RUSSIA’S TRADE SURPLUS FALLS, DECLINE IN CIS TRADE CONTINUES.

Data recently released by Russia’s Ministry of Foreign Trade and Economic Relations shows that, for the first three quarters of 1997, Russia’s trade surplus is down slightly from the same period in 1996. (Russian agencies, November 25) Still, Russia’s trade surplus at the end of September stood at a healthy $25.1 billion. The Foreign Trade Ministry’s data include information about "official" trade flows only, and therefore do not reflect the activities of various "unofficial" traders.

While Russia’s imports were reported to have grown by 1.6 percent (to $35.9 billion) during the first three quarters of 1997, the value of exports fell by 2.9 percent to $61 billion. Most of this decline was due to a continuing downward trend in Russian exports to the CIS countries. Russia’s combined trade turnover with the "near abroad" fell by 9.4 percent. According to the Ministry, Russian exports were limited first and foremost by protectionist restrictions in Russia’s main trading partners, and by the fact that relative prices for energy products have been declining for much of the year.

If these explanations are correct, then it would follow that Russia could realize major gains from the entry into the World Trade Organization of other CIS countries, since this would remove many of the protectionist barriers facing Russian exporters. However, Russian policy vis-a-vis other CIS countries’ applications for WTO membership has thus far been characterized by an effort to harmonize them with the terms of Russia’s own application. This policy is probably being pursued with the goal of improving Russia’s bargaining position vis-a-vis the WTO. The latest trade figures suggest that the costs of attempting to orchestrate this harmonization, in the form higher interim barriers to CIS trade, may be steeper than Russia had thought.

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