Keywords

1 Introduction

In August 2014 Russia restricted products import from the EU, Norway, the US, Canada and Australia. Then sanctions were imposed against Ukraine. It was assumed that the restriction would be short-lived and, causing instantly great damage to developed countries, would be abolished due to the lift of political and economic sanctions by these countries.

The hope for an early lift of the embargo was not justified, and for more than seven years the economy of the Russian Federation has been developing under the embargo. How did this non-tariff restriction affect the commodity and geographical structure of Russia’s foreign trade, whether this measure led to qualitative shifts in foreign trade and what new trends in the foreign trade sphere emerged in recent years? The answers to these questions are expected to be obtained in this study.

Over the past years, many articles have appeared that examine and assess the losses that both developed countries and the Russian Federation suffered from mutual sanctions pressure, but there are practically no studies examining in detail the change in the geographical structure of foreign trade operations of the Russian Federation, investigating the reasons for the decrease or increase in the share of individual countries in foreign trade turnover.

2 Materials and Methods

In recent years, the study of the embargo impact and, in general, economic sanctions on the Russia’s economy has aroused great interest in the scientific community. The opinions of scientists on the assessment of the impact of sanctions pressure were divided. On the one hand, it is proved that the sanctions have led to the growth of the agro-industrial sector of the Russian Federation, an increase in agricultural exports and a decrease in imports.

On the other hand, the studies give a rather negative assessment of the state of the agro-industrial complex of the Russian Federation due to the embargo. Many researchers consider the negative effect of the embargo on the economies of the countries against which the embargo is directed [1,2,3]. It is noted that the introduction of the embargo by Russia had both positive and negative influence on the economy of European countries. In particular, negative factors include [1]:

  • decrease in volumes of foodstuffs export;

  • increase in food supply in domestic markets;

  • price reduction;

  • loss of jobs;

  • decline in GDP;

  • logistics

The researchers consider the following factors to be positive aspects for the EU:

  • opening up new possibilities due to the reorientation of export markets;

  • cooperation with more reliable partners, such as Japan and the USA;

  • improving the economic efficiency of foreign trade transactions.

Considering the positive and negative effects of the embargo on Russia, the following negative prospects are noted:

  • reduction of food supply and its quality;

  • an increase in the cost of food, a decrease in its aggregate supply and, as a result, a surge of food inflation;

  • negative attitude of foreign trade partners

The researchers underline the following positive factors:

  • an increase in the consumption of domestic products;

  • low price of domestic food;

  • the growth of domestic products exports.

Economic sanctions against the Russian Federation and counter-sanctions by the Russian Federation lead to a decrease in both the total value of exports and imports of the Russian Federation [2,3,4,5,6]. Counter-sanctions are expected to reduce the value of agricultural imports, while the impact of sanctions and counter-sanctions on agricultural exports is insignificant [2].

Moreover, if the imposed sanctions lead to a decrease in trade turnover between the sender and the sanctioned country, then the threat of sanctions leads to an increase in foreign trade between these countries. Foreign trade partners seek to accumulate reserves and minimize the adverse effects of sanctions. This is especially characteristic in agricultural products and medicines trade [4].

On the other hand, the results of studies [3, 7] show the heterogeneity of the effect of the imposition of sanctions. The country's foreign economic profile, its participation in integration groupings, historically established foreign trade flows and other factors have a great influence on the result of the sanctions impact. The assessment of the consequences of the sanctions war against Russia shows a significant reduction in agricultural trade, especially trade between the EU and Russia, which is reduced by about 51%. An additional negative effect is a decrease in foreign trade exchange not only for sanctioned commodity items, but also for all groups of goods that were exchanged before the sanctions were imposed [3].

The decline in foreign trade cooperation with the EU will probably be long-term, as there has been a reorientation of foreign trade flows from both the EU and the Russian Federation [7].

The purpose of the study is to assess the change in the geographical structure of foreign trade of the Russian Federation under the influence of the embargo. Research hypothesis: the sanctions imposed on certain types of goods ultimately lead to a reduction in mutual exchange not only for sanctioned groups of goods, but also in the total volume of foreign trade transactions with these countries.

Methods: While assessing the change in the geographic and commodity structure of foreign trade in agricultural products of the Russian Federation, the methods of comparative analysis, analysis of statistical data and systematization of scientific literature were used. The International Trade Center (ITC) data were used as a statistical base.

The assessment of the geographic and commodity structure of foreign trade operations, as a rule, is considered by coefficient analysis including the calculation of such indicators as: coefficients of intra- and inter-industry specialization, intensity of trade flows, evaluation of comparative advantages [8, 9]. Another, equally common means of assessment is the use of economic and mathematical methods, for example, a gravity model or multiple regression.

Obviously, all these calculations make it possible to determine the quality of foreign economic relations, top-priority foreign trade partners and optimize the commodity structure of exports and imports. But often the change in the geographical structure and the share of individual foreign trade partners in the total volume of export-import operations is due to reasons that cannot be explained with the coefficient analysis or the construction of a forecast model. We are of the opinion that in addition to complex calculations the importance of which is not disputed it is necessary to try to explain some changes in the geographical structure of foreign trade using simpler methods. Let us consider the dynamics of the geographical structure of foreign trade of the Russian Federation using the coefficient of territorial specialization of exports or imports, which is calculated for both exports and imports and is represented by the formula (1).

$$ {\mathcal{K}}exp = \frac{EXPi}{{EXP}} $$
(1)

The coefficient is calculated in dynamics and allows you to evaluate the decrease or increase in the share of the foreign trade partner in the country’s foreign trade balance, and then, based on the information received, to try to determine the reasons why these changes occurred.

Considering the changes in the geographical structure of exports under the influence of prohibitions and restrictions, it is worth noting the possibility of reducing exports of those groups of goods for which the distance to final consumers has increased [10].

An analysis of the behavior of individual firms after the introduction of sanctions shows that their foreign trade interaction with the country is developing in three directions: firstly, they reduce trade with this country, secondly, they try to carry out foreign trade through third countries (shadow exports or imports), and thirdly, some firms that consciously have chosen trade with countries against which economic sanctions are often applied are generally immune to the effect of sanctions [11].

An important addition to the analysis is the study of the sustainability of world trade in agricultural products to COVID-19, which found that, in general, there is a decline in world trade in this group of goods, especially in such commodity items as meat products, including seafood, and more expensive agri-food products [12].

3 Results

Tables 1, 2 and 3 provide information on the main foreign trade partners of the Russian Federation by regions. The analysis showed that the Russian Federation’s significant foreign trade partners are concentrated in Europe, the USA and Asia. Foreign trade cooperation with Latin American and African countries, despite the increased attention to it from government authorities, is not significant, even though the trade volumes with these groups of countries has increased slightly. The calculation shows that despite the imposition of the embargo and the deterioration of the political situation, the developed countries of Europe and the United States remain the main trading partners of the Russian Federation. During the period from 2013 to 2020, the territorial specialization of exports and imports of Russia has changed. A decrease in the volume of foreign trade operations is observed in trade with such countries as Hungary, Germany, Greece, Spain, Latvia, Lithuania, the Netherlands, Poland, Slovakia, Finland, France, and the Czech Republic.

Table 1. Indicator of territorial specialization of exports and imports in foreign trade with European countries.
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A decrease in the volume of export operations is observed in trade with Italy and Switzerland. A decrease in imports, with an increase in export operations, is observed in Belgium, Norway, and the United Kingdom. At the same time, some countries have managed, despite the difficult political situation, not only do not reduce, but even to increase the volume of foreign trade cooperation with Russia. In particular, an increase in the volume of export-import operations is observed in trade with Serbia and Romania. The Republic of Belarus is undoubtedly the beneficiary of the imposition of sanctions, and the greatest decrease in foreign trade cooperation is observed with Ukraine.

Table 2. Indicator of territorial specialization of exports and imports in foreign trade with Asian countries.
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The main foreign trade partners of the Russian Federation in Asia are China, Turkey, South Korea, Kazakhstan and India (Table 2). These countries can also be considered beneficiaries of the current sanctions, since during the analyzed period they were able to increase their foreign trade turnover with the Russian Federation. The reduction in the share of imports in foreign trade with the Russian Federation in this group of countries is observed only in Israel, Japan and Cyprus. Export operations decreased with trade between Russia and Indonesia, Cyprus, Turkmenistan and Japan.

Table 3. Indicator of territorial specialization of exports and imports in foreign trade with the countries of America.
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The assessment of the share of the American continents countries in the foreign trade of the Russian Federation shows that in the period 2013–2020, such countries as Mexico, the USA, Chile, Ecuador increased their share. An increase in Russian exports is observed in Brazil, and imports in Peru.

Let us consider how the geographical structure of imports has changed by major groups of CN FEA, with details of the first two signs covering goods included in the embargo. As one can see, by major group of CN FEA - meat and meat by-products, the number of exporters of this type of product to the Russian Federation decreased by 2020. New counterparties did not appear, and the remaining ones did not increase export volumes either.

The geographical structure of exports by the Russian Federation of products by CN FEA code-02 – meat and meat by-products has changed significantly. The most important importers of this group of agricultural products are China, Vietnam, Ukraine, Hong Kong, and the volume of exports to these countries tends to increase (Fig. 1).

Fig. 1.
figure 1

Import to the Russian Federation and Export from the Russian Federation of commodity group 02 (meat and meat by-products).

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Let us consider the counterparties by export-import operations in the following commodity group subjected to embargo by the Russian Federation: 03 (fish and shellfish, mollusks and other aquatic invertebrates) (Fig. 2).

Fig. 2.
figure 2

Import to the Russian Federation and Export from the Russian Federation of commodity group 03 (fish and shellfish, mollusks and other aquatic invertebrates).

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It is obvious that there have been no significant changes in the geographical structure of imports to the Russian Federation of this group of goods, and the same countries remain as the importers as before the embargo was imposed, with the exception of those under sanctions. Imports from Turkey, Vietnam, Ecuador and “gray” imports from Belarus have increased.

More significant changes have occurred in the geographical structure of foreign trade export partners (Fig. 2). During the embargo, Russia was able to increase the export of fish products to the DPRK, China, the Netherlands, and Japan.

Changes in the geographical structure of imports to the Russian Federation of goods of the commodity group by CN FEA-04 code - dairy products; poultry eggs; natural honey; food products of animal origin (Fig. 3) are connected with a decrease in imports in general, with an increase in imports from Belarus, and partly from New Zealand and Argentina. But these deliveries should not be considered significant.

Fig. 3.
figure 3

Import to the Russian Federation and Export from the Russian Federation of commodity group 04 (Dairy products; poultry eggs; natural honey; food products of animal origin).

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The geographical structure of exports from the Russian Federation of this group of goods (Fig. 3) practically did not change during the period under review.

The geographical structure of foreign trade by commodity item by CN FEA code 07 (vegetables and some edible root and tuber crops) (Fig. 4) shows some changes. In the period from 2013–2020, there was a decrease in imports to the Russian Federation from countries such as Chile, Turkey, Iceland, Morocco and Belarus.

Fig. 4.
figure 4

Import to the Russian Federation of commodity group 07 (vegetables and some edible root and tuber crops).

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An increase in imports is observed in trade with countries such as Azerbaijan, Egypt, Uzbekistan. There was a significant reduction in imports from the Netherlands, which excluded the country from the main exporters of these products to the Russian Federation.

The geographical structure of exports from the Russian Federation of this group of goods has also undergone some changes. The main foreign trade partners were such countries as Pakistan, Turkey, Italy, India, Lithuania, Belarus, Spain.

Moreover, Pakistan, Ukraine, Belarus, and Spain were not major partners of Russia in export operations in 2013. There were practically no exports to Bangladesh and the UAE.

4 Conclusions

One of the newest trends in world trade is the study of the possibilities of regulating the global market in order to prevent the influence of negative factors related to economic and environmental problems. Full integration and management of global flows in world trade in agricultural products is the prospect of the near future [13,14,15,16].

The identification of counterparties in the implementation of foreign trade operations is an increasingly relevant area of research. In the works of some researchers [14], it is noted that it is necessary, as proposed at the international economic forum, to develop a new index-indicator of the prospects for foreign trade, which will contribute to the correct vision of the prospects for foreign trade connected with a reduction or, conversely, an increase in the volume of trade in certain types of goods that will minimize the risks in export-import operations. For example, if a country starts exporting more grain, then it is likely that if it imports fertilizer, then an increase in exports will lead to an increase in fertilizer imports in the long term. The indicator of the prospects for world trade can also help countries that are involved in sanctions wars, as it will help them correctly identify new potential partners in the export and import of sanctioned goods.

Studies show that the lifting of sanctions does not lead to an increase in foreign trade operations with the country against which sanctions have been lifted [11, 17], therefore, the reorientation of foreign trade flows is carried out on an inertial basis and the change of foreign trade partners is rather slow. Globalization of governance and integration are likely to accelerate these processes and allow giving a mobile response to the introduction and lifting of sanctions to restore foreign trade that will indirectly affect the strengthening of the damage caused by the introduction of economic sanctions and increasing the positive effects of their lifting.

Thus, in the future, countries that fail to integrate into the global governance of world agricultural trade risk losing existing, and often historically established markets for their products. The system tends to circularity and control.