Countries and regions
The Partnership and Cooperation Agreement between the EU and Russia has been the framework of the EU-Russia relations since 1997 and regulates the political and economic relations between the two parties.
- Russia is the third trading partner of the EU and the EU is the first trading partner of Russia.
- Trade between the two economies showed steep growth rates until mid-2008 when the trend was interrupted by the economic crisis and unilateral measures adopted by Russia, which had a negative impact on EU-Russia trade. Since 2010 mutual trade has resumed its growth reaching record levels in 2012.
- EU exports to Russia are dominated by machinery and transport equipment, chemicals, medecines and agricultural products.
- EU imports from Russia are dominated by raw materials, in particular, oil (crude and refined) and gas. For these products, as well as for other important raw materials, Russia has committed in the WTO to freeze or reduce its export duties.
- The EU is the most important investor in Russia. It is estimated that up to 75% of Foreign Direct Investment stocks in Russia come from EU Member States (including Cyprus).
EU-Russia "trade in goods" statistics
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EU-Russia "trade in services" statistics
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Foreign direct investment
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EU and Russia
Russia and WTO membership
On 22 August 2012 Russia joined the WTO. This is good news as
- it will bring down the level of Russia's import duties to a more reasonable level, thereby improving market access for EU businesses, including service providers,
- it will facilitate investment through a more predictable legislative framework.
- it will also have a gradual positive impact on Russian business as it will improve investment conditions and competition on the Russian market.
- Russian consumers will gain from both lower prices and increased quality due to competition.
To protect certain sectors, Russia both in the lead up to its accession and after has introduced new protectionist measures at a time when a liberalisation of the trade regime would have been expected (for instance the recycling fee for vehicles, the WTO non-compliant import duties and the multiplication of import ban for EU agricultural products like meat and dairy products).
To make sure that the benefits of Russia's WTO accession are realised, it is important that all the commitments are implemented correctly. The EU as a strong supporter of the multilateral regime will work towards this goal.
The European Union and Russia have a strong trade relationship. Bilateral trade and investments continue to grow rapidly.
Since 1997 the Partnership and Cooperation Agreement has been the framework of the EU-Russia relations, regulating the political and economic relations between the EU and Russia. One of the main objectives of this agreement is the promotion of trade and investment as well as the development of harmonious economic relations between the EU and Russia.
The new EU-Russia Agreement - currently under negotiation - should provide a comprehensive framework for bilateral relations with stable, predictable and balanced rules for bilateral trade and investment relations. It will focus on improving the regulatory environment by building upon the WTO rules and strengthen bilateral trade relations. The negotiation of this New Agreement with Russia started in 2008. The negotiations have been stopped in 2012 because no progress could be made in the Trade and Investment part. Today with the deepening of the Customs Union (the European Economic Union since 2015) between Russia, Kazakhstan and Belarus (joined by Armenia and Kazakhstan in 2015) and the difficulties for Russia to fulfill its WTO commitments, it is not clear how further progresses can be achieved in the Trade and Investment field and in general with the New Agreement.
The EU was a strong supporter of Russia's WTO membership since the start of the process to the actual accession on 22 August 2012. Russia's WTO membership will give a major boost to further development of the economic relationship between the EU and Russia and it will also prevent Russia from adopting unilateral tariff hikes as has been the case in the past. Two years after the accession of Russia to the WTO, Russia is still not respecting all its WTO commitments. The EU will use all the available instruments (bilateral and multilateral) to make sure the WTO rules are respected as it is a key element to improve in the long term the trade and investment relation with Russia.
Trading with Russia
- Rules and requirements for trading with Russia
- The EU is present on the ground in Russia
- Trade relations are part of the EU's overall political and economic relations with Russia
- Russia is a member of the World Trade Organisation