How EU-Russia-Belarus trade changed in recent years

The European Union continues trading with Russia and Belarus. NV Business examines who makes the most profit from this flow of goods and which products are in demand.

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Quite strange things are taking place on the border between Poland and its eastern neighbors. Polish protesters are blocking cargo shipments to and from Ukraine, while Ukrainian journalists are facing difficulties when trying to document the trade across Poland’s borders with both Belarus and Russia.

Together with German-based MCI analytical company, NV Business examined EU’s foreign trade statistics for 2021-2023. How have the EU’s trade links with Russia and Belarus changed since Russia’s full-scale invasion of Ukraine? What do Europeans still buy and sell to Russians and Belarusians?

First of all, there is no “great betrayal” narrative to be found. Export and import indicators between EU countries and Russia in 2023 significantly decreased compared to the pre-war period. In 2021, Europeans imported goods from Russia worth almost EUR 148 billion ($161.3 billion), whereas this figure fell 3.5 times to EUR 44.4 billion ($48.4 billion) in 2023. However, there was a significant increase to EUR 185 billion ($201.6 billion) in 2022, which is explained by surging energy prices. Supplies from Belarus fell even more, from EUR 5.6 billion ($6.1 billion) in 2021 to EUR 1.4 billion ($1.5 billion) in 2023.

The situation with European exports is a bit more complicated. Direct supplies to Russia decreased in both 2022 and 2023. In particular, the European Union supplied Moscow with goods worth EUR 88.3 billion ($96.2 billion) in 2021 against EUR 38.1 billion ($41.5 billion) in 2023. However, deliveries to Belarus slightly increased, from EUR 6.8 billion ($7.4 billion) in 2021 to EUR 8.1 billion ($8.8 billion) in 2023. Most likely, this is explained by Russia’s attempts to circumvent the EU sanctions — just as it does via several Central Asian countries.

EU import-export with Russia

Who among European countries remains the largest trade partner of Russians? Many European countries increased their spending on purchasing Russian goods in 2022. However, Alexander Siryk from MCI says the monetary indicator is not always objective. There are fluctuating raw material prices or sharp spikes due to certain market constraints. This is exactly what happened to energy providers in 2022, with skyrocketing electricity prices due to the gradual withdrawal of European countries from Russian oil and natural gas imports. In absolute terms (volume of goods imported), only Belgium, Bulgaria, and Greece slightly increased their imports from Russia. However, they also reduced them by several times in 2023.

Russian energy carriers (EUR 29.3 billion ($31.9 billion)), mining and metallurgical products (EUR 7.2 billion ($7.8 billion)), chemical products (almost EUR 3 billion ($3.2 billion)), and processed food (EUR 2.7 billion ($2.9 billion)) continued to be in demand last year. Almost EUR 1 billion ($1.09 billion) worth of jewelry, precious metals and stones were imported from Russia to the European Union. Belgium, Germany, and Italy were the key buyers of these products, Siryk clarifies. Most likely, this concerns diamonds whose imports were restricted by EU sanctions in late 2023. For comparison, Europeans imported EUR 4.6 billion ($5.01 billion) of these products from Russia in 2021.

Read also: Latvia becomes first EU country to ban grain imports from Russia and Belarus

As for exports from Europe to Russia, Germany remains the leader with EUR 8.9 billion ($9.7 billion) against almost EUR 26.8 billion ($29.2 billion) in 2021. According to the results of last year, Italy (EUR 4.7 billion ($5.1 billion)) and Poland (EUR 3.7 billion ($4.03 billion)) round out the top three EU exporters to Russia.

Latvia and Slovenia significantly increased supplies to the Russian market, from EUR 1.9 billion ($2.07 billion) to EUR 2.1 billion ($2.2 billion) and from EUR 0.85 billion ($0.92 billion) to EUR 1.1 billion ($1.2 billion), respectively.

Last year, Russians mostly bought mechanical engineering products (EUR 9.2 billion ($10 billion)), pharmaceuticals (EUR 8.7 billion ($9.4 billion)), chemical products (EUR 7 billion ($7.6 billion)), and agricultural products (EUR 6.7 billion ($7.3 billion)). In total, this accounts for 83% of all Russian imports from the EU.

EU import-export with Belarus

Imports from Belarus to the European Union last year amounted to only EUR 1.4 billion ($1.5 billion). [Belarusian] Dictator Alexander Lukashenko’s largest trading partners in this area include Poland (EUR 438 million ($477.4 million)), Lithuania (EUR 279.5 million ($304.6 million)), Germany (EUR 231.5 million ($252.3 million)), and Latvia (EUR 208 million ($226.7 million)). They provide over 80% of Belarusian exports to the European Union, which mainly include products of the agricultural industry, machine-building complex, chemical industry, as well as resources (wood, glass, mineral wool, etc.).

Read also: Ukraine’s trade flow with Poland – exports and imports overview

Belarusians mostly bought machine-building products, worth nearly EUR 4 billion ($4.3 billion). The lion’s share, most likely, accounts for luxury cars, which are then re-exported to the Russian market. The chemical industry ranks 2nd in terms of the volume of supplies from Europe to Belarus — EUR 1.5 billion ($1.6 billion). Agricultural products and pharmaceuticals also have a significant share.

The EU countries have reduced direct trade with Russia and Belarus. Despite this, the European Union continues to buy Russian gas and oil worth billions of euros, financing the dictatorial regimes of Putin and Lukashenko. In monetary terms, energy carriers make up two-thirds of European exports from Russia. The products of Russia’s mining and metallurgical industry rank 2nd, which, thanks to a powerful lobby, continues to supply metal to European rolling mills. This primarily concerns [Russian oligarch] Vladimir Lisin’s NLMK [Novolipetsk Steel] and [Russian oligarch] Roman Abramovich’s EVRAZ [a steel multinational].

Read also: Russia pivots to new markets: who’s buying?

Belarus is most likely used as one of the countries for “parallel import” of Western components, technologies, and luxury goods. However, Lukashenko’s regime is under almost the same number of sanctions as Putin’s one. Therefore, it has only one advantage: its geographical proximity to Europe. For everything else, there are countries in Asia and the Caucasus, through which Western goods are also supplied.

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Read the original article on The New Voice of Ukraine