Download Asia-Pacific Trade Briefs Russian Federation

ASIA-PACIFIC TRADE AND INVESTMENT
REPORT 2015
Supporting Participation in Value Chains
Asia-Pacific Trade Briefs
Russian Federation
Merchandise trade: In 2014, the economy suffered from the combination of international sanctions and declines in
prices for commodities, which comprise a large share of exports. Reduced export receipts and falling purchasing
power and the sharp hike in interest rates designed to stem capital outflows, ultimately culminated in a financial crisis
in the second half of 2014, with the Russian Rouble halving in value. Merchandise exports contracted by -4.9%
compared with an average of 5.6% annual growth between 2010 and 2014. Although exports are highly diversified
across 4457 products and 121 markets – compared to an Asia-Pacific average of 2107 products and 95 partners –
petroleum oils and gases collectively account for over half (60.7%) of all exports. The main export partners are
Germany, China and Japan, which together account for a quarter of exports (25.6%). Slowing commodity demand in
China also weighed on exports. In 2014, merchandise imports contracted by -9.8% as the economy weakened.
Services trade: The Russian Federation’s services exports and imports contracted by -6.1% and -5.4% respectively in
2014 – from average annual growth rates of 7.5% and 12.9% between 2010-2014 respectively. Travel and transport
are amongst the largest sectors, accounting for around half of services exports and imports. Travel bans and
suspension of visa agreements resulting from tensions with the United States and European Union may have
contributed to this sharp contraction in services trade.
Global value chains (GVCs): The share of intermediate goods in trade – a proxy for participation in GVCs – is
much lower in the Russian Federation (15%) than in the Asia-Pacific overall (22%) for imports, and slightly higher in
the Russian Federation (20%) than the Asia-Pacific (18%) for exports. The Russian Federation’s relatively low level of
participation in GVCs results from its status as primary energy-exporting economy which largely imports final goods
such as automobiles and pharmaceutical products.
Foreign direct investment (FDI): In 2013, the oil and gas company British Petroleum acquired a stake in the state
owned Russian oil company Rosneft. This propelled the Russian Federation to the rank of the third largest recipient
of FDI in the world. However, FDI inflows to the Russian Federation contracted abruptly, by -69.7% in 2014. This
partly reflects transition to a longer-term level from the anomalous year prior. Other factors include: geopolitical
instability; international economic sanctions on the Russian Federation; and lower oil and gas prices – the main
investment sector. However, investment from China – the largest single source of investment – remained relatively
strong.
Tariffs: Average MFN applied and effective tariffs at 8.1% and 7.3% are not too dissimilar from Asia-Pacific
averages of 7.4% and 7.4%.
Trade costs: Intraregional trade costs in the Russian Federation have fallen slightly since 2009. It is costlier for AsiaPacific economies to trade with the Russian Federation than with East Asia-3 (China, Japan and Republic of Korea) –
the intraregional benchmark – and with EU-3 (France, Germany and United Kingdom) – the extraregional
benchmark. Based on the UNRC Survey 2015*, the Russian Federation’s trade facilitation and paperless trade
implementation score is at 60.2%, compared to 46.5% for the Asia-Pacific.
Trade agreements: The Russian Federation has 16 trade agreements in force, much higher than the Asia-Pacific
average of 7 agreements. Fifteen per cent of exports are to PTA partners, compared to 35% for the Asia-Pacific.
Fourteen per cent of imports are from PTA partners, compared to 45% for the Asia-Pacific.
Figure 1. Key trade and investment indicators
20
10
Annual Growth (%)
0
-10
-20
- 4.9
1.5
- 9.8
- 1.0
- 6.1
4.8
- 5.4
6.1
- 69.7
- 1.5
Russian Asia-Pacific Russian Asia-Pacific Russian Asia-Pacific Russian Asia-Pacific Russian Asia-Pacific
Federation
Federation
Federation
Federation
Federation
Merchandise Exports
Merchandise Imports
Services Exports
Services Imports
FDI Inflows
-30
-40
-50
-60
-70
2013-2014
2010-2014
*Country notes summarising results of the UNRC Survey 2015 are available at: http://unnext.unescap.org/UNTFSurvey2015.asp
Figure 2. Top merchandise markets
25
Figure 3. Top merchandise products
25
Japan; -3.2
20
15
Italy; 4.6
20
Poland; -3.3
Belarus; 4.7
Ukraine; -3.5
Poland; 5.0
15
United States; 5.1
United States; -3.6
Netherlands; 5.2
10
Italy; -4.4
Turkey; 5.5
Belarus; -5.3
Japan; 5.5
5
5
Germany; -14.2
China; 9.0
China; -19.0
-25
Germany; 11.1
0
-20 1
-15
-10
-5
Imports (%)
0
5
10 2
Wheat and meslin.;
0.8
Semi-finished
products of iron or
n; 1.2
Diamonds,
whether or not
worked, bu; 1.2
15
Automatic data
processing
machines ; -1.3
Commodities not
specified
according; -1.9
Telephone sets,
including
telephone; -2.4
Parts and
accessories of the
motor ; -3.1
Medicaments
(excluding goods
of hea; -3.5
Motor cars and
other motor
vehicles; -5.9
Unwrought
aluminium.; 1.8
Coal; briquettes,
ovoids and simila;
2.7
Commodities not
specified
according; 4.0
Petroleum gases
and other gaseous
h; 8.6
Petroleum oils and
oils obtained fr;
19.0
Petroleum oils and
oils obtained fr;
33.1
1 0
-10
10
Exports (%)
20
Imports (%)
Figure 4. Trade in goods by their use
30
2
40
Exports (%)
Figure 5. Foreign direct investment
100
90
90
80
36
70
60
50
70
64
77
20
40
30
20
44
18
10
12
0
22
15
Value in USD billions
Total Exports (%)
80
13
8
Exports
Raw Materials
70
60
50
40
30
Russian
Asia-Pacific
Russian
Asia-Pacific
Federation
Federation
20
2011
Imports
Intermediate Goods
Final Goods
Figure 6. Tariffs
2012
FDI Inflows
2013
2014
FDI Outflows
Figure 7. Trade costs
100
110
90
100
Ad valorem equivalent (%)
80
70
Rate (%)
0
Unwrought nickel.;
0.8
Articles of apparel,
clothing acces; -1.0
Republic of Korea;
-3.6
10
Taps, cocks, valves
and similar app; 0.9
Petroleum oils and
oils obtained fr; 0.9
Footwear with
outer soles of
rubber; -0.9
Republic of Korea;
3.4
France; -3.2
60
50
40
30
20
80
70
60
10
0
90
8.1
7.3
MFN
Applied
Effectively
Applied
Russian Federation
Asia-Pacific
50
2009
Russian Federation
2010
2011
East Asia - 3
2012
EU-3
Sources: Trade and tariff data were accessed through WITS. FDI data was accessed through UNCTADstat.
Notes: Trade data follows the HS2007 classification. Mirror data is used. Products are defined at the 6-digit level.
Definitions: Primary, intermediate, consumer, and capital goods are defined using UNCTAD System of Accounts. Final goods are defined as the sum of
consumer and capital goods. Bound tariff is the maximum most favoured nation (MFN) tariff permitted under WTO obligations. MFN applied tariff is the
tariff applied on imports among WTO members. Effectively applied rate is the lowest tariff available, i.e. preferential rates where available.
Authors: Aman Saggu and Luca Parisotto; comments from Mia Mikic, Witada Anukoonwattaka, Rajan Ratna, and Adam Heal; contact: [email protected].