EU Foreign Trade

Main article: Economy of the European Union

Import of gas, coal, oil and petroleum products

Main article: Import of gas, coal, oil and petroleum products in Europe

2023

Grain imports from Russia exceeded the level before the conflict in Ukraine

EU ports help resell more than 20% of LNG imported by EU from Russia

EU ports help resell more than 20% of LNG imported by the EU from Russia, the FT wrote in November 2023.

Although contracts for the so-called Russian LNG transshipment were banned Britain in and, data obtained in Netherlands 2023 suggests that authorized consignments of Russian gas are regularly reloaded from one tanker to another in, and Belgium France Spain before heading to customers on other continents.

The eurozone is the leader of the global trade downturn

As of October 2023, the Eurozone is the leader of the global trade downturn.

According to Tradeshift, a cloud-based supply chain management platform, "global trade, once referred to as the eurozone's bargaining chip, is now its Achilles heel as a worsening macroeconomic situation leaves order portfolios across the bloc extremely empty."

Trade slump with China

Losses of the largest European companies in Russia exceeded $100 billion after the outbreak of the conflict in Ukraine

By August 2023, the largest European companies suffered direct losses of at least 100 billion euros from their activities in Russia since the outbreak of the conflict in Ukraine in February 2022 , the Financial Times wrote.

Record trade surplus with Russia - 271 million euros in April

By April 2023, foreign trade between Russia and the EU was virtually destroyed. Over the year, the supply of Russian goods to YeS-27 collapsed 5.8 times (from 23.5 to 4 billion euros). March deliveries were the lowest for the entire period of statistics since 2002 and half as low as in the worst period of the 2009 and 2016 crisis according to Eurostat.

In comparison with the worst month of the COVID-19 crisis, imports from Russia to the EU fell by 25%, and relatively average supplies in 2018-2019 fell by more than three times.

The situation with exports is slightly better - a complete blockade was not achieved and European countries delivered goods to Russia in January-March 2023 by 3.8 billion euros on average per month, and in March 4.3 billion.

For comparison, the average monthly supplies from Europe to Russia in 2021 amounted to 7.4 billion euros, and in 2018-2019 they exported 7.1 billion per month. Losses of about 40-50% of pre-crisis supplies.

As a result, from the record deficit of trade with Russia in mid-2022 (reached up to 20 billion per month), the balance of foreign trade reached a record surplus in history (so far a symbolic 271 million euros in April). Apart from the 2022 anomalies, the pre-crisis deficit was 6-7 billion euros per month.

Russia's share in EU exports collapsed to 1.8% compared to 4-4.2% in 2017-2021, and in 2008 it reached 8% on average per year.

In this sense, the window to Europe has closed, and dependence on Russia in Europe has decreased to a historical minimum - these are geopolitical realities.

Recovery of foreign trade surplus

The YeS-27 's trade balance improved significantly, coming out of a record deficit in 2022 to its highest since November 2020 surplus in March 2023, close to an all-time high. The largest EU trade deficit with the outside world was in August 2022 - 66 billion euros.

The trade deficit began to accumulate from August 2021, when energy prices rose sharply, especially on gas. The escalation of the trade imbalance took place exactly one year until August 2022, during which time the accumulated trade deficit amounted to 350 billion euros. From September 2022, rapid improvement began against the background of a collapse in prices for the energy group.

In February 2023, for the first time since July 2021, they entered a surplus of 2.8 billion euros, and in March they recorded a surplus of 24.7 billion euros - this is a lot, because at the best of times the surplus was 28-29 billion euros, and the average monthly surplus for 12 months reached $25 billion in July 2016 and December 2020 in low energy prices.

Rising raw material prices have cost countries dearly. Europe From the best moment in May 2021 (228 billion euros of trade surplus for 12 months) went into a deficit of 433 billion by November 2022, i.e. a gap of 661 billion euros!

Now the situation is improving through a sharp reduction in imports while keeping high exports.

Since September 2022, imports have decreased by 22% or 61.9 billion euros per month, and in the structure of the reduction, the energy group accounted for 38.5 billion or 62% and another 3 billion for other types of raw materials, i.e. 67% is a raw material group.

Exports, by contrast, have set an all-time high, up 4.3% since September, with export improvements occurring across the commodity group, where the biggest effect is in the knowledge-intensive group (medical products, cars, mechanical engineering products, transport and electrical equipment).

Inflation, partially provoked by the dispersal of prices for the commodity group, contributed to the rise in prices for industrial goods, and this, in turn, made it possible to sharply improve the trade balance - raw materials fell in price, and industrial goods continue to inflate, Spydell Finance noted.

3 in the world in terms of wheat exports

Reducing trade deficit with Russia to a record low of 1.6 billion euros in February

The trade deficit with Russia (i.e. Russia's surplus with YeS-27) fell in February 2023 to a symbolic 1.6 billion euros per month after setting a record of 19.6 billion in March 2022. This is a very low deficit, 4-5 times lower than "normal."

This data covers only official trade through customs zones between countries, it does not take into account gray, smuggling supplies or trade through third countries on parallel imports.

Russia's share in EU exports decreased to 1.7% compared to 4.2% from 2017 to 2021, from 6.7% in 2012-2013 and 7% in 2008. It has never been so low in trade between Russia and the EU.

In February, exports to Russia from the EU countries halved compared to February 2022 to 3.6 billion euros.

Eurozone's record trade deficit at the start of the year

The trade balances of the Eurozone and Japan have sharply gone into the red. Data for February 2023

Energy crisis leads to EU trade deficit of 506 billion euros in 18 months

For the first time since July 2021, EU countries entered a surplus in the trade balance to trade with countries outside the EU - while the symbolic 4.8 billion euros per month for February 2023 compared to the norm of 20 billion.

From August 2021 to January 2023 (18 months) there was a continuous deficit with a cumulative total of 506 billion, while if it were not for the energy crisis, taking into account the seasonal norm, the surplus could be about 270-300 billion euros for this period, respectively, the accumulated effect of the energy crisis amounted to 800 billion over 18 months.

In terms of the moving average for 12 months, the peak deficit reached 430 billion by the end of 2022, and by February 2023 the deficit amounted to 406 billion compared to the deficit of 29 billion a year earlier (for 12 months to February 2022 inclusive).

Interestingly, if we assess the geographical structure of the deficit, it turns out that the main contribution was made not by Russia (129 billion) and not by OPEC countries (79 billion), and not even by Norway (95 billion euros), but by China, which formed a record deficit for the EU countries of 389 billion euros, i.e. China's contribution to the global deficit of foreign trade of the EU countries is 96%! Accordingly, all other countries integrally formed only 17 billion deficits in total.

In addition to the above countries, the foreign trade deficit in the EU countries for 12 months to February 2023 was formed in: Vietnam - 40.1 billion, Algeria - 29.5 billion, Malaysia - 20.6 billion, India - 20.4 billion, Kazakhstan - 19.5 billion, Libya - 18 billion, Indonesia - 14.7 billion, Saudi Arabia - 14.1 billion, Taiwan - 13.4 billion and Thailand - 12.8 billion euros.

The surplus of foreign trade over 12 months in the EU (i.e. the EU exports more than it imports) in a not very large list of countries: USA - 147 billion, - Britain 113.3 billion, - Switzerland 47.6 billion, - Mexico 21.6 billion, - Australia 20.6 billion, - UAE 21.6 billion, - 17.8 Canada billion, - 11.9 Israel billion and - 10.6 Singapore billion.

The destabilizing component of foreign trade is energy, and the stabilizing one is a solvent market for knowledge-intensive products, as can be seen in the structure of countries with a deficit and trade profile with the EU.

Record foreign trade deficit

2022

Record €432bn deficit in EU goods trade due to failed bid to pressure Russia

The highest EU trade deficit in history was recorded in 2022, in the amount of 432 billion euros.

The deficit was due, in particular, to a sharp increase in the cost of energy imports, which began at the end of 2021 and continued for most of 2022.

EU share in world exports - fell to 14%.

Europe's share of global exports is declining. European business is warning politicians in Brussels not to damage the bloc's trade competitiveness.

"During the next cycle, the EU will need to carefully reconcile economic security measures to avoid a negative impact on Europe's competitiveness, and refrain from overloading trade agreements by pursuing other political goals," BusinessEurope.

Trade deficit with China at 800 billion euros

Growth in trade with Russia by 2.3% to 258.6 billion euros. Record for 8 years

The trade turnover of Russia and the European Union at the end of 2022 reached a maximum in 8 years. The import of goods from Russia into the EU in 2022 increased by a quarter and reached 203.4 billion euros, which is only 230 million less than the historical high of 2012 (203.6 billion euros). At the same time, exports from the EU to Russia decreased by 38.1% - to the lowest 55.2 billion euros since 2005. However, such a decrease in Russia's import of goods directly from the EU did not prevent it from reaching the maximum level of trade turnover since 2014: it grew by 2.3% over the year - to 258.6 billion euros.

Less than 9% of EU and G7 companies left the Russian market during the conflict in Ukraine

Economists at the University of St. Gallen found that most of the companies headquartered in the EU and G7 countries continue to operate in Russia. Less than 9% of firms left the Russian market due to the situation in Ukraine. The results of the study were published in January 2023. Of those who remained in the country, 19.5% are companies from Germany, 12.4% are from the United States.

EU trade deficit in Russia remains at record levels

The trade surplus of Russia and the YeS-27 countries continues to decline for the seventh month in a row, but still remains at very high levels by historical standards.

In October 2022, Russia had a surplus of 8.8 billion euros with the EU countries, which is less than in October 2021 (9.4 billion euros), but should be compared with the average values.

The average monthly surplus in 2021 between Russia and the EU was 6.1 billion euros, in 2020 - 1.3 billion, in 2019 - 4.8 billion, in 2018 - 6.5 billion, in 2017 - 4.6 billion, and from 2012 to 2014 an average of 6.8 billion.

From 2013 to September 2021, the trade surplus did not exceed 8 billion euros, so the current 8.8 billion is very good, but significantly less in comparison with the anomaly after the SVO against the background of a record release of gas and oil prices.

In March 2022, the trade surplus was 19.6 billion euros, but has been continuously shrinking since April. From January to October 2022, the surplus amounted to a record 134 billion euros, compared with 53 billion in 2021.

This happens with the rapid compression of Russia's exports to the EU (the graph shows how imports from Russia to the EU-27). The maximum volume of exports from Russia to the EU was in March 2022 - 23.6 billion euros, and now - 13.1, but this is above the average 12 billion euros, which was considered a good pre-crisis level in the period before the pandemic in 2018-2019.

Imports from the EU to Russia stabilized by 4-4.3 billion euros, finding a balance under sanctions restrictions, but this is at least from 2009, 2015 and comparable to 2005. In general, imports almost halved from 7.6 billion euros between March and October 2021 to 4 billion in 2022.

Decrease in uranium supplies from Russia

At the end of 2022, the supply of Russian uranium to the countries of the European Union decreased, but the fall was insignificant. This was announced by the participants of the international forum World Nuclear Fuel Cycle, held in The Hague from April 18 to 20, 2023. Read more here.

EU is Turkey's biggest trading partner

Turkey is the EU's seventh largest trading partner. At the same time, the EU is Turkey's largest partner in the import and export of goods. In 2022, 26% of goods imports to Turkey were delivered from the EU, and 41% of goods exports to the EU.

The total trade in goods between the EU and Turkey in 2022 amounted to 198.1 billion euros (3.6% of the total EU trade with the world).

Growth in exports of chocolate products to Russia by 17.6% to a record 617 million euros

According to the results of 2022, the export of chocolate and sweets from the European Union to Russia increased to a historic maximum of 617 million euros. The EU countries imported almost 87 thousand tons of chocolate products into Russia in 2022. In monetary terms, European exports grew by 17.6% over the year.

Take-off of rare earth metal supplies from China for the production of military equipment and electronics

The main railway route for freight trains passes through the territory of Russia, which carry rare earth metals from China to the West, necessary in the production of microchips, electronics and other modern military equipment.

EU data shows that Russian railways are a key conduit for strategic metals. China supplies more than 90% of the volume of rare earth metals used in the EU. For nine months of 2022, the volume of railway supplies through Russia increased to 36 thousand tons, which is twice as much as for the entire 2021. At the same time, raw materials were transported, among other things, by Russian Railways trains, despite the company's inclusion in the EU sanctions list.

Exports of passenger cars to Russia decreased by 73% in 10 months to 679 million euros

Exports from the European Union to Russia of cars intended for the transportation of people in January-October 2022 amounted to 679.2 million euros against 2.52 billion euros a year earlier (-73%). Eurostat

Record volume of trade with Ukraine

The trade turnover of Ukraine and the EU is at its maximum in history, and exports from Ukraine to the EU in October 2022 updated their historical maximum, approaching 3 billion euros. Military turnover is not taken into account here.

From surplus to record deficit

The trade balance of the EU countries fell into a record deficit of 358 billion euros in the first 9 months of 2022 compared to a surplus of 91.7 billion euros, but since August 2021, the trade balance has already gone into deficit, whereas in a balanced raw material market and economic growth, the typical monthly surplus was 15-20 billion euros, and by September 2022, a deficit of 45 billion euros.

Europe loses 65 billion euros each month on foreign trade and up to 800 billion a year. The main contribution to the degradation of foreign trade was energy.

Here it is interesting to see what change in the foreign trade balance with the main trading partners outside the YeS-27.

The foreign trade deficit grew China from - it was 165 billion in the first 9 months in 2021, and became 300 billion euros, Russia with the deficit almost tripling from 43 billion to 126 billion euros. In third place - Norway it was 4.6 billion, and became 70.8 billion due to gas trade.

In the first 9 months of 2022, the EU increased the trade deficit with Vietnam to 28.6 billion against 20.8 billion in 2021, with Algeria increasing the deficit from 2.9 billion to 19.7 billion euros, with India 2.7 billion - > 16.4 billion and Malaysia 12.5 billion - > 15.7 billion euros.

The EU generates a foreign trade surplus with the USA (123.4 - > 113.2 billion euros), Great Britain (103.9 - > 76.3 billion euros), Switzerland (25.7 - > 28.1 billion euros), Mexico (10.6 - > 16.4 billion euros ), Canada (10.2 - > 14.8 billion euros), UAE (14.5 - > 15.8 billion euros) and Australia (17.8 - > 15.3 billion euros).

Among large countries Europe , the absolute anti-record of the trade balance France of and, Italy where the deterioration occurs continuously, breaking through new deficit highs. In another Germany surplus, but minimal in 25 years, and in aggregate, and Germany France Italy Spain captures the worst trade balance ever in trade with the whole world.

The rise of trade with Russia's neighbors due to circumvention of EU sanctions against the Russian Federation

The rapid growth of trade flows USA EU with neighbors Russia may be a sign that sanctions can be avoided, the European Bank for Reconstruction and Development believes.

German exports to Russia from May to July 2022 fell 38% compared to the average for the same period in 2017-2019. However, it almost doubled to Armenia and more than tripled to Kyrgyzstan - a trend also seen in trade flows to the Caucasus and Central Asia from the US, Britain and EU countries.

2021

Rapid growth in trade with China

December's record 13-year trade deficit

The eurozone reported its biggest trade deficit in 13 years. According to Eurostat, the eurozone trade deficit in December 2021 amounted to 9.7 billion euros ($11 billion).

Among the leaders in grain exports

2020: For the first time in history, China has become the EU's largest partner

Eurostat: for the first time in history, China in 2020 became the largest trading partner of the European Union, ahead of the United States.

In 2020, EU trade with China reached €586 billion ($711 billion) compared to €555 billion ($673 billion) for the United States.

2013: China-EU trade