Business asks the authorities for help in solving trade problems in the foreign market

Russian business fears the tightening of secondary sanctions and asks the government to strengthen measures to support the presence of Russian companies in foreign markets, including “friendly” ones. Settlements with foreign counterparties continue to raise the most questions. Yesterday at the RSPP forum, representatives of large companies asked to create mechanisms to protect them from pressure on counterparties from the risks of secondary sanctions, including a new mechanism for making payments, and to solve emerging problems centrally. Entering new markets, however, is complicated not only by the risks of sanctions, but also by the specifics of such markets, which are often very closed.

Participants in the international forum within the framework of the Russian Business Week of the Russian Union of Industrialists and Entrepreneurs yesterday shared concerns about the conditions of presence in foreign markets in the context of the government’s discussion of a new strategy for foreign economic activity. It, according to the Minister of Economy Maxim Reshetnikov, “is undergoing final approvals” (and, according to Kommersant, will remain “closed”). According to Deputy Prime Minister Alexei Overchuk, access to foreign markets of the Russian Federation is needed for the sake of the competitiveness of Russian business, in order to “have a market whose size and purchasing power will be sufficient to create technologies.” This will be facilitated by the global trend of forming macro-regions in the form of various customs and trade unions, he added.

In the meantime, the importance of the EAEU for foreign economic activity is growing – this is indirectly evidenced by the more active removal of barriers in this market: according to the head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, in two years, 15 barriers were eliminated, ten obstacles with signs of barriers, three restrictions, two exemptions, and also adopted a new classification of obstacles in the internal market – according to it, the union retains one barrier and 34 restrictions. To support union trade, the EAEU reinsurance company was launched (its budget will be 150 billion rubles, which will increase trade turnover within the union by $4 billion). Work is also underway to subsidize lending rates for union industrial cooperation projects – although the volume of subsidies for this year is only 1.7 billion rubles.

Maxim Reshetnikov said at the forum that the EU’s share in Russian trade has already decreased from 36% to 15%, while that of “friendly” countries has increased from 46% to 77%. While the volume of their common market for trade is estimated at 350 million people, the department expects to expand it to 700 million, the minister said – this requires new agreements on duty-free trade and a new network of investment protection agreements. They have already been concluded with 65 countries, agreements are being prepared with India, Saudi Arabia, Iraq, Oman, Congo, and the agreement with China will also be updated, Mr. Reshetnikov listed.

In addition, the department expects to develop an independent financial infrastructure, insurance and reinsurance (primarily transport services and port calls) and support for infrastructure projects of Russian companies abroad (these proposals are being discussed as part of the new strategy for the development of foreign trade activities, but require significant resources). There are many barriers in new markets, and in addition to sanctions, they require the creation of infrastructure – communications, trading, added EEC Trade Minister Andrei Slepnev.

Large businesses are still concerned about the issue of making payments – especially against the backdrop of reports of problems with payments in countries with which the Russian Federation has high trade turnover – Turkey and China (see Kommersant on January 17). We note that although the effects of increased secondary sanctions are difficult to detect in macrostatistics for 2023, and the growth of imports into the Russian Federation has been a concern for the Bank of Russia all year, in recent months, reports of counterparties refusing to work with Russian business are appearing more and more often. Companies are counting on the creation of a new mechanism for settlements, noted the head of Severstal, Alexey Mordashov, adding that business now also needs to protect the domestic market against the backdrop of “growing exports from new directions”: anti-dumping investigations still take too much time – on average one and a half of the year.

The head of the board of directors of the Renova Group of Companies, Viktor Vekselberg, said that if earlier the dialogue between business and the government was conducted under the slogan “just don’t bother us,” now it sounds like “you must help us.” He also proposed creating a single center to solve payment problems. “We need a change in the format of work; we do not have a free financial market,” he noted. Companies also face informal barriers, including when supplying Russian software; when exporting non-commodity products, China turns out to be the main competitor. “When promoting, the issue of financial instruments – subventions, subsidies, etc. – is extremely important; current measures to support exports are undercapitalized,” complained Viktor Vekselberg.

The risks of secondary sanctions also affect the exchange of customs information, added the head of the Federal Customs Service Ruslan Davydov – it is used to extend sanctions to partners of Russian companies. At the same time, in order to adapt to more stringent external conditions, in the last two years business received significant customs benefits: in 2022 their volume amounted to 1.1 trillion rubles, in 2023 – 550 billion rubles. (with import duties collected at 6.7 trillion rubles), for 2024 the collection plan has been increased by 1 trillion rubles – but the service will not collect these funds “through repressive methods,” Mr. Davydov promised.

Tatiana Edovina