Russia-ASEAN Relations: New Directions

3. Current State of Russia–ASEAN: Trade and Economic Relations

22 Vyacheslav Amirov 3 Current State of Russia–ASEAN Trade and Economic Relations Vyacheslav Amirov GENERAL ATMOSPHERE OF RELATIONS Since the first seminar on ASEAN–Russia relations in Singapore in March 2005, we have seen some new political developments: the First ASEAN– Russia Summit was held in December 2005, the Comprehensive Programme of Action to Promote Cooperation between the ASEAN and the Russian Federation in 2005–15 and the Agreement on Economic and Development Cooperation were signed in Malaysia in December 2005.1 In 2006 a ten-year anniversary of Russia–ASEAN dialogue was celebrated as well as a thirty-year anniversary of Russia/Soviet Union diplomatic relations with the Republic of Philippines — the country-in-charge of the ASEAN– Russia dialogue this year.2 According to the statement made by Foreign Minister Lavrov of the Russian Federation in Malaysia in July 2006, both sides are working for an implementation of the Agreement on Economic and Development Cooperation between Russia and ASEAN. The question is whether all those agreements by themselves can influence greatly or will boost development of bilateral economic and trade ties? As the First ASEAN–Russia Summit of 2005 has shown, it is easier to improve further a rather developed political dialogue than to achieve a real breakthrough in economic cooperation, particularly when there is not much 03 RUS_ASEAN Relations Ch 3 10/10/07, 12:11 PM 22 Russia–ASEAN Trade and Economic Relations 23 history in Russia–ASEAN economic relations, except for Russia–Vietnam relations during the Soviet times and, to some extent, Russia/Soviet Union– Singapore bilateral economic ties. Russia–ASEAN economic ties are still not big news in media coverage both in Russia and ASEAN member-countries. On the other hand, Russia’s eagerness to be part of East Asia economically cannot be achieved without development of comprehensive economic ties with ASEAN as a group as well as with its major individual members (ASEAN-6). In general, Russia’s economic relations with ASEAN represent primarily a part of Russia’s involvement into a forming united East Asia economy under the process of regional economic integration, but not a separate issue. That is why Russia’s economic relations with ASEAN as a group are still waiting for self-establishment. It is clear that much has to be done before Russia–ASEAN economic ties will accumulate its own value for both sides and eventually become well established. DEVELOPMENT OF BILATERAL TRADE BETWEEN RUSSIA AND ASEAN-6 It is quite natural that countries of ASEAN-6 are the main trade partners of Russia among ASEAN members, and trade between them and Russia is continuing to grow. Russia’s trade with Thailand is the most balanced (the country occupies second place both in Russia’s exports and imports) among other major ASEAN members, and that is why it has become the biggest trading partner of Russia in ASEAN. Vietnam has started to regain its place in Russia’s trade after more than a decade of decline or stagnation. In 2000–05, overall trade between Russia and ASEAN-6 increased almost three times. Despite that, the volume of their bilateral trade is relatively small (see Table 3.1). It is interesting to compare the Russian and New Zealand trade volumes with major ASEAN countries, as New Zealand is the smallest non-Asian participant in the East Asian Summit. A turnover of New Zealand trade with ASEAN-5 is more or less the same that Russia has with ASEAN-6 (2005), but New Zealand trade with the outside world was (in 2005) seven times less compared to that of Russia’s. It means that ASEAN’s share in New Zealand’s overall trade is seven times higher than ASEAN’s share in Russia’s trade with the outside world. Serious constraint for trade development between Russia and ASEAN members is represented by the fact that their two-way trade is still limited to only a few commodities: 03 RUS_ASEAN Relations Ch 3 10/10/07, 12:11 PM 23 24 Vyacheslav Amirov Russia–Vietnam: main items of exports — ferrous metals, mineral fuels, machinery and equipment. Main items of imports — agricultural products, footwear. Russia–Indonesia: main items of exports — fertilizers, chemical products, grain. Main items of imports — natural oils and related products, coffee. Russia–Malaysia: main items of exports — fertilizers, ferrous metals and metal products. Main items of imports — electronic durable goods, other Table 3.1 Russia’s...