Showing posts with label Russia-Ireland trade. Show all posts
Showing posts with label Russia-Ireland trade. Show all posts

Tuesday, July 29, 2014

29/7/2014: Latest Round of EU Sanctions: Mirroring the U.S. and upping the ante...


EU finally agreed on the new round of sanctions against Russia - the full document is available here: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/144159.pdf

"In order to restrict Russia's access to EU capital markets, EU nationals and companies may no more buy or sell new bonds, equity or similar financial instruments with a maturity exceeding 90 days, issued by state-owned Russian banks, development banks, their subsidiaries and those acting on their behalf. Services related to the issuing of such financial instruments, e.g. brokering, are also prohibited." This is basically symmetric to the previous US sanctions (see: http://trueeconomics.blogspot.ie/2014/07/1772014-more-russia-sanctions-same.html note: updated link to US sanctions here: http://www.treasury.gov/press-center/press-releases/pages/jl2572.aspx) though EU sanctions are covering all "state-owned Russian banks, development banks, their subsidiaries" not just those covered in the US sanctions.

"In addition, an embargo on the import and export of arms and related material from/to Russia was agreed. It covers all items on the EU common military list." These involve military equipment and equipment modified for military use, albeit some Mercedes G-Wagon retrofits, favoured by Russian vintage mafiosi, might qualify as well. Maybachs with protective plating will probably escape, unless someone orders an all-wheel-drive one...

"…prohibition on exports of dual use goods and technology for military use in Russia or to Russian military end-users." These are problematic as the lists are more ambiguous and broader. I am not an expert on this subject, but overall, such blanket prohibitions under what often amounts to relatiist testing procedures can have a much broader impact than intended.

"Finally, exports of certain energy-related equipment and technology to Russia will be subject to prior authorisation by competent authorities of Member States. Export licenses will be denied if products are destined for deep water oil exploration and production, arctic oil exploration or production and shale oil projects in Russia." This is symmetric to the US sanctions. It is interesting to note that the sanctions are designed specifically to hurt Russian energy sector in areas where the sector competes head-on with US and Canada: shale oil and arctic oil. On-shore traditional oil is not impacted.

Materially, and speaking strictly personally, I do not expect the new round of sanctions to have a direct impact on Irish bilateral trade with Russia, relating to goods, but we can see significant impact on transactions via IFSC (http://trueeconomics.blogspot.ie/2014/07/2172014-sources-of-fdi-into-russia-2007.html). You can see breakdown of goods flows with Russia here: http://trueeconomics.blogspot.ie/2014/07/1772014-irish-bilateral-trade-in-goods.html. The impact is intended, as in the case of the US sanctions, to be longer-term, restricting funding opportunities for major Russian companies and reducing their free cash flows (by forcing them to use cash flow to close off maturing debt). Ironically, also in the longer term, this can lead to Russian companies issuing more equity and debt domestically, deepening domestic financial markets, and carrying less debt overall, making their balancesheets stronger. The short-term impact is likely to be reputational and risk-related as some exporters and investors will opt to stay out of the Russian market in fear of future additional sanctions and faced with a prospect of dealing with EU and US bureaucracy (not to mention the prospect of dealing with their Russian counterparts).

On a geopolitical note, the sanctions are now starting to ramp up pressure on Russian leadership. What the reaction might be is anyone's guess, but I suspect we are not likely to see major and rapid de-escalation soon (http://trueeconomics.blogspot.ie/2014/07/2872014-double-up-or-stay-course-in.html). Which is not a good outcome for all parties concerned and especially for the Ukrainian people.


Updated: the US has now matched the broader EU sanctions: http://www.reuters.com/article/2014/07/29/us-ukraine-crisis-sanctions-obama-idUSKBN0FY27Q20140729?utm_source=twitter U.S. sanctions on banks remain in the area of funding, but not in the area of transactions.


Friday, December 16, 2011

16/12/2011: Ireland-Russia bilateral trade, September 2011

Based on yesterday's data for external trade, let's update Irish bilateral trade in goods data with Russia.

Irish exports to Russia totalled €46.9 million in September, up 61.2% yoy, against Irish imports from Russia of €7.8 million, up 14.7% yoy.


Irish trade surplus with Russia stood at €39.1 mln in September, up 75.3% yoy.



Revising annual forecast, I now expect Irish exports to Russia to reach €520 million in 2011, against €373 million in 2010, while Irish imports from Russia to settle at €125 million, down from €159.7 million in 2010. The resulting annual trade surplus will be around €398 million or more than the combined trade deficits in Irish trade with China and India in 2010.

January-through-September period trade surplus data for various non-EU countries expressed in millions of euros are detailed in the table below:

So in terms of trade surplus, Russia was Ireland's 5th most important trading partner.

Sunday, October 23, 2011

23/10/2011: Ireland-Russia Trade for July 2011

Another data update - for bilateral Russia-Ireland trade flows. It's been some time since I looked at these series (CSO reports the data monthly with 1 month delay on overall trade flows data).

July 2011 exports to Russia rose from €37.3mln in June to €48.8mln. Year on year, exports to Russia are up 53.5%. Imports from Russia in July 2011 stood at €4.4mln, up on €2.5mln in June and down from €6.4mln in July 2010. Imports are now down 31.3% year on year.

Trade balance with Russia rose to €44.4mln in July 2011, up 74.8% yoy.

Annual forecasts for Ireland-Russia trade are looking solid.

For seven months through July 2011, Irish trade balance with Russia was €241.6mln, up on €122mln for the same period in 2010. In contrast, Irish trade balance with Brazil was €54.2mln in 7 months through July 2011, down from €66.5mln in same period 2010. Irish trade balance with China was -€91.5mln in January-July 2011, a major deterioration on €75.3 trade surplus in the first seven months of 2010. Irish trade balance with India posted a deficit of -€89.9mln for the first seven months of 2011, compared to -€80.5mln in the same period of 2010.

Over first seven months of 2011, Ireland's trade surplus with Russia was larger than our trade surplus with Canada (€158.7mln), Malaysia (€140.3mln), Mexico (€178.3mln), Singapore (€145mln - note that Singapore acts as a major entry point for global trade to the broader South-East Asia), South Africa (€99.3mln) and Turkey (€138.8mln). 

Of all BRIC countries, Russia was the only country that delivered improved trade surplus for Ireland.