Russia in World Trade

Transition has increased Russia’s openness and trade, but Russia is still a medium-sized trader and not a giant in the field. However, Russia is a very large commodity exporter. Russia’s foreign trade grew exponentially from 1991 to 2012, and then slowed down. Fuel exports with rising commodity prices were a strong driver and led to fluctuations over time. During the first stage of transition, Russia turned to Western Europe, and later China entered the field, both at the expense of trade with the former Soviet Union (FSU). Russia has benefited from China’s growth and could likely benefit from further trade integration with Western Europe as well as China. Russia’s WTO accession took 19 years and led to liberalisation for trade in goods and important institutional reforms. But Russia’s regime for services trade and foreign direct investment (FDI) is more restrictive. The Eurasian Economic Union (EAEU) is an important achievement, but trade with the FSU area had slow growth, and Western Europe and China are Russia’s most important trade partners. In the early 2020s, geopolitical tensions and security issues, including the Russia-Ukraine conflict, are limiting Russia’s trade policy development. The green transition may also be a future key issue for Russian trade, with carbon border taxes and the phasing out of fossil fuels on the global agenda.