Belarus and EU Economic Cooperation

April 22, 2016 18:09

Belarus and the European Union have a high potential for developing economic cooperation by means of  an increase in  mutual trade volume, capital, transfers  and investments outflow.  However, to make the best use of the exciting economic potential, Belarus needs to improve political relationships with the European Union.

According to the National Statistical Committee, in January-February 2012,  the volume of  foreign trade  between Belarus and the European Union increased by 87% to  $ 4.807 billion compared to last year. Exports to the EU increased by 2.6 times to $ 3.669 billion, while imports grew slightly,  by 0.3%, to $ 1.139 billion.

As a result, the positive trade balance for Belarus with EU countries increased by 8.5 times - from +299.2 million in January-February 2011 to + $ 2.53 billion in January-February 2012 .

The share of the EU in the structure of foreign trade in goods (turnover) in January-February 2012 increased to 33.8%, compared to 23.7% a year ago. The share of the EU in January and February of this year includes 50.2% of exports and 16.4% of imports of Belarusian goods.

As a result, the EU is the second (Russia is the first one) major trading partner of Belarus in terms of foreign trade turnover, which accounts for 48.1% of its foreign trade.

The main trade partners of Belarus in the EU in January-February 2012 were the Netherlands - 13.9% of Belarus’ foreign trade turnover, Latvia - 5.3%, Germany - 4.1%, Poland - 2.4%, Italy - 2.1%, Lithuania - 1.2% United Kingdom - 0.7%, Czech Republic - 0.6%, Belgium - 0.5%, Estonia - 0.4%.

However, Belarusian exports to the EU are based on oil exports, since the main commodities include: crude oil and petroleum products. In particular, the share of exports of oil and petroleum products to the EU in January-February 2012 amounted to 59.9%.

Exports of Belarusian oil products to the EU in January and February of the current  year is as follows: the Netherlands - $1.454 billion, Latvia - $ 308.339, Italy - $122.925 million, Poland - $ 38.890 million, Lithuania - $ 36.235 million, Estonia - $ 14.880 million, the United Kingdom - $4.496 million, Germany - $ 0.268 million.  In January-February 2012, Belarus exported 269.3 tons of crude oil to Germany, in the amount of $ 217.658 million.

Other export commodities are organic composite solvents and thinners, metallurgical products, potash and nitrogen fertilizers, lubricants, timber, tractors, insulated wires and cables, tires, ethylene polymers, and furniture.

A significant increase in supplies of organic composite solvents and thinners in the EU (USD 727.471 in January-February 2012) is in fact a hidden export of Belarusian oil products in order to minimize payments of  export duties on oil products to Russia. As a result, Russia’s budget suffers significant losses due to customs fraud on the Belarusian side.