Comparative advantage and characteristics of Russia's trade with the European Union

Abstract

The paper analyzes the development in Russian-European Union trade in the transition.After a significant adjustment of the trade data, and a short overview of the general development in Russian trade, the author analyses the trade dynamics and the commodity composition of exports and imports, using 3 and 5-digit Standard International Trade Classification.The outcome of the analysis shows that although Russian exports since 1992 have increased in terms of variety, the development in manufacturing exports is disappointing, especially with regard to light manufacturing and consumer goods.And not surprisingly Russia reveals a comparative advantage in minerals and metals.The level of intra-industry trade between Russia and the EU remains low and there is no sign of an increase; the opposite pattern from that of the Central European countries.On the whole this study shows that there are no clear signs of changes to the structure of foreign trade between Russia and the EU, to some extent the result of the lack of restructuring in the Russian economy. Keywords: Russia, European Union, foreign trade, revealed comparative advantage, intra-industry trade