Impact of Russian Embargo on Trade Flows Structure from European Union to Asian Countries
07.31.2019
Analysis of international trade statistics shows that different groups of the European Union (EU) member countries reacted differently to a ban on imports of certain types of food products (hereinafter referred to as «sanctioned goods») by Russia in August 2014, which also implies a ban on transit traffic.

An analytical study includes the analysis of the European Union export to China (and other Asian countries) in order to identify changes in the volume and structure of EU freight traffic. During the study, EU countries were grouped according to the principle of the export change and their transport and logistics capabilities. After the embargo had been imposed, the export of the EU countries with access to the sea (Germany, the Netherlands, Denmark, Spain, Italy, Portugal, Romania, Croatia, Bulgaria, Slovenia) increased, due to the reorientation of goods flows from land transport to sea and the reorientation of trade flows from the EU to China.

Among the coastal countries, there is also a group of countries which export of sanctioned goods to China decreased immediately after Russian ban on imports of such goods (in 2015–2016) and in subsequent periods it increased significantly, strengthening overall growth trend for the majority of the countries. Among such countries are Finland, Sweden, Belgium, Estonia, Latvia, Lithuania, France. Such export performance of sanctioned goods to China by the countries listed above is explained by the fact that the ports on the territory of these countries are poorer than the Netherlands and Germany ports in terms of cargo turnover, and a quick reorientation of land trade flows for export through these ports is hardly possible.

Ban on imports of sanctioned goods by Russia entailed a reduction in the subsequent period (2014–2016) of exports to China from a number of landlocked countries that have land transport links with China. Among such countries are Poland, Austria, Czech Republic, Slovakia. Ban on imports of sanctioned goods by Russia did not affect the export of these goods to China from the EU member island countries, since, due to their geographical location, these countries do not send goods to China through Russia. Among such countries are Great Britain, Ireland, Cyprus, Malta, Greece.

The volume of imports of sanctioned goods from the EU to China grew by 2.2 times in 2018 compared with 2013; this growth was mainly provided by increasing supplies from coastal countries (the Netherlands, Germany, France). At the same time, there has been a decrease in the volume of deliveries from countries whose export to China can be carried out by rail transportation (for example, Poland).

Change in volumes of imports of sanctioned goods to China from EU member countries

Name of exporter

Volume of imports to China, USD million

Dynamics

2013 year

2018 year

the Netherlands

736

2 300

Increased by 3.1 times

Germany

711

1 619

Increased by 2.3 times

France

724

1 167

+61%

Ireland

268

1 015

Increased by 3.8 times

Spain

268

776

Increased by 2.9 times

Denmark

576

684

+19%

Great Britain

156

375

Increased by 2.4 times

Poland

179

136

-24%

Italy

36

118

Increased by 3.3 times

Belgium

49

80

+62%

Finland

67

51

-23%

Sweden

57

51

-10%

Austria

31

48

+54%

Portugal

12

26

Increased by 2.1 times

Estonia

8

25

Increased by 3.2 times

Hungary

0

21

Increased by 183.3 times

Czech Republic

7

13

+83%

Latvia

12

9

-26%

Greece

3

5

+84%

Lithuania

7

4

-47%

Romania

0

2

Increased by 19.6 times

Croatia

0

2

Increased by 49.5 times

Bulgaria

0

2

Increased by 4.8 times

Slovenia

0

1

Increased by 8.7 times

Other

3

1

-71%

Total EU

3 910

8 530

Increased by 2.2 times

Thus, the structure of imports of sanctioned goods from the EU to China is favorable for reorienting some of the supplies from sea to rail transport, as China remains interested in such goods produced in the EU.


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