Since 1 January 2015 Russia, Kazakhstan, Belarus and Armenia have formed the Eurasian Economic Union (EAEU). Open to future accessions among the countries of the Commonwealth of Independent States, the EAEU expanded in August of the same year with the entry of Kyrgyzstan. In analogy to the path followed in the European Union, the action of the UEEA moves in two directions, one internal and one external. The first is aimed at the process of economic integration between the member countries, with the creation to aim, in the heart of the vaster Euro-Asian region, of an area of free exchange of goods, services and capital and freedom of movement of people; the second is aimed at cooperation with external interlocutors, in particular with the countries of the neighboring areas of Europe (EU in primis) and Asia (China and Central Asian countries but also the Middle East and South East Asia), through trade agreements, infrastructure projects (particularly in the transport, logistics and energy sectors), strengthening of security.
It is undoubtedly an ambitious project, with some evident strengths to its credit but also undoubted criticalities. Among the strengths, the synergies with similar initiatives in the Euro-Asian area, in particular with the Belt and Road Initiative promoted by China. Many of the works in the pipeline or being defined within the BRI are aimed at increasing connectivity between the countries along the ancient Silk Road and crucially involve, given the geographical position, both the UEEA countries and the other CIS countries, Caucasians and Central Asians. Their realization represents a potential factor of development and integration of the region. Among the critical issues, the tensions between Russia and the EU, still present three years after the introduction of the regime of sanctions and counter-sanctions between the parties. The deterioration of relations between Russia and the European Union effectively hinders the development of relations (diplomatic and business) between the EAEU and the EU as well as, a fortiori, precluding the creation of a common space from Lisbon to Vladivostock, in the Russian vision of a Greater Europe.
Given the stalemate in which international diplomacy finds itself in the face of the Ukrainian crisis, significant progress is not expected in the short term in relations between the EU and Russia. Glimpses could open, in the opinion of some observers, with the recent Russian proposal for a United Nations peacekeeping mission in Eastern Ukraine, but progress would not be immediate in any case. Despite the many challenges, however, it is the opinion of the authors of a recent study coordinated by the IIASA2 that a cooperative approach instead of a competitive one between the two regions will eventually prevail, paving the way for agreements which, in view of the mutual benefits they could result, could go beyond the commercial dimension alone. The UEEA presents itself to all intents and purposes as an interlocutor of both economic and geopolitical weight at the international level and in relations with the neighboring regions of Europe and Asia.
The region can count on over 180 million inhabitants, on a territory of more than 20 million km2 and on a rich endowment of raw materials. Globally, EAEU countries account for almost 4% of GDP, 2% of trade and over 2% of the stock of incoming FDI. Characterized, on the one hand, by a conspicuous availability of energy reserves and, on the other, by a high need for capital goods and a growing demand for quality consumer goods, the countries of the EAEU represent, from an economic point of view, a area of absolute strategic interest for the EU and, given the peculiar productive specialization, for Italy. For its part, the EU represents the main supply and outlet market of the UEEA countries, with a total trade coverage of more than 40% in 2016. Commercial movements between the two areas are represented by complementary products.
EAEU exports to the EU, expressed as a share of the EAEU exported sector total, are mostly made up of minerals, in particular energy (almost 60%) and metals (over 30%), while EAEU imports from EU, expressed as a share of the sectoral total imported by the EAEU, see the prevalence of machinery and means of transport (almost 40%) and chemical products (almost 60%), followed by agricultural and food products (over 20% ). The EAEU's share of total trade sees the participating countries in different positions, with Russia alone nearly 80%; followed by Kazakhstan with 11%, Belarus with 9% and, finally, Kyrgyzstan and Armenia with shares close to 1%. With regard to the dynamics of trade, in the first five months of 2017 the multilateral trade of Russia, Kazakhstan and Kyrgyzstan (the three EAEU countries for which data referring to that period are already available), including intra-area trade, show a clear recovery of both import and export.
Imports were close to $94 billion, up year-on-year by almost 25% y/y, while exports exceeded $156 billion, up more than 30% y/y to. Even in a still difficult geo-political context and in the presence of a regime of sanctions and counter-sanctions between Western countries and Russia that is still in force, total trade grew by 28% to approximately 250 billion dollars. Transactions benefited, on the export side, from both the (partial) recovery in hydrocarbon prices and from the positive tone of the world economy, and, on the import side, from the recovery of the Russian economy (finally exiting the recession from the 4th quarter of 2016) . The recovery occurred after four consecutive years of decline, with a reduction in trade by UEEA countries from 1083 billion dollars (the region's absolute peak) in 2012 to 591 billion in 2016 (-45%), in exports from 417 to 242 billion dollars (-48%) and of imports from 666 to 349 billion dollars (-42%).
It should be kept in mind that the exchange rate of the dollar with local currencies affects the amount of values exchanged, expressed in dollars. Compared to the Russian ruble, the dollar appreciated by approximately 50% in the four-year period 2012-16 and then depreciated by approximately 20% in the first five months of 2017. Coming into more detail on Italy's commercial relations with the UEEA countries, the composition sectoral trade between the two parties in 2016 sees – in analogy with bilateral trade between the EU and EAEU – a strong concentration of trade in sectors where both parties enjoy comparative advantages. Italian imports are almost entirely represented by mineral products, energy and refined petroleum products (over 2016% of the total in 78) and by metals (15%). Exports, on the other hand, mainly consist of machinery (about 35% overall), especially mechanical (28%), followed by textile and clothing products (20%), metals (10%), chemical products (8%), of the agri-food sector (6%).
In terms of sectoral shares, Italy imports 26% of the total minerals and about 23% of imported refined petroleum products from UEEA countries. As a destination market, the UEEA countries purchase from Italy almost 3% of the mechanical machinery exported, 3,2% of the total in the "fashion" sector, 2,5% of various manufactured goods (largely represented by furniture and furnishing products, jewelery items) and 2% of electrical appliances. Out of the total of Italian trade, the UEEA countries covered a 2016% share of trade in 2,6 (3,3% of imports and 1,9% of exports), compared to 3,2% in 2015 (4,6. 2% of imports and 4,8% of exports) and 2013% in 6,7 (peak point of bilateral trade with 3,1% of imports and XNUMX% of exports).
In parallel with the multilateral trade dynamics of UEEA countries, the data for the first half of 1 saw a significant recovery in trade values with the region also on the Italian side. Compared to the first half of 2017, total trade – equal to 1 billion in the first half of 2016 – rose by 11,7%. Italian imports saw an increase of more than 1% y/y, and exports of 2017% y/y. In particular, imports and exports with Russia increased, the predominant country in trade with the EAEU with a share of around 15,9%, the former by 16% y/a and the latter by 15% y/y . The recovery in trade involved all UEEA countries with the exception of Kazakhstan, with respect to which imports fell by 85% yoy and exports, due to an extraordinary order in the metals sector in 20, fell by 24,5% y/y.
The recovery occurred after three years of negative growth in trade between Italy and UEEA countries, which went from 36,2 billion in 2013 to 20,1 billion euros in 2016 (-44%). In the three-year period 2013-16, exports fell from 12,2 to 8 billion euros (-34%) and imports from 24 to 12,2 billion euros (-49%). Thanks to the recovery of trade in the first half of 1, the share of trade flows from UEEA countries on the Italian total started to rise again, returning to 2017% of the total, compared to 2,7% recorded in 2,6, although still comparing with the maximum point of 2016% reached in 4,8. The Italian areas that export the most to the EAEU are the North-East and the North-West. Together, the two macro-divisions represented just under 2013% of Italian exports to the region in 2016, for a total value of 80 billion euros in 6,2. Lombardy, Emilia-Romagna and Veneto stand out in particular. Together in 2016 they exported just under 2016 billion euros to the Union, 5,1% of the total.
For propensity to export to the EAEU, Molise, Marche, Friuli-Venezia Giulia and Umbria excel: in each of these regions the weight of flows directed to the EAEU exceeded 2016% in 2, with an (extraordinary) peak of 28,8% of Molise. With the exception of Molise, whose figure in 2016 was in fact influenced by an extraordinary metal order directed to Kazakhstan, most of the regional sales in the EAEU were directed to Russia. The sectoral specialization of the Italian regions significantly influences the type of goods exported. In the North-East about one third of exports to the UEEA concern mechanical goods; following in importance the fashion system (21%), where clothing (14,4%) prevails over the leather supply chain (5,3%). In third place are the sectors of the home system (13,6%), with furniture in the lead (6,5%), followed by building products and materials (4,3%) and household appliances (2,8% ). Even in the North-West, mechanical exports prevail (29,7%), followed, at a distance, by the fashion system (14,5%).
However, this area also exports a lot of typically non-district goods to the Russian market, such as chemical products and, in part, electrical engineering. In the Centre, exports linked to the fashion system prevail, equal to about a third of the total. The only macro-division in which typically district sectors are not preponderant is the South, even if there is a good presence in the fashion system (14,2%) and in the agro-food sector, with a share of the total exported to the area, respectively 14,2% and 8,1%. Also at a territorial level, the first half of 1 opened with a decisive turnaround in trade which involved three out of four geographical divisions. The exported flows grew significantly in the North-West with 2017%, in the North-East with 26,5% and in the Center with 18,2%.
Only the South suffered a drop (-43%), however following the disappearance of the extraordinary items which in the two-year period 2015-16 had pushed metal exports from Molise and Abruzzo to Kazakhstan. Net of this item, Southern Italy also recorded an increase in sales (+36%), higher than that observed in the other areas. Crossing the data relating to geographical divisions with sectoral data allows us to observe a widespread improvement. The intensity of the growth of exports of mechanical products stands out in all territorial divisions. But many sectors show an increase in values: among them clothing, the leather supply chain, food and beverages, chemicals, automotive and pharmaceuticals.
The signs of recovery that emerged at the national level in 2017 are also confirmed in the industrial districts, among which the propensity to export in the EAEU countries and, in particular, in Russia is higher, albeit slightly, in the industrial districts (2,2 .1,9%) compared to the Italian average (1%). The first half of the year closed with an increase of 21%, equal to 195 million euros more than in the corresponding period of 2016. In the first half of 2017, the number of districts in growth on these markets (out of a total of 35 which in 50 had exported more than 2016 million euros to the EAEU). In comparison with the peaks reached by trade in 10, however, there is still considerable ground to recover: the gap is, in fact, still equal to 2013%, equal to about 32 million euros less. However, it is worth emphasizing how the leap that emerged in the first half of the year has already allowed 536 districts (among the top 9 for values exported to the EAEU) to improve the export levels of 50.
