Since 1997, the EU`s political and economic relations with Russia have been based on a bilateral Partnership and Cooperation Agreement (APC). The trade components of the agreement aim to promote trade and investment and to establish mutually beneficial economic relations between the EU and Russia. Since 2014, the illegal annexation of Crimea and the conflict in eastern Ukraine have seriously undermined bilateral political dialogue. As a result, some of the political dialogues and cooperation mechanisms, including in the trade field, have been suspended. Figure 1a shows Russia`s position as one of the largest distributors of goods in the world in 2018. The top four exporters were China (2,107 billion euros, 16%), the EU-27 (2,060 billion euros, 15%), the United States (1,412 billion euros, 10%). Japan (626 billion euros, 5%). The four main importers were the United States (2,214 billion euros, 16%), the EU-27 (1,908 billion euros, 14%), China (1,810 billion euros, 13%). Japan (634 billion euros, 5%). Figure 1b contains other details.
It shows that Russia (376 billion euros, 3%) was the tenth largest exporter in the world between Canada (382 billion euros, 3%) Singapore (350 billion euros, 3%). It was the 15th largest importer in the world (211 billion euros, 2%) Utd. Arabic. Em. (222 billion euros, 2%) Thailand (210 billion euros, 2%). For more details on EU-Russia trade, see Chart 7, which shows the 20 most traded products at CTCI-3 level. In 2019, these top 20 products covered 55% of total merchandise trade. Six were machinery and vehicles and other manufactured products, four for energy, three for chemicals and one for other products. The highest rated group of products at this level was crude oil. Another interesting way to look at the data is to examine the hedging ratio (exports/imports) of traded goods, which indicates the direction of trade flows between the two economies. You will find this situation to the right of Figure 7.
Nine goods were less than 50%, indicating that EU imports from Russia were at least twice as high as EU exports to Russia. Eleven goods were above 200%, indicating that EU exports to Russia were at least twice as high as EU imports from Russia.