Chapter 6: Russia’s Regional Free Trade Agreements and Agri-Food Trade After 2014

Abstract

This chapter analyses changes in Russia’s agri-food trade relations after 2014 with a specific focus on regional trade agreements. The introduction of countersanctions against Western countries in 2014 spurred the need to replace some of Russia’s most important foreign food trade partners. Free trade agreements can be effective instruments to boost trade and strengthen ties between countries. Russia is a latecomer in the race for free trade agreements, but a series of agreements have been negotiated since 2015. The portfolio of free trade agreements is still in an early stage, but there is a clear turn to Asia in Russia’s trade. China’s role in total trade as well as in agri-food trade with Russia is considerably strengthened despite the lack of trade preferences so far.

Wither the Greater Eurasian Partnership? Challenges from the East in an evolving world order

“…The EAEU currently has free trade agreements with Vietnam, Singapore, Serbia, and Iran, and talks are expected to be undertaken with India regarding one in the near future 2 . EAEU has established Memorandum of Understanding (MOUs) with other trading blocs like Mercosur, ASEAN, and African Union but they are not binding agreements (Elvestad & Isachenko, 2022). With China, a nonpreferential agreement on trade and economic cooperation has been signed but not a Free Trade Agreement (FTA), as member states remain worried about the latter leading to their markets being flooded with Chinese products and their own products becoming uncompetitive.…”

MFN Yes, MFN No?

“…The assessment of FDI in this research is due to the very nature of the MFN, which, owing to the Marrakesh Agreement (1994), introduced the extension of the principle to foreign investments as well. 14 Finally, the data collected by the organization of Economic Cooperation and Development (OECD), and the Eurasian Economic Union (EAEU) offered by Elvestad and Isachenko 15 helped observe the trend of Russia's trade relations on the international chessboard. It suggested that the country is increasingly distancing from the European market and coming increasingly closer to the Asian one, not only for the commercial benefits of low-cost products, but also for the greater affinity in the political sphere.…”

“…The free trade agreements are still in their early stage, but the Russian trade has shown a clear turn towards Asia. 49 On the other hand, the European market has the largest loss of position in the Russian market, primarily Germany and Italy, in absolute values. Russian interest in RTAs and FTAs clearly increased after the invasion of Crimea.…”

“…These FTAs helped Russia improve its position by (I) creating new markets for the supply of economic materials apart from Europe; (II) expanding hydrocarbon exports to new markets; (III) stimulating the growth of investments in the areas of communication and technological innovation; and (IV) expanding the Russian grain and agricultural market through new customers. 55…”