Commentary
Thomas de Waal
{
"authors": [
"Thomas de Waal"
],
"type": "commentary",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace",
"Carnegie Europe",
"Carnegie Russia Eurasia Center"
],
"collections": [],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Europe",
"programAffiliation": "",
"programs": [],
"projects": [],
"regions": [
"Middle East",
"Israel",
"Caucasus",
"Russia",
"Azerbaijan",
"Armenia",
"Georgia"
],
"topics": [
"Economy",
"Trade",
"Foreign Policy"
]
}
Source: Getty
Commentary
Queuing for Russia’s Food Market
The list of countries wanting to take advantage of Western sanctions to boost their food exports to Russia has nothing in common but the desire to gain a new market.
Published on Oct 1, 2014
International sanctions on Russia are having multiple but mysterious effects.
Russia’s currency has slid, with a dollar now worth almost 40 rubles. The unexpected criminal charges against billionaire Vladimir Yevtushenkov may be the result of a new round of economic and political austerity. As one analyst told the Financial Times, “Now they’re going after people who are not part of the inner circle. In these times neutrality is no longer enough.”
Every day, reports come in of countries keen to cash in on the rupture of trade between Russia on the one hand and the United States, Japan, and most of Europe on the other.
These new trading partners have nothing in common except willingness to gain a new market.
In the case of Israel and Russia, it is a matter of making up for a double trade ban. On September 1, the European Union announced new restrictions on Israeli imports following the summer offensive against Gaza. Israel and Russia evidently hope they can exchange products with each other that are not going to or from Europe.
Meanwhile, Egypt and Russia are discussing a new free trade agreement. Argentinian and Brazilian ministers are talking about how they can take the opportunity to export more agricultural products to the Russian market.
Closer to home, Armenia sees an opportunity to boost its faltering economy. President Serzh Sargsyan has talked of “great opportunities for our agricultural producers” and the agriculture minister says he wants to see exports double.
Azerbaijan, which has assured the West of its support for Ukraine in the current crisis, recently hosted a senior Russian delegation led by Moscow’s main troubleshooter for its neighborhood, Dmitry Rogozin. Azerbaijan’s Deputy Prime Minister Yagub Eyyubov told his visitors, “The European Union is putting pressure on Russia but no one will break the Russian Federation, it will never bend.”
For Russia, this is a matter of “food security,” for Azerbaijan it is a new market opportunity.
For Russia’s neighbors in the Caucasus this is also an instance where, in a relationship where Russia is generally perceived to hold all the cards, they gain some leverage of their own. Even Georgia is expanding its trade relationship with Russia, despite the recent suspension of their 1994 free trade agreement. Exports of Georgian wine to Russia surged by 65 percent in the first seven months of this year.
For all the big declarations, it looks highly unlikely that Azerbaijan tomatoes, Armenian apples, and Argentinian beef can smoothly and silently take up the empty place in the Russian market left by France, Greece, or Poland. The last time Russia underwent such a massive market disruption, in the late 1980s and early 1990s, it took years to rectify.
The politics of it may be more important for Moscow—a demonstration that there is a multi-polar world out there, in trade at least.
About the Author
Thomas de Waal
Senior Fellow, Carnegie Europe
Thomas de Waal is a senior fellow at Carnegie Europe, specializing in Eastern Europe and the Caucasus.
- There Is No Shortcut for Europe in Armenia
- Rewiring the South Caucasus: TRIPP and the New Geopolitics of ConnectivityArticle
Thomas de Waal, Areg Kochinyan, Zaur Shiriyev
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Europe
- Europe Should Not Let Nuclear Nonproliferation DieCommentary
Amid uncertainty caused by the Iran war, the global drive for nonproliferation has stalled. With Europe diplomatically marginalized and countries reassessing their nuclear options, efforts to curb the spread of nuclear weapons risk becoming irrelevant.
Jane Darby Menton
- Can Europe Compete with the United States and China?Commentary
Between the United States’ market-driven approach and China's state-led industrial strategy, Europe is reckoning with how it can remain competitive in the global economy. But is Europe in danger of becoming a U.S. or China colony?
Noah Barkin, Anu Bradford
- Taking the Pulse: Was it Right to Boycott Eurovision?Commentary
Five countries staged the biggest political boycott in Eurovision history over Israel’s participation. With the FIFA World Cup and other sporting or cultural touchstones on the horizon, are boycotts effective?
Rym Momtaz, ed.
- Trump Turns NATO into a Tool of CoercionCommentary
The full list of humiliations Europe has endured since Donald Trump returned to the White House makes for grim reading. But Washington’s adversarial approach to its allies undermines its own power base.
Rym Momtaz
- How the EU Can Become Energy IndependentCommentary
The closure of the Strait of Hormuz has triggered a global energy crisis, but Europe is stuck in reaction mode. Without more strategic foresight, the EU will remain dependent on fossil fuels and will never be truly secure.
Milo McBride, Pauline Gerard
