery, processed | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 38.2 | 4.2 | 0.2 | 0.0 | 0.0 | 32.2 | ||
| 2011 | 38.9 | 3.3 | 0.2 | 0.0 | 0.0 | 31.1 | ||
| 2012 | 32.8 | 3.6 | 0.4 | 0.0 | 3.4 | 4.6 | 0.0 | 29.5 |
| 2013 | 32.7 | 3.1 | 0.3 | 0.0 | 2.6 | 0.8 | 0.0 | 36.3 |
| 2014 | 36.0 | 3.3 | 0.3 | 0.0 | 2.1 | 1.6 | 0.0 | 36.2 |
| 2015 | 29.0 | 3.8 | 0.2 | 0.0 | 1.7 | 0.3 | 0.0 | 41.0 |
| 2016 | 29.3 | 3.7 | 0.2 | 0.1 | 2.3 | 0.8 | 0.1 | 40.8 |
| 2017 | 27.4 | 2.8 | 0.2 | 0.0 | 2.6 | 0.6 | 0.0 | 42.9 |
| 2018 | 23.2 | 2.5 | 0.2 | 0.0 | 2.7 | 0.4 | 0.0 | 47.6 |
| Manufactured articles n.e.s., processed | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 37.2 | 11.3 | 0.7 | 0.0 | 0.0 | 32.2 | ||
| 2011 | 39.2 | 11.5 | 0.7 | 0.0 | 0.0 | 31.1 | ||
| 2012 | 36.6 | 10.3 | 0.6 | 0.0 | 6.2 | 1.9 | 0.0 | 29.5 |
| 2013 | 32.7 | 9.6 | 0.5 | 0.0 | 5.9 | 0.9 | 0.0 | 36.3 |
| 2014 | 37.2 | 10.1 | 0.4 | 0.0 | 2.3 | 1.5 | 0.0 | 36.2 |
| 2015 | 32.1 | 11.5 | 0.5 | 0.0 | 2.1 | 0.5 | 0.0 | 41.0 |
| 2016 | 34.5 | 10.4 | 0.6 | 0.0 | 2.7 | 0.6 | 0.2 | 40.8 |
| 2017 | 32.6 | 9.3 | 0.5 | 0.0 | 2.4 | 0.8 | 0.1 | 42.9 |
| 2018 | 31.7 | 9.1 | 0.4 | 0.1 | 2.2 | 0.8 | 0.0 | 47.6 |
Source: WITS (UN Comtrade) using MTN classification and author’s calculations.
Table 5. Import structure to Russia of various industrial goods from EU27. USA. Canada. China and the EAEU member states (2010-2018. in percent of total)
| Drugs | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 72.1 | 5.7 | 0.4 | 0.0 | 2.9 | |||
| 2011 | 72.5 | 5.4 | 0.5 | 0.0 | 0.0 | 3.0 | ||
| 2012 | 72.3 | 6.0 | 0.5 | 0.0 | 0.8 | 0.0 | 3.0 | |
| 2013 | 74.2 | 5.9 | 0.6 | 0.0 | 0.6 | 0.0 | 0.0 | 3.0 |
| 2014 | 71.8 | 6.8 | 0.4 | 0.0 | 0.8 | 0.1 | 0.0 | 3.5 |
| 2015 | 68.3 | 7.4 | 0.5 | 0.0 | 0.8 | 0.0 | 0.0 | 5.4 |
| 2016 | 68.1 | 7.3 | 0.6 | 0.1 | 1.2 | 0.2 | 0.0 | 5.7 |
| 2017 | 68.5 | 7.0 | 0.7 | 0.1 | 1.3 | 0.4 | 0.0 | 5.5 |
| 2018 | 66.4 | 7.2 | 0.9 | 0.1 | 1.5 | 0.6 | 0.0 | 5.7 |
| Farm machinery and equipment | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 57.4 | 6.3 | 1.1 | 0.0 | 0.0 | 9.1 | ||
| 2011 | 57.0 | 6.1 | 1.5 | 0.0 | 0.1 | 10.4 | ||
| 2012 | 50.8 | 6.2 | 1.5 | 0.0 | 6.3 | 0.1 | 0.1 | 10.4 |
| 2013 | 49.4 | 5.7 | 1.0 | 0.0 | 5.9 | 0.0 | 0.1 | 11.1 |
| 2014 | 47.1 | 5.5 | 1.2 | 0.0 | 6.1 | 0.0 | 0.1 | 12.3 |
| 2015 | 38.6 | 4.9 | 0.8 | 0.0 | 5.9 | 0.0 | 0.1 | 12.9 |
| 2016 | 51.3 | 5.2 | 0.7 | 0.0 | 7.8 | 0.1 | 0.1 | 12.5 |
| 2017 | 50.3 | 5.3 | 0.9 | 0.0 | 7.3 | 0.1 | 0.1 | 11.5 |
| 2018 | 48.1 | 4.5 | 0.6 | 6.1 | 0.2 | 0.1 | 12.7 | |
| Oil and gas field machinery and equipment | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 61.9 | 7.6 | 3.2 | 8.1 | ||||
| 2011 | 57.7 | 6.6 | 0.7 | 22.9 | ||||
| 2012 | 65.1 | 6.1 | 0.6 | 0.0 | 1.5 | 0.8 | 0.0 | 10.9 |
| 2013 | 53.0 | 5.7 | 0.9 | 0.0 | 1.7 | 0.1 | 0.0 | 5.5 |
| 2014 | 60.5 | 14.1 | 0.5 | 0.0 | 0.5 | 0.0 | 0.0 | 8.8 |
| 2015 | 49.4 | 19.1 | 0.4 | 0.0 | 0.2 | 0.0 | 8.9 | |
| 2016 | 63.6 | 9.7 | 0.7 | 0.0 | 1.2 | 0.0 | 8.3 | |
| 2017 | 57.7 | 13.4 | 0.4 | 0.0 | 1.3 | 0.0 | 10.1 | |
| 2018 | 63.2 | 10.4 | 0.8 | 0.0 | 0.8 | 0.0 | 0.0 | 12.6 |
| Elevators and moving stairways | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 66.8 | 0.5 | 0.1 | 22.7 | ||||
| 2011 | 69.1 | 0.3 | 0.1 | 21.9 | ||||
| 2012 | 60.1 | 0.2 | 0.1 | 12.1 | 19.7 | |||
| 2013 | 51.5 | 1.2 | 0.0 | 15.0 | 22.4 | |||
| 2014 | 45.6 | 0.2 | 0.0 | 17.6 | 0.0 | 26.5 | ||
| 2015 | 44.7 | 0.2 | 0.1 | 21.0 | 24.7 | |||
| 2016 | 35.8 | 0.1 | 0.0 | 33.7 | 0.0 | 20.9 | ||
| 2017 | 37.2 | 0.1 | 0.0 | 32.0 | 0.0 | 20.2 | ||
| 2018 | 31.5 | 0.1 | 24.4 | 0.0 | 24.9 | |||
| Industrial trucks and tractors | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 81.1 | 0.8 | 0.1 | 4.9 | ||||
| 2011 | 79.5 | 0.6 | 0.6 | 0.0 | 6.5 | |||
| 2012 | 77.4 | 0.5 | 0.3 | 2.1 | 0.0 | 8.0 | ||
| 2013 | 75.3 | 0.7 | 0.2 | 4.6 | 0.0 | 8.8 | ||
| 2014 | 73.9 | 0.8 | 0.6 | 2.8 | 0.0 | 10.3 | ||
| 2015 | 73.6 | 0.5 | 0.8 | 0.0 | 5.0 | 0.0 | 9.3 | |
| 2016 | 79.8 | 0.3 | 0.5 | 3.4 | 0.1 | 8.5 | ||
| 2017 | 77.6 | 1.4 | 0.2 | 2.0 | 0.0 | 9.3 | ||
| 2018 | 75.8 | 1.7 | 0.1 | 1.6 | 0.0 | 10.9 | ||
| Metalworking machinery and equipment | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 51.7 | 7.2 | 0.2 | 0.1 | 0.0 | 17.4 | ||
| 2011 | 55.1 | 6.8 | 0.2 | 0.1 | 0.0 | 20.2 | ||
| 2012 | 39.8 | 4.6 | 0.1 | 0.1 | 21.3 | 3.7 | 0.0 | 14.9 |
| 2013 | 45.7 | 4.9 | 0.2 | 0.0 | 9.3 | 1.2 | 0.0 | 19.9 |
| 2014 | 52.6 | 4.7 | 0.3 | 0.0 | 2.3 | 2.1 | 0.0 | 18.0 |
| 2015 | 48.0 | 3.6 | 0.1 | 0.0 | 1.1 | 0.1 | 0.0 | 18.7 |
| 2016 | 41.3 | 4.0 | 0.1 | 0.1 | 2.2 | 1.5 | 0.1 | 22.3 |
| 2017 | 40.9 | 3.1 | 0.1 | 0.0 | 2.6 | 0.8 | 0.0 | 29.1 |
| 2018 | 40.8 | 3.4 | 0.1 | 0.0 | 2.5 | 0.1 | 0.0 | 29.6 |
| Electrical machinery and equipment | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 37.1 | 2.3 | 0.2 | 0.0 | 0.0 | 34.2 | ||
| 2011 | 38.8 | 2.5 | 0.2 | 0.0 | 0.0 | 31.6 | ||
| 2012 | 33.8 | 2.2 | 0.4 | 0.0 | 3.6 | 4.2 | 0.0 | 30.3 |
| 2013 | 33.1 | 2.6 | 0.3 | 0.0 | 3.0 | 0.7 | 0.0 | 33.4 |
| 2014 | 36.0 | 2.8 | 0.2 | 0.0 | 2.5 | 1.3 | 0.0 | 36.6 |
| 2015 | 28.5 | 2.7 | 0.2 | 0.0 | 2.4 | 0.3 | 0.0 | 42.4 |
| 2016 | 28.3 | 3.0 | 0.2 | 0.0 | 3.0 | 0.6 | 0.0 | 41.8 |
| 2017 | 27.4 | 2.6 | 0.2 | 0.1 | 3.0 | 0.4 | 0.0 | 43.2 |
| 2018 | 23.3 | 2.3 | 0.2 | 0.1 | 3.1 | 0.4 | 0.0 | 47.2 |
| Motor vehicles and parts | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 44.8 | 4.4 | 0.1 | 0.0 | 1.1 | |||
| 2011 | 49.0 | 4.5 | 0.1 | 0.0 | 0.0 | 1.1 | ||
| 2012 | 49.4 | 5.7 | 0.1 | 0.0 | 0.8 | 0.0 | 0.0 | 1.5 |
| 2013 | 49.7 | 10.3 | 0.1 | 0.0 | 1.1 | 0.0 | 1.8 | |
| 2014 | 48.7 | 12.9 | 0.1 | 0.9 | 0.0 | 0.0 | 2.2 | |
| 2015 | 45.0 | 10.5 | 0.1 | 2.6 | 0.0 | 0.0 | 2.2 | |
| 2016 | 46.1 | 9.8 | 0.2 | 0.0 | 3.8 | 0.1 | 0.0 | 2.2 |
| 2017 | 47.0 | 8.7 | 0.1 | 0.0 | 2.2 | 0.1 | 0.0 | 2.9 |
| 2018 | 45.4 | 9.3 | 0.1 | 0.0 | 2.8 | 0.0 | 0.0 | 3.0 |
| Aircraft. and parts, nspf | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 66.9 | 20.1 | 0.5 | |||||
| 2011 | 51.9 | 17.6 | 28.6 | 0.0 | ||||
| 2012 | 69.2 | 25.1 | 4.0 | 0.6 | 0.2 | 0.1 | 0.0 | |
| 2013 | 57.4 | 37.8 | 2.6 | 0.4 | 0.0 | 0.0 | ||
| 2014 | 27.2 | 71.5 | 1.2 | 0.0 | 0.0 | 0.1 | ||
| 2015 | 7.7 | 85.9 | 5.9 | 0.0 | 0.5 | |||
| 2016 | 44.6 | 52.6 | 1.4 | 0.0 | 0.0 | 0.1 | ||
| 2017 | 40.7 | 54.2 | 1.7 | 0.0 | 0.1 | 0.0 | ||
| 2018 | 41.5 | 53.9 | 0.1 | 0.0 | 0.0 | 0.0 | ||
| Railroad equipment and parts | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 5.7 | 0.6 | 0.1 | |||||
| 2011 | 4.5 | 0.5 | 0.0 | 0.0 | 0.2 | |||
| 2012 | 12.5 | 0.6 | 0.0 | 0.3 | 0.0 | 1.0 | ||
| 2013 | 35.2 | 0.5 | 0.0 | 0.0 | 1.6 | 0.5 | 0.6 | |
| 2014 | 60.5 | 0.2 | 2.7 | 0.6 | 0.2 | |||
| 2015 | 63.3 | 0.2 | 5.1 | 0.0 | 0.4 | |||
| 2016 | 64.0 | 0.0 | 7.6 | 0.7 | 1.4 | |||
| 2017 | 38.1 | 0.7 | 21.5 | 2.6 | 0.0 | 0.8 | ||
| 2018 | 49.1 | 0.8 | 0.0 | 14.7 | 5.9 | 0.0 | 3.4 | |
| Spacecraft | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 0.2 | |||||||
| 2011 | 6.5 | |||||||
| 2012 | 22.4 | 0.0 | ||||||
| 2013 | 8.4 | 0.0 | ||||||
| 2014 | 33.8 | 0.2 | ||||||
| 2015 | 37.0 | 63.0 | ||||||
| 2016 | 100.0 | 0.0 | ||||||
| 2017 | 54.7 | 45.3 | ||||||
| 2018 | 98.8 | 1.2 | ||||||
| Surgical, medical. and dental instruments | ||||||||
| EU27 | USA | CAN | ARM | BLR | KAZ | KGZ | CHN | |
| 2010 | 48.9 | 19.6 | 0.4 | 9.8 | ||||
| 2011 | 47.0 | 20.6 | 0.7 | 0.0 | 9.7 | |||
| 2012 | 48.8 | 18.2 | 0.4 | 0.2 | 0.0 | 9.8 | ||
| 2013 | 45.1 | 19.4 | 0.4 | 1.5 | 0.1 | 0.0 | 11.2 | |
| 2014 | 48.1 | 20.5 | 0.2 | 0.4 | 0.2 | 10.5 | ||
| 2015 | 44.8 | 20.3 | 0.1 | 0.6 | 0.0 | 0.0 | 12.1 | |
| 2016 | 46.5 | 16.5 | 0.1 | 0.0 | 0.7 | 0.2 | 0.4 | 13.0 |
| 2017 | 45.0 | 16.8 | 0.1 | 0.1 | 0.8 | 0.0 | 0.0 | 12.9 |
| 2018 | 41.0 | 16.0 | 0.2 | 0.2 | 1.0 | 0.0 | 0.1 | 13.2 |
Source: WITS (UN Comtrade) using SIC classification and author’s calculations.
Table 6. Merchandise trade balance of Armenia, Belarus, Kazakhstan and Kyrgyzstan (2010-2018, in USD bln)
| ARM | BLR | KAZ | KGZ | ||
| 2010 | -8,3 | -6,7 | |||
| 2011 | -11,0 | -10,4 | |||
| 2012 | -11,3 | -8,3 | |||
| 2013 | -6,1 | -8,6 | |||
| 2014 | -6,9 | -12,1 | |||
| 2010-2014 average | -8,7 | -9,2 | |||
| 2015 | -0,7 | -6,7 | -6,0 | -1,2 | |
| 2016 | -0,7 | -4,4 | -5,8 | -0,9 | |
| 2017 | -0,7 | -6,7 | -7,1 | -1,0 | |
| 2018 | -0,7 | -9,6 | -8,0 | -1,2 | |
| 2015-2018 average | -0,7 | -6,9 | -6,7 | -1,1 | |
Source: EEC Statistics Department.
Table 7. Ad valorem equivalents of non-tariff barriers on select product groups experienced by Armenia, Belarus and Kazakhstan when exporting into Russia (in percent)
| ARM | BLR | KAZ | EAEU weighted average | |
| Agriculture | 18.1 | 2.4 | 2.9 | 3.1 |
| Food | 29.8 | 3.2 | 2.2 | 3.8 |
| Textiles and apparel | 2.3 | 2.8 | 1.3 | 2.3 |
| Leather products | 24.7 | 4.3 | 4.3 | 5.0 |
| Chemical rubber and plastic products | 11.9 | 3.8 | 3 | 3.8 |
| Transport equipments | 13.1 | 1.4 | 2.4 | 2.1 |
| Electronic equipment and machinery | 27.6 | 2.5 | 2.2 | 3.3 |
| Manufactures n.e.s. | 4.5 | 2.7 | 2.5 | 2.7 |
Source: Vinokurov et al. (2015) and Knobel et al. (2019).
Table 9. Dynamics of exports of Armenia and Kyrgyzstan to Russia (2015-2018, average annual percentage change)a
| Fruit & vegetables | Animals and products thereof | Dairy products | Textiles & clothing, semi-finished | Textiles & clothing, finished | Chemicals, semi-finished | Chemicals, finished | Transport equipment | Non-electric machinery | Electric machinery | Manufactured articles nes | |
| ARM | 32,0 | 2941,7 | 9,8 | 73,2 | 35,4 | -20,4 | 29,0 | 18,3 | -149,6 | -18,5 | 29,1 |
| KGZ | 37,6 | 700,1 | 39,1 | -20,2 | 6,1 | 9,4 | 8,6 | 0,4 | -193,3 | -14,0 | -44,4 |
| Drugs | Farm machinery and equipment, and p | Oil and gas field machinery and equ | Metalworking machinery and equipmen | Electrical machinery, equipment, an | Motor vehicles, and parts, nspf | Surgical equipment | |||||
| ARM | 34.5 | -41.3 | -2178.6 | -43.8 | 1.8 | 66.6 | 68.5 | ||||
| KGZ | -1071.6 | -1.1 | – | -1616.1 | -16.0 | 60.0 | -53609.4 | ||||
Source: WITS (UN Comtrade) using MTN and SIC classification, author’s calculations. aHuge relative percentage changes of exports in hundreds and thousands of percentage points can be explained by the fact that they actually denote changes in very small absolute numbers.
Table 10. Real effective exchange rate index of the national currencies of the EAEU member states against foreign currencies ( percent change, 2010 = basis year)
| ARM | BLR | KAZ | KGZ | RUB | |
| 2010 | 100 | 100 | 100 | 100 | 100 |
| 2011 | 99.1 | 86.5 | 99.6 | 106.0 | 104.7 |
| 2012 | 94.8 | 80.1 | 104.7 | 105.6 | 107.2 |
| 2013 | 96.2 | 85.9 | 104.8 | 106.2 | 108.5 |
| 2014 | 102.5 | 95.8 | 97.9 | 110.0 | 99.4 |
| 2015 | 108.4 | 92.4 | 102.7 | 115.1 | 82.9 |
| 2016 | 107.6 | 84.7 | 76.4 | 113.2 | 82.6 |
| 2017 | 104.0 | 80.7 | 81.9 | 113.3 | 95.7 |
| 2018 | 104.5 | 81.2 | 80.2 | 114.5 | 88.3 |
Source: EEC Statistics Department.