Russia to redirect trade elsewhere in case of EU-US sanctions

Russian President Vladimir Putin

Russian President Vladimir Putin

Russia will switch to other trade partners if economic sanctions are imposed by the US and the European Union, the Russian President’s Press Secretary Dmitry Peskov has said.

“If one economic partner on the one side of the globe impose sanctions, we will pay attention to new partners from the globe’s other side. The world is not monopolar, we will concentrate on other economic partners,” RIA news quotes Peskov.

According to him, possible economic sanctions by the US and EU on Russia are unacceptable, and the Russian Federation intends to offer further economic cooperation with the European Union.

“We want to keep good relations with the EU and with the US. Especially with the European Union as it is the main economic, investment and trade partner of the Russian Federation. Our mutual economic dependence assumes that we shall have good relations,” the Russian President’s Press Secretary declared. He also emphasized that discussion of global economic problems without involvement of Russia can’t be a complete discussion.

In a Tuesday telephone conversation between Russia’s Minister for Foreign Affairs Sergey Lavrov and the US Secretary of State John Kerry they discussed the situation in Ukraine, and Lavrov said sanctions imposed by the US and the European Union against the Russian Federation are absolutely unacceptable and won’t come without consequences.

According to data from the EU’s Eurostat, Russia accounts for 7 percent of imports and 12 percent of exports in the 28 European Union bloc, making it the region’s third most important trading partner, behind the USA and China.

In turn, the EU is Russia’s biggest trade and investment partner, with trade turnover estimated at $330 billion in 2012.

The introduction of sanctions may lead to a considerable financial losses for the EU. “The set of economic measures which the EU can apply is extremely limited”, says the deputy director of Institute of economic prediction of the Russian Academy of Sciences Alexander Shirov.

“The Russian economy is 3 percent of the world’s gross domestic product. We generate a considerable volume of demand for European products crucial to such countries as Germany, Italy and France. The absence of normal trade and economic relations with Russia essentially means losses for these countries,” the expert concludes.

The US is a much smaller trading partner for Russia, as its trade turnover with Russia was about about a tenth of that with the EU at $38.1 billion in 2012.In 2013, the value of its imports was $26.96 billion, more than double the value of its exports.

Boomerang effect

US based companies that have strong business ties with Russia, including General Electric and Boeing, are becoming increasingly concerned over US plans to harden sanctions against Russia after the association of the Crimea. Businesses are afraid of countermeasures from the Russian authorities, says Bloomberg.

“The CEOs are obviously very concerned about what is happening in Russia,” said John Engler, the president of the US Business Roundtable of major CEOs. “For some companies, it’s a substantial bit of their business. They are watching it very intently, trying to understand what will happen and what the next steps will be.”

The aviation subsidiary of General Electric, GE Capital Aviation Services, has a fleet of 54 airplanes in Russia. The largest aircraft leasing company in the world is watching closely the development of interrelations. Boeing is afraid the demand for airliners will fall if the dispute leads to a decrease in global economic growth.

Some of the world’s biggest companies in the West have already said they would run their businesses with Russia as usual and won’t be involved in the political conflict.

Rex Tillerson, CEO of Exxon Mobil, that has major exploration projects in Russia, said that the Texas-based company, wouldn’t take sides in the conflict between Russia and Ukraine.

On a country level, Latvia has so far voiced the biggest concern over sanctions against Russia, as the adverse effect would hit the country the hardest compared to all the EU member states. The country could lose up to 10 percent of its GDP, as the action against Russia could have a big adverse effect, according to the country’s Prime Minister Laimdota Straujuma. On Monday Latvia also said that the EU should compensate any countries hurt by sanctions against Russia.

On Wednesday the heads of nearly 100 companies from the Business Roundtable association will meet in Washington to discuss the question of sanctions. – RT

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  • Mwalimu

    These are illegal sanctions!!!

    • [email protected]

      moto

  • Jotham

    The USA/Europe are the worst dreamers -economic embargo on Russia is meaningless. Let these westerners go ahead and lets see what happens to their economies. Western thugs are very stupid indeed.

    • gogo

      Kkkkkkk Lol…..
      Check out what an isolated country will be like in next 3years.
      Cant you learn from Zimbabwe????

      • Jotham

        Zimbabwe is too small. Russia has a big economy.

        • Pro Europe

          The bigger they are, the harder they fall. Russia will suffer under sanctions more that the EU/US will from lost trade (which they can get elsewhere). Also Russian oil is not the only oil in the world; countries such as Germany have been relying on Russian oil because we all thought Russia was now reformed. As it is clear now that they are not, we can get our oil elsewhere (read, the gulf states). Trade between China and Russia is tricky as the two are not actually good friends and have some long running territorial disputes and a history of Mongol support that the Chinese are still bitter about.

          PS. This is not the first time the west has taken on Russia, as history has it, Russia has no friends who will stand by it. Maybe Cuba and Zimbabwe (hahahaha)

          • MaraMechavio

            Be balanced.Europe exports more to Russia than Russia does.Right now some CEOs from capitalist countries are saying they won’t be party to the economic sanctions if it comes to that.

          • anon

            The EU has been Russia’s biggest trading block. Know your facts. Europe can export elsewhere.

    • Muzukuru

      What makes you think what Russia is doing is good? Sometimes we need to be objective. Wrong impressions anyway, these protest measures will bite on Russia. Do we still need any imperial era in this age?

  • gogo

    Believe me or Not, Russia out of Euro trade it will be vulnerable to economic crisis..

    • Jotham

      Europe can not stomach any embargo on Russia . Currently Europe is reeling under Austerity measures – their economies are in shambles.

    • MaraMechavio

      It will be worse for EU who have very high standards to maintain.Do you understand world economies?

  • anon

    Given that Russia trades mostly with the West, where is he going to dump his stuff? With third world countries where he would be competing with the Chinese? The economy is already reeling as it is for all the bravado. Look at how the Russian currency has already tanked.

    This is all showmanship just as did under the communist rule even when many people were struggling in their daily lives. We know also who was posturing from this neck of the woods and the price the economy has paid for it.

    • Zimbabwe United

      Strange how we now focus on the sanctions aspect of it and not the issue at hand. Is Crimea part of Russia or not? History has it that Crimea was Russian territory as far back as the rule of Catherine the Great (1762-1796). It only went to Crimea over the last 60 years.

      This is the issue we should be examining. By the way, even then Crimea after the collapse of the Soviet Union has not been existing as some province of Ukraine as was Bophuthatswana or Transkei. Crimea has been existing as an autonomous part of Ukraine.

      • anon

        Harping on about the past to justify this invasion and seizure would mean support redrawing boundaries in which case all countries would have their boundaries redrawn.

    • MaraMechavio

      Equally the worst will also lose out on vital imports and markets for exports.Trade is two way,don’t be daft.

      • anon

        Insults are what people devoid of an argument give so I refuse to debase myself by coming down to your level. Who will lose out more? The big energy consumer they will turn to is China and when China knows that Russia does not have many other energy consumers they will drive a hard bargain and low ball. You cannot sit on reserves forever when you have to make money to run a country. The example is our own situation where we have sold our resources to the Chinese for a song because we are desperate for the money. It appears that you cannot even see the parallels of what is happening in your own yard so ask yourself who is daft.

  • Muzambiringa

    Regardless of whether sanctions are imposed or not, Russia ought to do the prudent thing and begin construction of major pipe and rail lines into the chinese peninsular! It is high time BALANCE was brought to this Anglo-Saxon hegemony and the sting was taken off the WASP (White Anglo-Saxon Protestant).

    • Machichinha

      What makes you think White Christian Orthodox masters of Russia, with millennia of historical and cultural ties with Central and Western European EU nations, will transfer all their trade to other partners? Any Russian redirected trade gaps will only present more import/export opportunities for the same “elsewhere” nations to increase trade with their favourite US and EU partners.

      • MaraMechavio

        Their economies are similar,while their currencies are inflated,which does not make much business sense.Ask yourself why all capitalist economies need developing China?

    • MaraMechavio

      It’s already pumping to China if you didn’t know.

  • MANGWENDE WE CHINHOYI

    The westerners are very good at dreaming. No country can exist on its own. Obviously there will be repercussions of such actions because Russia and China have always been moving in the same plane. The dream to control the whole world is like living in an analogue world while ignoring the digital world. It is a dream. Ngazviperere mudzimba.

    • logic

      That is your illusion that China and Russia move on the same plane. When the UN Security Council voted to condemn Russia’s action in Ukraine the past few days, China voted with the rest in favour on condemnation whereas Russia was the lone dissenter. Just because there may have been Marxist ties in the past, that was the past. In fact they were, and still are, rivals for influence.

      Besides China is realistic because they do not want to encourage this. They already have their own problems with a place like Tibet where there has long been demand for independence . A little education about geo-political history.

      • MaraMechavio

        BIG and FAT lie.China played neutral and abstained,***,knowing of course the Russian veto would carry the day.Duzvi!

        • logic

          MaZimbo madofo – zvituko ndizvo zvevakafa pfungwa kana vagonekwa. China and Russia have already been having disputes over pricing already so what makes you think Russia will now have a better deal if china know that they only have her as the major buyer. Abstention does not mean support- maybe you need to go back to the dictionary and eduacte yourself. Simple denotative meaning will clarify it for you.

      • logic

        Make that China’s abstention; which is as good as voting with the opposition. Not a ringing endorsement of Russia’s actions.

      • Qiniso

        China abstained baLogic. You also need a little education in politics

  • Henry KIng

    Russia will suffer.The USA and EU can survive without reading with Russia.Ok where are they gonna off load their trade to ? China ?Morons.

    • rendani

      on the contrary the EU stands to lose more than RF here. Take Germany for example, 40% of gas and oil is import from RF, and EU alone consumes a 3rd of Russia’s energy export. Uk is heavily funded by Russian Billionaires. not all black and white here mate

      • logic

        Alternate sources. For example, BP has Iran having more gas than Russia and now that the new Iranian leaders have decided to change direction, for economic realities, and make nice with the West, that will be a good alternative. Countries like Canada have rapidly expanded that industry as well and are sitting on tonnes of reserves.Will it increase costs – maybe but that will be passed on to consumers including us in increased costs. As for Russian billionares, one knows where they would rather live as many of them would rather live in the West anyway. If business tanks, they ship out. Some of them had already moved their moved money offshore anyway like the richest Russian who moved his fortune to the British Virgin Island last year. You really have to be naive if you think they have been keeping all their many in Russia. Maybe a strong does of reality would help leaders who are delusional. It is the same mistake Zim made to think it has all the world’s resources and others are so desperate they will beg.

        • MaraMechavio

          Largest Canadian oil and gas outfit was bought by China few years ago for US$15 Billion years ago,you ***.All capitalist economies are quite vulnerable and sickly!

          • logic

            Hey, Canada’s Stephen Harper, under pressure from Canadians who did not want to see China take control of what they view as a strategic resource, backed off from having China control a major part in Athabasca Tar Sands which is where Chinese interests were in. Same thing happened with the potash deal in Saskatchewan Canada that the Chinese were also eager to move on to in You really need to know your facts. That is what happens when you have an educated and engaged public and where democracy functions at a relatively higher level than in places where the wealth that was to secure generations to come is being give way for a a trickle of money.

          • logic

            For your info – you are mainly talking of Mackay River operation. Chinese companies only hold an overall stake estimated at about only 5% of the total of estimated reserves in production. So there goes your argument about having major control.

      • MaraMechavio

        And half Germany automobile exports go to the RF.And EU is economically vulnerable already!

  • munjanja

    You can’t start talking about Zim. Tokyo’s population is three times ours. This is a game for big guys.

  • [email protected]

    All becoz of love for power?my foot!!!!!!!!!China is going west and africa , where to for Russia now , this empty talk and grandstanding has no place in today’s world