Foreign economic cooperation between St. Petersburg and Denmark in the 21st century: Main trends, problems, prospects

Abstract

Russian-Danish economic cooperation has a long and rich history, in which St. Petersburg, due to its geographical location, has always played an important role. The study of the role of large megacities in national foreign economic policy is now of great scientific and practical importance. The authors of this article attempt to examine the economic sphere of paradiplomacy based on the example of St. Petersburg. The article analyzes the legal framework for economic cooperation between St. Petersburg and Denmark, trade and investment cooperation, determines the place of St. Petersburg in the total trade turnover of Russia with Denmark, and the importance of Danish exports and imports for St. Petersburg’s economy. Special attention is paid to the period 2014–2020, namely, the impact of the sanctions regime on Danish and St. Petersburg economic cooperation, as well as the new role of the Danish autonomous regions — the Faroe Islands and Greenland. The authors determine that there were no drastic changes in the economic interaction between St. Petersburg and Denmark after the introduction of sanctions. Although the counter-sanctions reduced the supply of Danish food products, the export of St. Petersburg goods to Denmark increased. The vacuum created by the reduction in the supply of Danish products was filled by enterprising residents of the Faroe Islands, who are not members of the European Union (EU). St. Petersburg has become one of the key centers of consumption of Faroese fish and seafood. The main obstacles to the development of economic cooperation between St. Petersburg and Denmark remain: value differences between the Russian Federation and the EU, the sanctions regime, an outdated regulatory framework, and a high degree of distrust between partners, which is beginning to affect the pragmatic sphere of the economy. The global economic crisis caused by the coronavirus pandemic also has a negative impact on economic cooperation between St. Petersburg and Denmark. However, the epidemic opens up new opportunities for cooperation in areas that were on the periphery of Danish-Russian economic relations: digitalization of the economy and education, urbanism and the implementation of the ideas of a “smart city”, cooperation in the field of pharmaceuticals and medical technologies, and cybersecurity.