Russia’s Trade and Economic Cooperation with Europe before and after the Start of the Special Military Operation

Abstract

The article examines the results of three decades of cooperation between Russia and Europe, achievements and problems in trade in goods and services, and investment cooperation. It is shown that business relations with Europe noticeably deteriorated aft er the aggravation of the political crisis in Ukraine in 2014, and the sanctions issue began to have an increasingly adverse impact on the development of mutual economic ties. With the launch of a special military operation in February 2022 and the subsequent new economic and political sanctions imposed by European countries, unprecedented in scale, scope and depth, the volume and quality of business cooperation with Europe have plunged. This affected both trade and investment. In fact, there was the largest curtailment of economic cooperation between important economic centers in recent history. As a result, Europe lost its role as Russia’s main economic partner in 2022, primarily in trade, and its place was confidently taken by the collective East (the countries of Asia and the Middle East). Meanwhile Russia has lost its leadership position in the EU energy market. The accelerated “pivot to the East” was accompanied by a decrease in geographical diversification of Russian exports and imports as well as the further growth in fuels and raw materials orientation of sales in the eastern direction.