Column by Tatyana Edovina on the difference between foreign trade barriers to raw materials and technology

Interest in the dynamics of Russian exports and imports has grown sharply against the backdrop of the weakening ruble. In conditions of a virtually closed capital account, export flows have become the only source of foreign exchange earnings, which, meanwhile, are less and less foreign exchange. Last week, the head of the Ministry of Economy, Maxim Reshetnikov, noted the growing share of funds returned by exporters in rubles.

In this light, headlines about the reduction in the share of Russian supplies to the EU may look frightening (the main reduction, however, occurred in the fall and winter, after the restriction of gas imports and the introduction of an embargo on the import of oil and petroleum products), but external demand for raw materials looks very stable — supplies can at least be redirected to other countries. Turkey serves as a hub in both directions: according to the Financial Times, Glencore in July this year delivered thousands of tons of Russian copper produced by the Ural Mining and Metallurgical Company (UMMC) through Turkey to Italy. The example can easily be generalized to the export of any other type of raw material, the consumption of which is in short supply on the world market (green technologies can increase the demand for raw materials, if we talk, for example, about copper in electric vehicles).

With technology, the situation is the opposite: the chains here are much more complex, and the question of origin is more acute. Violation of sanctions costs more, first of all, to the manufacturer himself, who, among other things, faces reputational risks. But it’s not just about sanctions: the added value from the export of finished products is higher, but the introduction of new technologies is not cheap. Restrictions on technology transfer for many governments look increasingly justified from an economic point of view, in contrast to the period of the 2000s, when the combination of cheap labor in Asia and Western technologies gave the maximum effect.

For Russian companies, this narrows the possibilities for both technological import and export (including outside of sanctions). “Eastern markets are even tougher, and manufacturers are dumping; no one wants to give us technologies either in the field of mechanical engineering, or in the field of aircraft manufacturing, or in the field of microelectronics. Moreover, they openly tell us: if you want to get some technology, buy the product as a whole,” Moscow Mayor Sergei Sobyanin complained at the Moscow Financial Forum. However, no one has canceled the effects of scale either – technological products produced for a small market will inevitably be more expensive. There is no hope for a repetition of the scenario of the eastern “tigers” and “dragons”: now everyone knows how to play protectionism.