Reorientation of trade between the European Union and the Russian Federation under sanctions

Abstract

The issue of the sustainability of the Russian economy, which is under unprecedential geopolitical pressure, is one of the main and most sensitive in the modern agenda of both Russian and foreign scientific research. The task of identifying the effects and effectiveness of trade restrictive measures faces scientists on both sides of the confrontation. Some need to demonstrate the achieved effect, others need to be convinced of adequate containment and overcoming. Solving this problem is accompanied by a search for new channels of foreign economic relations, both in trade and in the investment, which inevitably raises questions about the possibilities of reorienting Russian foreign trade, which for many years was focused on the EU as the main supplier of material and intangible resources. Since February 2022, the European Union has developed and introduced a significant number of large-scale trade restrictive measures. The purpose of this article is to analyze the impact of trade restrictions of EU member states on trade with Russia from the point of view of reorienting European trade flows to other countries in the context of circumventing sanctions and identifying product items for which trade substitution and reorientation to other markets is possible. To achieve this goal, a methodology has been developed and proposed for identifying those product items for which such substitution has not occurred and a certain dependence of European countries on Russian supplies still remains, which means that retaliatory restrictive measures can be applied to these items. The analysis made it possible to identify a significant change in trade flows from EU member countries, replacement of trade due to reorientation to other neutral countries, as well as groups of goods that currently could not be replaced.