World Economy

US Trade Ban Won’t Hurt Russia Economy

US Trade Ban Won’t Hurt Russia EconomyUS Trade Ban Won’t Hurt Russia Economy

Another Russian lawmaker is thinking that the latest move in the US-Russia trade spat won’t have an impact on the economy.

The deputy head of the Russia’s Federation Council Committee on Economic Policy, Sergei Shatirov, said the decision by the US Trade Representative to remove Russia from its General System of Preferences (GSP) wouldn’t hurt the economy.

“We are talking about the benefits for Russian goods on the American market. There will be no shocks for Russia’s economy,” Shatirov told RIA Novosti. “We will look for new markets. It’s necessary to adapt, all kind of things can happen,” he told the newswire this weekend.

The US decided in the spring to exclude Russia from the list of emerging economies that were granted reduced tariffs under GSP rules. The move was viewed from Moscow as part of Washington’s first round of sanctions to punish the Russian government for its involvement in a political standoff with Ukraine.

 Ramifications Minimal

The removal was “a political signal” showing Washington’s willingness to remain in conflict with Moscow, Mikhail Yemelyanov, First Deputy of the Chairperson of the Russian State Duma Committee on Economic Policy, said.

According to him, the removal of the benefits would not be damaging to the Russian economy.

“The ramifications will be minimal since the volume of the trade with the United States is not large,” he said.

Russia is the 9th largest beneficiary of GSP with almost $544 million worth of goods exported under the program in 2012. It would feel the effect of its removal in various sectors, but most notable would be the effects on producers of ferrosilicon, ferrochromium, articles of chromium, various articles of aluminum, refined lead, pneumatic radial tires of rubber and wheat gluten, which are the goods occupying the top spots by value in the list of Russian goods exported under the scheme in 2012 and 2013.

 Volume of Trade

The GSP allows exporters to avoid generally applicable duties in the range of 1.5 – 5.8%, while Russian exporters of other exported goods can get tariff reductions of up to 17.9% due to the GSP.

In April 2014, the US imported $2.35 billion worth of goods from Russia compared with $2.44 billion in April 2013, according to trade figures from the US Census.

By August, US imports of Russian goods declined to $2.14 billion compared to $2.3 billion a year ago. Overall, trade between the two countries is relatively unabated.

US goods exports in 2013 were $11.2 billion, up 4.3% from the previous year. Corresponding US imports from Russia were $27.0 billion, down 8.2% . The US goods trade deficit with Russia was $15.8 billion in 2013, down $2.9 billion from 2012. Russia is currently the 28th largest export market for US goods, according to the US Trade Representative.