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RUSSIA
has always been difficult for Europe to
live with. Even under the Czars it was at
war with itself over western influence,
which at times was embraced with enthusiasm
then to be rejected as traditional parties
became ascendant.
Despite
the current dispute over the Ukraine, and
the trading disputes that have erupted in
its wake, residual trade between Russia
and the EU is still nothing less than enormous.
The
European Union remains Russia's biggest
trading partner. EU member states account
for 50 per cent of the total Russian exports
and imports. For instance, over the past
decade Russia-EU volume in goods doubled
and reached EUR285.5 billion (US$310.7 billion).
The
value of Russia's goods exported to the
EU has more than doubled from EUR84.92 billion
in 2004 to EUR182.03 billion in 2014 while
Russia's EU imports rose from EUR46.12 billion
to EUR103.48 billion.
But
in 2013, the start of the Ukraine crisis,
trade decreased 3.6 per cent year on year
to EUR326.3 billion. Russian exports fell
four per cent to EUR206.5 billion and Russian
imports fell 2.9 per cent to EUR119.8 billion.
And the downward trend continued thereafter.
The
structure of trade in goods remains unchanged.
In 2014 raw materials accounted for the
big share of Russian exports to the EU,
with Russia's imports consisting mainly
of machinery and transport equipment, chemicals
and related products, various manufactured
goods, and foodstuffs.
In
August 2012 Russia joined the WTO and started
to reduce duties from an average 10 to 7.8
per cent. In such a key sector as automotive
industry, import duties were lowered from
30 to 25 per cent. Upon the expiry of the
seven-year transitional period they will
be reduced to 15 per cent.
It
is estimated that, on average, the reduction
of import duties will enable EU exporters
to save up to EUR2.5 billion annually. The
annual increase of exports of goods originating
in the EU to the Russian Federation is expected
to reach EUR3.9 billion.
Despite
such progress, Russia has chosen not to
participate in the European Union's European
Neighbourhood Policy (ENP), as it aspires
to be an "equal partner" of the
EU as opposed to the "junior partnership"
which is how Russia sees itself in the ENP
relationship.
Consequently,
Russia and the European Union agreed to
create four Common Spaces for cooperation
in different spheres. In practice there
are no substantial differences between these
agreements and the ENP.
The
objective of the common economic space is
to create an open and integrated market
between the EU and Russia. This space is
intended to remove barriers to trade and
investment and promote reforms and competitiveness,
based on the principles of non-discrimination,
transparency, and good governance.
Among
the wide range of actions foreseen, a number
of new dialogues are to be launched. Cooperation
will be stepped up on regulatory policy,
investment issues, competition, financial
services, telecommunications, transport,
energy, space activities and space launching.
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