European Neighbourhood Policy - East - statistics on trade flows with the EU


Data extracted in December 2018.

Planned article update: January 2020.

Highlights

Three out of the six European Neighbourhood Policy-East countries: Azerbaijan, Ukraine and Belarus recorded trade surpluses for goods with the EU-28 in 2017.

In 2017, nearly two thirds of all the goods exported from Moldova were destined for the EU.

Some 1.8 % of all goods exported from the EU in 2017 were destined for the six European Neighbourhood Policy-East countries.

Exports of goods to the EU-28, 2007 and 2017
(% share of total exports)
Source: Eurostat and United Nations (Comtrade)

This article is part of an online publication and presents information relating to recent developments for international trade in goods between the European Union (EU) and the six countries that together form the European Neighbourhood Policy-East (ENP-East) region, namely, Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

The article highlights recent developments in trade flows between the EU and its eastern neighbours over the period 2007-2017, with information on exports, imports and the trade balance. It provides an analysis of trade flows between the EU-28 and the ENP-East countries, detailing the relative importance of trading relations between these two areas; it also presents an analysis by main product group.

The first part of this analysis looks at trade flows between ENP-East countries and the EU-28 from the perspective of the ENP-East countries, using data reported by the ENP-East countries themselves. The subsequent parts of the analysis mirror this approach and look at trade flows to/from ENP-East countries from the perspective of the EU-28 and its Member States. There are differences in the values of trade reported by ENP-East countries and by EU Member States: more information on this phenomenon is provided in the data sources section.

Full article

Importance of the EU as a trading partner for the ENP-East countries

Exports of goods from the six ENP-East countries to the EU-28 were valued at EUR 37.7 billion in 2017, while imports into the six ENP-East countries from the EU-28 were valued at EUR 32.8 billion

There was a quite rapid increase in trading relations for goods between the EU-28 and the ENP-East countries during the period 2007-2017. The combined value of goods exported from the six ENP-East countries to the EU-28 rose overall by 59 % during the period under consideration (including 2016 data for Ukraine in the 2017 data), while the value of goods imported into the ENP-East countries from the EU-28 increased at a slower pace, rising 19 % (see Table 1).

Table 1: Trade in goods with the EU-28, 2007-2017
(million EUR)
Source: Eurostat and United Nations (Comtrade)

These overall developments mask the fact that three of the ENP-East countries — Georgia, Moldova and Azerbaijan — reported strong growth for trade in goods with the EU-28, while trade developments for the other three countries — Armenia, Belarus and Ukraine — were more subdued. Note that all of the data in this article are in current prices and so developments reflect changes in prices (deflation and inflation) as well as volume. In this context it should be noted that the value of exports from some ENP-East countries — notably Azerbaijan — increased or decreased greatly in several of the years for which data are shown largely as a result of price changes for fossil fuels.

Azerbaijan, Ukraine and Belarus recorded trade surpluses for goods with the EU-28 in 2017

Azerbaijan, Ukraine (2016 data) and Belarus recorded trade surpluses for goods with the EU-28 in 2017. There was a marked increase in Azerbaijan’s trade surplus in 2008, which coincided with historically high prices for crude oil and gas, as well as increased capacity for exporting mineral fuels as the Baku-Tbilisi-Ceyhan (Turkey) oil pipeline and the Baku-Tbilisi-Erzurum (Turkey) gas pipeline became fully operational. This spike in the value of exports from Azerbaijan was curtailed by the onset of the global financial and economic crisis in 2009, but there was a rebound in the value of exports and the trade surplus during the period 2010-2014, as exports from Azerbaijan to the EU-28 stabilised at levels that were considerably above those recorded prior to 2008. However, Azerbaijan’s trade surplus with the EU-28 fell in 2015 and again in 2016 before recovering in 2017. For Ukraine, the EUR 1.4 billion trade surplus for goods with the EU-28 in 2016 was the first and only trade surplus during the years shown in Table 1; Ukraine’s trade deficit had peaked at EUR 7.9 billion in 2011. The trade balance for Belarus followed an irregular development: having posted a relatively large surplus for trade in goods with the EU-28 during the period 2007-2008 (peaking at EUR 3.9 billion in 2008), the global financial and economic crisis resulted in a considerable contraction in trade flows (particularly exports) such that the trade situation was almost balanced in 2010. There was a considerable rebound in 2011, as exports from Belarus to the EU-28 almost doubled and a trade surplus of EUR 5.0 billion was recorded; the surplus grew even larger the following year to peak at EUR 6.4 billion. Exports from Belarus to the EU-28 fell by 42.3 % between 2012 and 2013 and this resulted in a small trade deficit. However, this was short lived and Belarus returned to a trade surplus for goods with the EU-28 in 2014 and maintained this through to 2017.

By contrast, the remaining three ENP-East countries recorded deficits for their trade in goods with the EU-28 throughout the period from 2007 to 2017. When trading with the EU-28, the deficit for Armenia was just over EUR 200 million and that for Moldova was around EUR 700 million, while the deficit for Georgia was EUR 1.4 billion.

In 2017, nearly two thirds of all the goods exported from Moldova were destined for the EU-28 as was the case for goods exported from Ukraine in 2016

The EU-28 is a key partner for most of the ENP-East countries in terms of international trade in goods. It was the destination for more than half of all goods exported from Moldova (65.8 %) in 2017 and from Ukraine (also 65.8 %) in 2016, as well as more than half of the goods exported from Azerbaijan (54.0 %) and around a quarter of goods exported from the other ENP-East countries (see Figure 1). Comparing 2007 with 2017, two of the six ENP-East countries — Armenia and Belarus — reported a fall in their shares of exports destined for the EU-28 and the other four an increase. The most notable increases were observed for Azerbaijan (up 25.7 percentage points) and Ukraine (up 28.0 points between 2007 and 2016).

Figure 1: Exports of goods to the EU-28, 2007 and 2017
(% share of total exports)
Source: Eurostat and United Nations (Comtrade)

These close trading links between the EU-28 and Ukraine were also apparent for imports, as more than half (57.1 %; 2016 data) of the goods imported into Ukraine originated from the EU-28. In 2017, the EU-28 also accounted for just under half (49.4 %) of the goods imported into Moldova as well as around one quarter of the total goods imported into Georgia, Azerbaijan and Armenia, with the share below one fifth in Belarus (19.4 %); see Figure 2. Ukraine and Moldova reported a larger share of their imports coming from the EU-28 in 2017 than had been the case 10 years earlier. Georgia and Belarus reported slightly smaller shares of their imported good coming from the EU-28 in 2017 than in 2007, while in Azerbaijan and Armenia this share fell at a more rapid pace.

Figure 2: Imports of goods from the EU-28, 2007 and 2017
(% share of total imports)
Source: Eurostat and United Nations (Comtrade)

Importance of the ENP-East countries as trading partners for the EU

Some 1.8 % of all goods exported from the EU-28 in 2017 were destined for the six ENP-East countries

Looking at trade flows of goods from the perspective of the EU-28, the six ENP-East countries accounted for a relatively small share of the EU-28’s total trade in 2017, some 1.8 % of all exports leaving the EU-28 and some 1.7 % of all imports arriving in the EU-28 from non-member countries (as shown in Figure 3). Having risen between 2007 and 2008, the relative importance of trade in goods with the ENP-East countries peaked at the onset of the global financial and economic crisis, falling rapidly in 2009, after which there were signs of a recovery during the period 2010-2013, while the share of ENP-East countries in the EU-28’s total trade dropped back again in 2014 and 2015 as well as in 2016 for imports. In 2017, these shares rose again slightly, but remained below their pre-crisis peaks, particularly for exports: a comparison with the 2008 peak value shows that the share of the ENP-East countries in the EU-28’s exports in 2017 was 1.0 percentage points lower, while for imports, the share of the ENP-East countries in the EU-28’s total imports in 2017 was 0.3 points lower.

Figure 3: Share of the ENP-East countries in total trade of goods, EU-28, 2007-2017
(% of all EU-28 exports and imports)
Source: Eurostat (DS-018995)

The fluctuation in the relative weight of imports from the ENP-East countries may be linked to overall economic developments within the EU-28, in particular, changes in demand for energy-related products (such as oil and gas) and the price of these products. With a partial recovery in the EU-28 economy there was a marked increase in the proportion of imports originating from oil and gas-rich ENP-East economies in 2011. However, sluggish growth in the EU-28 economy combined with falling oil and gas prices have contributed, at least in part, to the somewhat lower proportion of the EU-28’s imports originating from the ENP-East countries in recent years.

Over the period 2007-2017, the EU-28 recorded a trade deficit for goods with the six ENP-East countries in 2011 and 2015, while its highest surplus in recent years was in 2013

Naturally, these developments were reflected in the EU-28’s trade balance with the six ENP-East countries (see Figure 4). Over the period 2007-2017, the EU-28 generally ran a surplus for its trade in goods with the six ENP-East countries (based on an aggregation of their data). Between 2007 and 2009 this surplus narrowed from EUR 6.3 billion to EUR 4.0 billion. There was a rapid expansion in the value of goods imported by the EU-28 from the ENP-East countries in 2011 and while the value of goods exported by the EU-28 also continued to grow, it did so at a considerably slower pace. As a result, the EU-28 recorded a trade deficit of EUR 1.2 billion with the six ENP-East countries in 2011. This was short-lived, as in 2012 the EU-28 once again recorded a surplus, followed by a much larger surplus in 2013, reaching EUR 7.7 billion. In 2014, the trade surplus for goods narrowed greatly and in 2015 the EU-28 again recorded a trade deficit with the ENP-East countries, this time valued at EUR 1.8 billion. Once more this was short lived, with the EU-28 returning to relatively small trade surpluses in 2016 (EUR 2.1 billion) and 2017 (EUR 0.9 billion).

Figure 4: Trade balance for goods with ENP-East countries, EU-28, 2007-2017
(million EUR)
Source: Eurostat (DS-018995)

Ukraine accounted for three fifths of the EU-28’s goods exported to ENP-East countries in 2017

Figures 5 and 6 provide more detailed information as to the destination and origin of trade in goods between the six ENP-East countries and the EU-28. Based on data provided by the EU Member States, Ukraine accounted for the largest share of goods exported from the EU-28 in 2017 to the six ENP-East countries (see Figure 5) — three fifths (61 %) of the total value. Just under one fifth (18 %) of the goods exported to the ENP-East countries from the EU-28 in 2017 were destined for Belarus, while the next highest shares were recorded for Moldova, Georgia and Azerbaijan (all in the range of 5 % to 7 %). The geographical distribution of goods exported to the six ENP-East countries from the EU-28 changed substantially when comparing 2007 with 2017, mainly due to a 9 percentage point reduction for Ukraine, whose share of goods exported to the ENP-East countries fell from 70 % to 61 %. Consequently, the shares of several other countries increased.

Figure 5: Destination for goods exported to the ENP-East countries, EU-28, 2007 and 2017
(% of total EU-28 exports to ENP-East countries)
Source: Eurostat (DS-018995)

Azerbaijan and Ukraine together provided four fifths of all goods imported into the EU-28 from the six ENP-East countries in 2017

Azerbaijan and Ukraine were the main origins of EU-28 imports of goods from the ENP-East countries in 2017; imports from Ukraine accounted for 52 % of the total value of goods imported by the EU-28 from the six ENP-East countries, while Azerbaijan’s share was 29 %. Belarus (11 %) was the third largest origin of imports in 2017. By contrast, 8 % of the goods imported by the EU-28 from ENP-East countries originated from the three remaining countries of Moldova, Georgia and Armenia. As with the developments observed for exports, there was a shift in the geographical distribution of the value of goods imported to the EU-28 from ENP-East countries between 2007 and 2017. There was a marked decrease in the share of imports originating from Belarus (down 6 percentage points), which was balanced by increases for Ukraine and Moldova.

Figure 6: Origin of goods imported from the ENP-East countries, EU-28, 2007 and 2017
(% of total EU-28 imports from ENP-East countries)
Source: Eurostat (DS-018995)

Main products traded between the ENP-East countries and the EU

Tables 2-7 provide, for each of the individual ENP-East countries, a summary for their trade in goods with the EU-28 (as reported by the EU Member States), analysed for 10 main product groupings according to the standard international trade classification (SITC Rev.3).

Nearly all of the goods imported into the EU-28 from Azerbaijan were mineral fuels, lubricants and related materials

A country’s endowment with natural resources often impacts on trade (and production) specialisations within certain industrial products. By contrast, countries may lack specific resources and as a result they seek to import these goods in a raw or processed form. As a result, there are considerable differences in the types of goods that individual countries export and import. Mineral fuels, lubricants and related materials accounted for almost all (98.1 %) of the EU-28’s imports originating from Azerbaijan (see Table 3) in 2017. By contrast, manufactured goods accounted for the highest share of the EU-28’s imports from Armenia (49.8 %), Belarus (34.8 %) and Ukraine (26.2 %) — see Tables 2, 4 and 7 — while more than one quarter (25.8 %) of the EU-28’s imports originating from Moldova (see Table 6) were miscellaneous manufactured articles. Crude materials account for more than two fifths (43.0 %) of imports from Georgia (see Table 5)

Table 2: Trade between the EU-28 and Armenia by product group, 2017
Source: Eurostat (DS-018995)
Table 3: Trade between the EU-28 and Azerbaijan by product group, 2017
Source: Eurostat (DS-018995)
Table 4: Trade between the EU-28 and Belarus by product group, 2017
Source: Eurostat (DS-018995)
Table 5: Trade between the EU-28 and Georgia by product group, 2017
Source: Eurostat (DS-018995)
Table 6: Trade between the EU-28 and Moldova by product group, 2017
Source: Eurostat (DS-018995)
Table 7: Trade between the EU-28 and Ukraine by product group, 2017
Source: Eurostat (DS-018995)

There was a clearer pattern in relation to the main products that were exported from the EU-28 to the six ENP-East countries in 2017. The highest share of EU-28 exports destined for the ENP-East countries was consistently recorded for machinery and transport equipment. This pattern was observed for all six ENP-East countries, as machinery and transport equipment products accounted for more than two fifths (41.7 %) of all goods exported to Azerbaijan from the EU-28 in 2017, while their lowest shares were recorded in Georgia (27.9 %) and Moldova (27.2 %).

Relative importance of trade flows with the ENP-East countries for individual EU Member States

Germany accounted for just over one fifth of all goods exported from the EU-28 to the six ENP-East countries …

In 2017, Germany had the highest exports of goods to the six ENP-East countries from among the EU Member States, with a 21 % share; this relatively high share may, at least in part, be linked to Germany’s size and its specialisation in the manufacture of machinery and equipment. Poland had the second highest share (18 %) of the EU-28’s goods exported to the ENP-East countries, followed by Italy (8 %) and Hungary (7 %) — see Figure 7.

Figure 7: Share of goods exported by the EU-28 to the ENP-East countries, 2007 and 2017
(% of EU-28 exports to ENP-East countries)
Source: Eurostat (DS-018995)

… while close to one quarter of all goods imported into the EU-28 from the six ENP-East countries were destined for Italy

By contrast, Italy was the most important market among the EU Member States for goods imported from the ENP-East countries in 2017; this may, at least in part, be explained by limited indigenous energy supplies and a relatively high level of oil imports from Azerbaijan. Italy accounted for close to one quarter (23 %) of all imports made by EU Member States from the six ENP-East countries in 2017, while Germany and Poland were the second and third largest markets, with 11 % and 10 % share of the EU-28 total — see Figure 8.

Figure 8: Share of goods imported into the EU-28 from ENP-East countries, 2007 and 2017
(% of EU-28 imports from ENP-East countries)
Source: Eurostat (DS-018995)

Geographical proximity appeared to play an important role in determining which EU Member States had relatively high trade flows with the six ENP-East countries

A more complete analysis of trade flows between the individual EU Member States and the six ENP-East countries is provided in Figure 9. Perhaps unsurprisingly, given their geographical location, the EU Member States which had a relatively high share of their total trade with ENP-East countries included Lithuania, Latvia, Romania, Poland, Bulgaria and Hungary. Some 7.1 % of all goods exported by Lithuania in 2017 were destined for ENP-East markets. By contrast, there were 20 EU Member States where exports of goods to the six ENP-East countries accounted for less than 1.0 % of total goods exported. Among the EU Member States, Lithuania also recorded the highest share of its imports of goods originating from the ENP-East countries, at 3.3 % in 2017. There were 16 EU Member States which reported less than 1.0 % of their imported goods originating from the ENP-East countries.

Figure 9: Trade in goods with the ENP-East countries as a share of all trade in goods, 2017
(% share of total exports and imports)
Source: Eurostat (DS-018995) and (ext_lt_intratrd)

Overall, the relative share of goods exported from the EU-28 to the six ENP-East countries fell from 2.6 % of the total in 2007 to 1.8 % by 2017 (see Figure 10). However, the relative importance of ENP-East export markets declined at a relatively fast pace in Poland, falling by 2.1 percentage points during the period 2007-2017, while falls between 1.5 and 1.0 percentage points were recorded for Bulgaria, Romania, Latvia and Estonia; note this does not necessarily mean that the absolute value of exports fell. Among nearly all of the other EU Member States, the relative importance of the ENP-East countries as an export market fell by less than 1.0 percentage points or was stable, with only Lithuania showing an increase in the share of its exports destined for the ENP-East countries, albeit marginal, from 7.0 % to 7.1 %.

Figure 10: Exports of goods to the ENP-East countries as a share of all exports of goods, 2007 and 2017
(% share of total exports)
Source: Eurostat (DS-018995) and (ext_lt_intratrd)

The relative importance of EU-28 imports originating from the six ENP-East countries fell by 0.1 percentage points between 2007 and 2017 to reach 1.7 % of all imported goods (see Figure 11). The share of goods imported from ENP-East countries rose by 1.1 percentage points in Portugal over the same period and by 0.7 points in Romania and 0.6 points in Croatia. By contrast, the share of goods imported from the ENP-East countries fell by 4.9 percentage points in Bulgaria, 1.8 points in Latvia and 1.2 points in Estonia.

Figure 11: Imports of goods from the ENP-East countries as a share of all imports of goods, 2007 and 2017
(% share of total imports)
Source: Eurostat (DS-018995) and (ext_lt_intratrd)

Data sources

International trade statistics track the value (and quantity) of goods traded between countries. They are the official source of information on imports, exports and the trade balance. Traditionally, customs records are the main source of statistical data on international trade. Following the adoption of the Single Market on 1 January 1993, customs formalities between EU Member States were removed, and so a new data collection system, intrastat, was set up for intra-EU trade. In the intrastat system, intra-EU trade data are collected directly from trade operators, which send a monthly declaration to the relevant national statistical administration.

The data reported by the EU Member States presented in this article come from Eurostat‘s Comext database.

The data for ENP-East countries are supplied by and under the responsibility of the national statistical authorities of each country on a voluntary basis. The data result from an annual data collection cycle that has been established by Eurostat. These statistics are available free-of-charge on Eurostat’s website, together with a range of additional indicators for ENP-East countries covering most socio-economic topics. For some ENP-East countries, these data have been supplemented by data compiled from the Comtrade database of the United Nations.

Note that although trade flows should ideally mirror each other (in other words be the same from the perspective of the exporter and the importer), there may be considerable differences in the values presented depending upon which party (exporter or importer) is used as the reporting entity. These discrepancies are often referred to as asymmetries and can be seen when bilateral data for two reporting parties are compared. Generally, while international recommendations for reporting trade statistics exist, countries may adopt methodologies that deviate from the recommendations for practical reasons. Consequently, when exports from country A to country B are compared with imports into country B from country A, the figures rarely (if ever) match. More information concerning the causes of asymmetries can be found in the user guide for statistics on the trading of goods.

Tables in this article use the following notation:

: not available, confidential or unreliable value;
not applicable.

Context

The EU has a common international trade policy, often referred to as the common commercial policy. In other words, the EU acts as a single entity on trade issues, including issues related to the World Trade Organisation (WTO). In these cases, the European Commission negotiates trade agreements and represents the interests of the EU Member States.

The EU seeks to promote the development of free trade as an instrument for stimulating economic growth and enhancing competitiveness. International trade statistics are of prime importance for both public sector (decision makers at international, EU and national levels) and private users (in particular, businesses who wish to analyse export market opportunities) as they provide valuable information on developments regarding the exchange of goods between specific geographical areas. These statistics enable the EU to monitor the development of trade ties with its ENP partners, while they are also used by the European Commission to prepare multilateral and bilateral negotiations for common trade policies.

The EU completed trade negotiations with three ENP-East countries in 2014 as part of a process to establish Association Agreements. Bilateral trade relations are covered by a Deep and Comprehensive Free Trade Area (DCFTA), as signed with Georgia, Moldova and Ukraine in June 2014. These changes are designed to boost bilateral trade in goods and services between the ENP-East countries and the EU and to bring trade-related rules and standards in the ENP-East countries into line with EU regulations in this domain. In November 2017, the EU and Armenia signed a Comprehensive and Enhanced Partnership Agreement which entered into provisional application in June 2018.

EU-Azerbaijan bilateral trade relations are currently regulated by a Partnership and Cooperation Agreement. However, in December 2017 there was an agreement between the EU and Azerbaijan to renew their engagement and dialogue, launching negotiations for a comprehensive new partnership. By contrast, bilateral trade and economic relations with Belarus remain covered by a Trade and Cooperation Agreement that was concluded by the European Community with the Soviet Union in 1989 (subsequently endorsed by Belarus).

On 18 November 2015, the High Representative for Foreign Affairs and Security Policy and the European Commission jointly presented a review of the European Neighbourhood Policy (SWD(2015) 500 final) which underlined a new approach for the EU in relation to its eastern and southern neighbours, based on stabilising the region in political, economic, and security-related terms.

In cooperation with its ENP partners, Eurostat has the responsibility ‘to promote and implement the use of European and internationally recognised standards and methodology for the production of statistics necessary for developing and monitoring policy achievements in all policy areas’. Eurostat undertakes the task of coordinating EU efforts to increase the statistical capacity of the ENP countries. Additional information on the policy context of the ENP is provided here.

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International Trade (enpr_et)
ENP countries: international trade - main indicators (enpr_etmain) 
ENP countries: Trading partners - flows (enpr_etflow)
ENP countries: Trade by commodity (SITC) (enpr_etsitc)
International trade in goods - aggregated data (ext_go_agg)
International trade in goods - long-term indicators (ext_go_lti)
International trade (ext_go_lti_int)
International trade of EU, the euro area and the Member States by SITC product group (ext_lt_intertrd)
EU trade by Member State, by partner and by product group (ext_go_lti_ext)
Intra and Extra-EU trade by Member State and by product group (ext_lt_intratrd)