Russian Federation

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Russia is widely regarded as one of the most naturally endowed countries on the face of

the earth. As a country, the Russian Federation is blessed with the world’s largest natural gas

reserves, the second largest coal reserves, and the eighth largest coal reserves. As will be

alluded to later in this paper, this creates an opportunity for the economic scope of the country

to be “over-dependent” on the oil sector especially regarding exports. This, mixed with the

complications of a perceived vastly corrupt government creates a negative horizon for this

beautiful country. However, in the short-term horizon, oil will continue to be a significant part

of the Russian economy. It was recently reported that China will ink a $25 billion deal to

become the main importer of Russian oil via loans to oil companies.

Interestingly enough, the corruption of the Russian economy has not gone unnoticed.

Transparency International has a corruption perception index widely credited with putting the

public sectors of certain countries in the public view. It reiterates the fact that to most people,

the Russian government has significant improvements to make. The following information in

this paper an in-depth understanding of the economic impact of specific elements in the

Russian economy. Section 1 will give a macro-economic and trade-related view of different

characteristics of Russia. These were scholarly articles compiled from journalistic databases

such as Sciencedirect, ebescohost, and other sources. Section 2 gives an examination of trade

restrictions and disputes filed by the WTO by and against Russia.

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Section 1: Russia at a glance:

In this section we use the IMF’s International Financial statistics (IFS) and the data from

OECD. Our observation period is 1992-2013. Some of the variables did not have data for the

whole observation period. In those cases we used everything that was indeed available.

In the empirical analysis we used the following variables: the growth rate of real GDP,

inflation, shares of imports, exports, and international trade in nominal GDP, terms of trade,

the current account, wage rates and manufacturing employment. Growth rate of real GDP is

calculated as the percent change in real GDP. Inflation rate is the percent change in the

Consumer Price Index (cpi). Exports are calculated as percent shares of nominal GDP, as are

imports. International trade is the percent share of nominal GDP occupied by the sum of

exports and imports. Terms of trade or the ratio of export prices to import prices was obtained

from the OECB. The current account is roughly the sum of exported goods and services minus

imports. It is expressed as a percent of nominal GDP. Data for manufacturing wages was not

available, so the wage rate was used instead. The IFS data for the wage rate was expressed as a

percent change over the previous period. Change in manufacturing employment was calculated

as a percent change in the index.

Descriptive statistics of the variables are summarized in Table 1. The average inflation

rate for the Russian Federation, or Russia, was 82%, and a standard deviation of 196. Changes

in wage rates show similar distribution patterns, with an average of 80% and standard deviation

of 179. However, it is important to note that changes in inflation, wages, imports, and exports

all exhibit similar patterns over the observation period. Their maximums occur in the early

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1990s coinciding with the formation of the Russian Federation. Then they plummet drastically

and from the late 1990s forward they exhibit considerably less volatility.

Section 2: Literature Review

In an article by Vladimir Shlapentokh (1997), he explains that after the fall of the Soviet

Union, Russia as a society opened up to the world in numerous ways. The transition since 1992

has been very unstable for the Russians and their economy as a whole. Openness to

international trade is always viewed as beneficial to a society in comparison to a closed

economy. Through trade with other countries, it is possible for Russia to improve their quality

of goods and services, as well as experience profits from items that they have a comparative

advantage in. As with any aspect of trade, there is the probability that every transaction doesn't

end positively. In this case, openness in Russia has also lead to many consequences that

threaten their economy in many different aspects relative to importing and exporting a variety

of goods. With the shift in Russia’s openness to the world today as opposed to its former closed

economy, there have been many positive and negative results from international trade.

Before the dismantling of the Soviet Union majority of Russians could not leave the

country. Mikhail Gorbachev started to relax these restrictions in the 1980’s, but it was Boris

Yeltsin who provided a full-scale opening of society after the collapse of the Soviet Union

(Shlapentokh, 2012). One of the biggest changes converting from a closed economy to an open

economy was the ability to now travel abroad. Along with this of course came international

trade relationships with other countries. Glasnost (Openness in Russia) was seen as a great

opportunity, beneficial to Russia as well as other trade partners. This new open economy

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promoted a substantial amount of economic growth stemming from increased production and

gains from trade.

As the new open economy began to emerge in Russia there have been some important

developments that can account for the positive and negative effects relative to international

trade. Globalization of the international economy is a real revolution in Russian life

(Inostrannye iazyki I poezdki za granitsu, 2011). Globalization has increased the flow of labor

migration as well as the flow of capital and consumer goods. Economic privatization has also

developed as a result of openness in Russia. This has increased corruption and uncertainty

within the country. Also a result of glasnost is the disappearance of a cohesive public ideology

that persuades people to be concerned about the interests of the country and society as a

whole (Green, 2011). This has both a positive and negative effects on Russia. Consumers have

been given the opportunity to buy diverse goods and services. Even Russian consumers with a

smaller amount of income will see the benefits relative to international trade because of low

prices as a result of comparative and absolute advantages.

As a result of globalization the negative consequences outweigh the benefits brought to

the Russian economy. The increased concentration on exporting oil and natural gas has opened

Russia to the “Dutch disease” of relying on fuel production to earn most of their revenue

(Kuvshinova, 2010). These are the main goods that the economy exports seeking gains from

trade. There is a huge uncertainty factor that comes along with these goods. The price and

production can easily be changed from a variety reasons for example a discovery of these goods

in another country or a substitute good. Russia relies heavily on the exports of oil and natural

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gases, but if the relative price of these good decreases the Russian economy will suffer its

consequences.

In 1992 when the Soviet Union dissembled, Russians had many predictions for the

future of their economy. The openness has brought many new developments to the country.

They are an illustration of how Russians have adapted to the new economy. As a result of

openness there have been many benefits, for example Russian consumers have a higher utility

as well as higher nominal income in comparison to the previously closed economy. On the

other hand, it has introduced a plethora of negative consequences such as “Dutch disease”.

Although lucrative gains from trade have been seen from gas and oil, the negative impact of

openness wouldn’t affect Russia as much if the price of these goods were lower. As a result of

the openness in Russia’s economy compared to the closeness of its past during the Soviet

system, both a negative and positive impact on the country has been established.

Russia is heavily dependent on its export of oil and oil-related resources. Such

dependence in this sector has left Russia vulnerable to the trade implications that come along

with having your economy heavily dependent on a specific resource. Specifically, more recent

news has been uncovered with Russia and its vulnerability with self-imposed trade restrictions.

Russia is a powerhouse of natural resources, holding the world’s largest natural gas reserves,

second largest coal reserves, and eighth largest oil reserves. As reported by the Observatory of

economic complexity, their top five exports are composed of crude petroleum, petroleum gas,

coal briquettes, and semi-finished iron. Others include wheat, gold, diamonds, and iron.

Russia’s top five imports include cars, packaged medicaments, vehicle parts, computers, and

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delivery trucks. Others include telephones, tractors, airplanes, helicopters and broadcasting

accessories.

Before entering the World Trade Organization, Russia was not able to capitalize on the

multilateral trading system provided by the WTO. This prevented Russia from taking advantage

of this unique opportunity. In an article by David Warner (2014), he explains that in with the

help of the government of Switzerland, Russia was able to become a member of the WTO in

August of 2012.

In an article by Deb Larson (2014), she expands on the notion that Russian behavior has

become hostile in the west, often rejecting help from diplomats representing US interests. She

also goes on to explain that there have been considerable “perceived slights.” This implies that

the Russian Federation has had the notion of being slighted by the U.S for a number of years.

Usually in cases of diplomacy, certain sacrifices have to be made by both parties in order for a

common ground to be reached. More on this subject, this may explain the idea that Russia has

been opposed the U.S. position of power in the United Nations, specifically its, “coalition-

building and diplomatic bargaining within international institutions to constrain the dominant

power (The U.S.).”

In a sense, the US is expanding on the already extensive list of sanctions on US exports

to Russia. This includes all items regulated on the US munitions list, high technology defense

articles, and many other articles that contribute to Russia’s military capabilities. To expand on

this subject, the Department of Commerce’s Bureau of Industry Security (BIS) is further

restricting Russia’s imports of American technology. The BIS controls exports and re-exports of

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commodities, technology, and software to support national security and foreign policy ,

including nuclear , chemical and biological weapons, and missile non-proliferation, human

rights, regional stability, and curbing terrorism. The BIS reports that the export sanctions, while

not interfering with the energy supply from Russia, does make it difficult for Russia to establish

stability with future long term projects. Other restrictions include vegetables, meat, fish, and

dairy products from twenty-eight countries in the European Union, Canada, Norway, and

Australia.

International trade in Russia has a number of disadvantages and also a number of

advantages. Depending on the angle one chooses to look at this topic from, either the benefits

outweigh the cost or vice versa. However, it will be useful to note that equal attention will be

given to the benefits as well as the costs of international trade in a country such as Russia.

The first cost or disadvantage of international trade in Russia will have to be the

association of corruption with Russian trade. It has been suggested that corruption in Russia has

been a persistent issue that has immensely affected the trade relations between Russia and

other trade partners (Judge et al., 2011; Levin and Satarov, 2000). Furthermore, as suggested by

Transparency International’s rankings in terms of Corruption Perceptions Index which ranks

countries based on how corrupt trade, public sector and economic practices are perceived to

be, Russia’s Corruption Perceptions Index was 136 out of 175 (Transparency International,

2014). It is also suggested that corruption in Russia is ubiquitous and indiscriminate, especially

among governmental parastatals in both local and international trade (Transparency

International, 2014).

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Another cost to Russia during international trade is associated with the problems that

arise due to capital flights. This can be as a result of corruption in the economic system,

economic and political unpredictability, or prominent international trade with countries that

have a higher currency value. It has been suggested that the Russian government has struggled

to regulate capital flight by using two strategies: first by trying to change Russia’s financial

system and currency procedures; and second by coming up with more efficient state controls

over international trade. However, these actions have not been effective due to the absence of

legal structures and institutional capabilities that can monitor and in time regulate these

developments (Tikhomirov, 1997). Capital flights (especially when linked with international

trade) can be tied back to the problem of extreme corruption in the Russian economy.

Tikhomirov (1997) goes on further to suggest that arrangements for exporting capital under the

disguise of foreign trade, which solely banks on the mispricing of goods, was first known to

have originated in Russia during the 1991–1993 period. Exported goods from Russia were

intentionally priced lower, while the imported goods were purposely priced higher with the

exporter typically getting an additional fee as bribe. As a result of corruption in international

trade in Russia, capital flight is aggravated and this in turn will diminish Russia’s tax base,

increase Russia’s public deficit, decrease domestic investment and will ultimately destabilize

Russia’s financial markets.

Benefits associated with international trade in Russia include lower-priced imports and

new inward investment. Foreign trade between Russia and other countries will stimulate

economic growth by creating jobs in industries that are export-oriented. Foreign trade in Russia

also creates economic, political and financial alliances between Russia and its trade partners.

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The European Union (EU) has been having trade misunderstandings with Russia over the

past years. The European Union (EU) is a global force to be reckoned with however, the EU has

been finding it quite problematic to influence Russia even though the EU is by far superior in

global power and influence than Russia in conventional terms (Leonard & Popescu 2007).

Leonard & Popescu (2007) go on to suggest that there are several factors responsible for this

dispute between the two entities. Some of them, as suggested are lack of unity, a poor strategy

management, and a misguided view of the significance of the power resources in a particular

circumstance. It has often been suggested that a critical weakness in the EU’s ability to use

power is its lack of unity. Even though the EU should act as a single entity in trade concerns, it is

still not a territorial state and its internal cohesion is fallible. Diverse member states can have

incompatible ideas about the preferred objectives, which impedes any coordinated action and

indicates a poor resolution in international disputes (Smith, 2001).

In an article by Forsberg Tuomas (2014), he expands on his belief that Russia’s

involvement in the Ukraine has put a strain on its relationship with The United States of

America and the European Union, which caused the US to put up sanctions on Russian Imports.

Russia’s response to these sanctions was to sanction its own imports from the countries that

sanctioned Russia. This all caused the Russian ruble to decline and Russia’s economy to fall.

The reason why the US, EU, and other countries sanctioned Russia was to diminish Russia’s

economy enough for Russia to leave Ukraine. In Mark Adomanis's article (2015), he explains

that this did in fact hurt Russia’s economy. The ones affected by these sanctions were Russia’s

Businesses. Large investors and energy companies could not do anything with Russia. Those

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businesses started to lose money. Since these major businesses played a major role in the

Russian economy, the economy started to fall. With Russia being a top oil and natural gas

producer, over the past year, oil prices have fallen. Russia is receiving less money that what is

has been used to in the past years. This also hurt the Russian economy. With all this in effect,

the Russian ruble has also declined.

In accordance with this information, the nations that are directly involved in trade with

Russia are experiencing economic problems. The diplomatic strain the government has caused

has directly affected the lifestyle of the people that live there. The people living in Russia are

experiencing inflation. Money is not flowing around the Russian economy for people to buy

more things. More companies are backing out of Russia because Russia’s economy is collapsing;

even larger companies. They see that there is no benefit to stay in Russia based on the actions

of the Russian Government.

Russia’s response to the sanctions were to sanction its own imports from the countries that

sanctioned Russia. This is Russia thinking that they are a great power still while they are still

trying to get back to that position. A reason for Russia to react in this way could be because of

confusion of the actions from the west. The Russian government feels it deserves more respect

while simultaneously trying to rebuild as a country, but because of disagreements in western

governments, diplomatic warfare has ensued. Russia’s actions with this sanction have

demonstrated their belief that they can prosper without the help of certain countries. With

this, of course, Russia is forced to become a self-dependent state.

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Russia’s hopes were that as a country they can be independent, however their actions have

resulted in the economic retraction they are experiencing. The worst part is that this may not

be the floor. In order for Russia to prosper, there has to be an infusion of capital, better trade

conditions for Russia and her partners, along with much needed entrepreneurial activity and

government assistance. The problem is with the current stance of the Russian government, this

is highly unlikely. Entrepreneurial activity needs time to have an effect on the economy. As Yury

Federov (2014) states in her article, it is the belief of Russian entrepreneurs that they must first

leave the country to improve their income, because Russia has a huge limit on its interactions

with other countries.

Section 3: Trade Characteristics and Disputes

Russia’s trade characteristics can be broken down into five essential main parts. These

include agriculture, energy, transport, science, and technology. Since its inception into the

WTO, population growth, higher domestic consumption, and a better functioning political

system has paved the way for Russia to improve as a country. 80% of its exports are oil, natural

gas, and metals. Although global oil prices have been declining, it still remains a significant part

of the Russian Gross Domestic Product. As a natural resource imbued country, the percentage

of exports dedicated to oil and mining may be reduced in the future, but more than likely it will

never be completely eliminated. In fact, in May of 2014, Russia and China inked a $400 billion

gas deal in which Russia will be China’s main supplier of oil for a very long time. Accession into

the WTO allows Russia to diversify the number of countries it can export to, while allowing for

the opportunity for economic growth.

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The first element in Russian trade is agriculture. Although its importance in the export

aspect of Russian trade may be undervalued when compared to oil, the agricultural sector

provides many jobs to its citizens. Main components include wheat, barley, oats, potatoes, and

rye. As of 2000, Russia has emerged as one of the world’s premier exporters on grain with a

14% market share. The main focus of the government has been to improve domestic

production in the agricultural sector. The shocks that have affected this include the surge in

food prices, the financial crisis of 2008, and the severe drought in 2010. This prompted

governmental assistance and the institution of specific federal programs.

The second element in Russian trade is energy. It is a well-known fact that Russia has

the world’s largest reserves of natural gas. This explains why oil and mining is such a significant

part of exports, as it has an implied comparative advantage in its production. Russia is also a

prominent energy producer because of improvements in its production of hydroelectricity. It

also was one of the world’s leading innovators in nuclear energy.

The third element of Russian trade is transport. Most cities in Russia have developed

railways, as the state-run “Russian Railways” is a monopoly. The most common types of

transportation are bus, trolley, and tram. As displayed in table 5, transportation service exports

account for 2.3% of total trade. The final category is science and technology. This accounts for

3% of its production and employment and key market indicators, as displayed by table 2,

include telephone subscriptions, internet subscriptions, and secure internet servers. It has seen

declining growth in energy conservation and consumer goods production, but a revamped

governmental effort and improving economy has led to more efficient energy use, innovative IT,

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and an increase in research and development spending for nuclear energy and

pharmaceuticals.

As discussed later in this paper, there were only two different types of disputes that

other countries imposed on Russia. These included cost adjustment methodologies and certain

anti-dumping measures on the items countries imported from Russia. The second type of

dispute was certain measures related to the energy sector. This so called “Third Energy

Package” had directives, regulations, legislation, and decisions that were inconsistent with

certain obligations under the articles of the WTO agreement that the European Union signed.

Russia adopted the terms of entry and became a member of the World Trade

Organization (WTO) on December 16, 2011 after over eighteen years of negotiations. These

long and complex negotiations were as a result of trying to negotiate a term favorable for both

the Russian Federation and the World Trade Organization (WTO) since the Russian Federation

applied to the WTO in June 1993.

According to 2010 rankings by the World Trade Organization, the Russian Federation

ranks twelfth place in terms of merchandise exports and eighteenth place in terms of

merchandise imports. Regarding commercial services world ranking, the Russian Federation

ranks twenty-third and ranks sixteenth in commercial services imports. The Russian

Federation’s share in world total exports for merchandise is 2.63% while the share in world

total imports is 1.61%. In regards to commercial service trade, Russia’s share in world total

exports is 1.19% while the share in world total imports is 2%.

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Merchandise exports are worth $400,132 (in millions) and imports are worth $248,738

(in millions). Russia’s main destinations of exports are European Union (52.2%), Ukraine (5.8%),

Turkey (5.1%), China (5.1%) and Belarus (4.5%). The main origins of imports are European Union

(38.3%), China (15.7%), Ukraine (5.6%), United States (4.5%) and Japan (4.1%). Principal

merchandise goods traded (exports and imports) include agriculture, fuels and mining products,

and manufactured products. Commercial services exports are worth $43,961 (in millions) and

imports are worth $70,223 (in millions). Principle services traded (exports and imports) are

transportation and travel.

Russia has been an official member of the WTO since August 2012. Its contribution to

the WTO budget is over 2 percent (WTO a). The average import duty on all goods is 7.7 percent.

However, non-ad valorem tariff rate is 9.1 percent (WTO a). Import duties constitute only 5.8

percent of tax revenues in Russia (WTO a). 14 percent of agricultural products and 33 percent

of non-agricultural imports enter the country duty-free (WTO a). Table 1 summarizes tariffs and

imports imposed by Russia. It can be seen that animal products, beverages and tobacco have

the highest tariffs while cotton and petroleum have the lowest tariffs. Table 2 summarizes the

duties faced from exporting to major trading partners. It can be seen that the European Union

is the largest trading partner for Russia, especially for non-agricultural products.

As characterized by the WTO website, a dispute arises when a member government

believes another member government is violating an agreement or commitment that has been

made in the WTO (WTO c). They are usually settled through the dispute settlement body, after

a request for a panel has been granted. The most common dispute Russia seems to have with

other members of the WTO are cost adjustment methodologies and certain anti-dumping

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measures on items that other counties import form Russia. Although there are different sub-

categories in the anti-dumping cases, it is by far the most prevalent. Countries that have

reported these disputes with Russia include Argentina, Australia, Canada, China, Indonesia,

Norway, Turkey, Ukraine, and the United States. These countries have voiced their disapproval

as complainants, third parties, or respondents.

Elements of the anti-dumping cases involve rejection of price and cost information of

producers and exporters in the country of origin, imposition, continuation, and collection of

anti-dumping duties and use of these duties as specific action against government subsidiaries.

The second most common dispute is measures related to the exportation of rare earths.

For Russia, this was mostly third party involvement on the restrictions certain countries put on

the export of rare earths. Countries involved in this dispute included China and Indonesia. All

other disputes varied.

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APPENDIX

Table 1: Descriptive Statistics (1992 – 2013)

Variable name Number of observations

Mean Standard deviation

Minimum Maximum

Inflation rate 21 8.22 196.24 5.07 874.62

Growth rate of real GDP 18 3.73 4.90 -7.82 10.05

Exports (X) 22 33.94 8.48 24.73 64.25

Imports (M) 22 24.45 6.16 20.14 49.75

International trade (X+M)

22 58.39 14.13 47.26 114.00

Terms of trade 19 92.00 28.43 56.07 137.46

Current account 15 0.58 0.33 0.34 1.64

Change in wages 21 80.26 179.32 7.15 822.10Change in manufacturing employment

21 -2.94 5.10 -11.42 10.50

*Notes: Exports, imports, international trade, and current account are expressed in terms of percent of nominal GDP.

Figure 1: Real GDP growth and inflation rate

19921994

19961998

20002002

20042006

20082010

2012

-200

0

200

400

600

800

1000

rgdpgrinf

*Data taken from IMF’s International Financial statistics (IFS) and the OECD

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Figure 2: Share of international Trade in nominal GDP

19921994

19961998

20002002

20042006

20082010

20120

20

40

60

80

100

120

xgdpmgdpxmgdp

*Data taken from IMF’s International Financial statistics (IFS) and the OECD

Figure 3: Terms of Trade (2005=100)

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0

20

40

60

80

100

120

140

160

*Data taken from IMF’s International Financial statistics (IFS) and the OECD

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Figure 4: Share of current account in nominal GDP

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

*Data taken from IMF’s International Financial statistics (IFS) and the OECD

Figure 5: Percent change in wages and manufacturing employment

19921994

19961998

20002002

20042006

20082010

2012-100

0

100

200

300

400

500

600

700

800

900

mwagchmempch

*Data taken from IMF’s International Financial statistics (IFS) and the OECD

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Table 2: Tariffs on imports imposed by Russia

Summary Total Ag Non-AgSimple average final bound 7.7 11.1 7.2Simple average MFN applied 2013 9.7 12.2 9.3Trade weighted average 2012 9.1 14.7 8.3Imports (in billions) $US 2012 314.8 38.5 276.3

Tariffs and imports by product groups

*Source: WTO (b)

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Table 3: Russia Exports to Major Trading Partners and Duties Faced (2012)

*Source: WTO (b)

Table 4: Russia’s Top Trade Export Partners

Country (Trade Partners) Percentage of ExportsEuropean Union 52.20%

Ukraine 5.80%Turkey 5.10%China 5.10%

Belarus 4.50%*Source: WTO (c)

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Table 5: Russia’s Top Trade Import Partners

Country (Trade Partners) Percentage of ImportsEuropean Union 38.30%

China 15.70%Ukraine 5.60%

United States 4.50%Japan 4.10%

*Source: WTO (c)

Table 6: Merchandise Trade Summary for the Russian Federation

MERCHANDISE TRADE Value Annual percentage change2013 2005-2013 2012 2013

Merchandise exports, f.o.b. (million US$) 294 10 1 -1Merchandise imports, f.o.b. (million US$) 980 13 4 2

2013 2013Share in world total exports 2.78 Share in world total

imports 1.82

Breakdown in economy's total exports Breakdown in economy's total imports

By main commodity group (ITS) By main commodity group (ITS)

Agricultural products 5.7 Agricultural products

13.0

Fuels and mining products 71.4 Fuels and mining products

3.0

Manufactures 19.3 Manufactures 75.3 By main destination By main origin1. European Union (28) 45.8 1. European Union

(28) 42.6

2. China 6.8 2. China 16.93. Japan 3.7 3. United States 5.34. Kazakhstan 3.3 4. Ukraine 5.05. Belarus 3.2 5. Belarus 4.4 Unspecified destinations   12.8   Unspecified

origins    0.1

*Source: WTO (c)

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Table 7: Commercial Services Trade for the Russian Federation

COMMERCIAL SERVICES TRADE

Value Annual percentage change

2013 2005-2013   2012 2013Commercial services exports (million US$)

64 769 13 7 11

Commercial services imports (million US$)

123 008

16 19 18

2013 2013Share in world total exports 1.39 Share in world total imports 2.81Breakdown in economy's total exports Breakdown in economy's total

imports By principal services item By principal services

itemTransportation 31.7 Transportation 14.2Travel 18.5 Travel 43.5Other commercial services 49.7 Other commercial services 42.3

*Source: WTO (c)

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Table 8: Summary of trade disputes involving Russia

Foreign Party As Complainant As Respondent As 3rd Party

European Union -Anti-Dumping (imports from Russia)-Energy Sector Measures

-Recycling Fee on motor vehicles-Import of pigs, pork, and other pig products-Anti-Dumping (light commercial motor vehicles from Germany/Italy)-Tariff Treatment (Agriculture)

-Exports (rare earths, tungsten, molybdenum)-Tax incentives for large aircrafts

Japan recycling fee on motor vehicles -Anti-Dumping (stainless steel seamless tubes)

Canada/Norway -Imports (Marketing/Seal products)

United States -Anti-Dumping (steel)

China -Exports (rare earths, tungsten, molybdenum)

Dominican Republic -Trademarks (Tobacco Products)

India -Solar Cells/Modules

Cuba -Trademarks (Tobacco Products)

Indonesia -Trademarks (Tobacco Products)

Ukraine -Safeguard Measures on passenger cars

Denmark -Atlanto-Scandian Herring

Brazil -Taxation/Charges

Argentina -Anti-Dumping (biodiesel)

Korea -Anti-Dumping (Oil tubular goods)

Total Number of Cases

2 5 20

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When Russia became an open country, this caused positive and negative benefits. This

increased the flow of labor migration as well as the flow of capital and consumer goods which

gave the Russian consumers benefits relative to comparative advantages and absolute

advantages. Because of this globalization Russian has experienced more negatives due to the

Dutch disease. Since Russia is heavily dependent on its export of oil, this leaves Russia

vulnerable. Disputes between Russia and the US have caused problems in the United Nations.

Both countries interests are perceived as a threat by the other country. Also knowing that

Russia Is corrupt, this has caused many problems with international trade such as other

countries knowing how corrupt Russia is, that they do not want to trade with Russia. Another

issue that Russia is facing is sanctions. Mainly the US and EU have sanctioned Russia because of

Russia’s involvement with the Ukraine. Russia’s response to these sanctions was to implement

sanctions on the country’s that sanctioned Russia. In the end, this was a major hit to the

Russian economy.

The elements of Russian trade are agriculture, energy, transport, science and

technology. Even though Russia’s main export is oil, Agriculture still plays a significant role.

Russia had emerged as one of the world’s premier exporters on grain. As far as energy, Russia

has the world’s largest reserves of natural gas. The two different types of disputes that other

countries imposed on Russia were cost adjustment methodologies and anti- dumping

measures.

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References

Adomanis, Mark. "Is Russia's Economy Rebalancing In The Face Of Western Sanctions? Not

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