About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (January 17, 2023)

handle is hein.crs/govekgo0001 and id is 1 raw text is: Congressional Research Servioe Informing the legislitive debate since 1914 S Updated January 17, 2023 Russia's Trade and Investment Role in the Global Economy The invasion of Ukraine by the Russian Federation (Russia) in February 2022-and the expansion of U.S. and international sanctions that followed-has heightened congressional interest in understanding Russia's economy, including the composition, direction, and value of its trade and investment flows. Members of Congress may have an interest in scrutinizing these flows to better understand any potential economic leverage that the United States and allies may have to compel Russia to change course, and to help inform potential additional U.S. policy responses. Russia's Economy Russia's significance in the global economy is tied to its role as a major energy and grain producer and exporter. Outside commodity markets, Russia has long been a relatively minor economic actor, despite its large land mass and population. Its economy, the 1 th largest in the world, accounted for 1.8% of the world's total output in 2021 and remains weakly integrated into global value chains (GVCs) (Figure 1). Despite Russia's stated desire to diversify its economy for decades, oil and gas dominate Russia's goods (merchandise) exports and account for a large share of the government's budget revenue. For more detail, see CRS Report R46518, Russia: Domestic Politics and Economy. Figure I. Russia's Role in the Global Economy AMOUNT GLOBAL SHARE /RANK GDP ($bn, current)' $1,778.5 1.8% 11th Trade Goods Exports ($bn)' $493.8 2.2% 13th Goods Imports ($bn)' $304.0 1.3% 22nd Services Exports ($bn)2 $48.6 0.9% 26th Services Imports ($bn)2 $75.9 1.3% 19th FDI Outward FDI Stock ($bn)' $399.3 1.0% 22nd Inward FDI Stock ($bn)' $521.9 1.1% 20th Int'l. Reserves ($bn, incl. gold) $582.03 4.2%' 6th' Energy Production Petroleum/Other Liq. (Mb/d)' 10,777 1I13% 3rd Natural Gas (bcfP 24,775 17.2 2nd Date of data: (1) 2021; (2) 2020; (3) 01/06/2023. Sources: CRS analysis using data from the IMF, World Bank, EIA, UNCTADstat, Russia's Federal Customs Service, and Bank of Russia. Russia's Trade with the Worid Trade is relatively important to the Russian economy: the ratio of Russia's goods trade (exports plus imports) to GDP has averaged about 40% in recent years, compared to 20% for the United States. In 2021, Russia ranked 13th among world goods exporters and 22nd among importers. According to Russian official sources, its goods exports totaled $492 billion in 2021, up 46% from 2020 (not adjusting for inflation) (Figure 2). Minerals, including oil and gas, accounted for almost 45% of these exports. Goods imports increased 27% to $294 billion in 2021. Machinery and mechanical appliances was the top import category, accounting for almost a third of Russia's goods imports. Recipients of goods exports were highly concentrated geographically. In 2021, top export destinations were the European Union (EU), followed by China and Turkey. In recent years, China and other Asian economies have accounted for a growing share of Russia's oil and gas exports. Sanctions, combined with the halting of the Nord Stream 2 pipeline project and uncertainties surrounding the status of regional transmission systems, could accelerate this trend. The EU was the largest source of Russia's goods imports in 2021, followed by China and the United States. The U.S. share of Russia's 2021 goods exports and imports stood at 4% and 6%, respectively. In services trade, Russia ranked 26th among world exporters and 19th among importers in 2020, the most recent year for which there is data. It was a net services importer, exporting $49 billion worth of services and importing $76 billion. Participation in Trade Agreements. Russia joined the World Trade Organization (WTO) in 2012, after nearly two decades of negotiations on the terms of its accession. The U.S. Trade Representative (USTR) has consistently raised concerns about Russia's compliance with its WTO commitments. In its most recent review on Russia (as mandated by statute), the USTR noted that the country continues to disregard its WTO commitments and maintains restrictive trade measures that distort trade. Russia is a founding member of the Eurasian Economic Union (EAEU) and is party to EAEU trade agreements with Vietnam, Iran, Singapore, and Serbia. In 2018, the EAEU signed a trade cooperation agreement with China, and it is in trade negotiations with India, Israel, and Egypt. Russia is also a party to several agreements that predate the EAEU. As the United States does not have a bilateral trade deal granting more preferential terms, WTO most-favored- nation (MFN) terms governed U.S.-Russia trade until P.L. 117-110 suspended U.S. normal trade relations with Russia in April 2022. (Some other countries have also revoked Russia's MFN status.) As a result, U.S. imports from Russia are ineligible for MFN treatment and might face higher U.S. tariff rates. Congress and President Biden have also banned certain U.S. imports from Russia, such as oil. Supply Chains. Russia is relatively poorly integrated into GVCs, partly due to its economic structure and business environment. Nevertheless, some industries around the world are dependent on Russian inputs for which there are limited alternative sources of supply. Russia is one of the largest producers and exporters of certain grains and critical minerals. For example, the country is a leading exporter of neon (for semiconductors), palladium (catalytic converters), and titanium (aircraft). Shortages and plant stoppages, combined with port closures and restricted Europe-Asia transit routes due to sanctions, have affected production,

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most