Trade in Services: New Features in Economic Interaction of Russia and the European Union

DOI: 10.20542/0131-2227-2019-63-3-49-58

A. Nevskaya (,
Primakov Institute of World Economy and International Relations of the Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation

Acknowledgments. The article was prepared in IMEMO within the grant from the President of the Russian Federation for state support of young Russian scientists (project MK-6258.2018.6)“Restructuring of economic ties between Russia and the European Union: factors and prospects”.

Abstract. The article deals with trade in services between Russia and the European Union. The emphasis is put on the export of services from Russia to the EU as a potential source of transformation of the structure of trade relations between the parties, which are now lined up with a significant imbalance, exacerbated by sanctions and the major political crisis in the Russia-EU relations which started at 2014. The author analyzes two hypotheses: the possibility to develop traditional export-oriented service industries in Russia – such as transportation and construction, – and service industries based on knowledge and new technologies. In the first case, the competitive advantage of Russian companies is the geographical position of the country between China and Europe, which, coupled with a developed IT field, allows Russian companies offering competitive logistics solutions. In the second case, the advantage is again the developed IT field in Russia and the market niches in the EU which are less occupied allowing easier entrance for the new firms. The research method is comparison of current exports of services from Russia to the EU in terms of industries and geography of supplies with the EU market demand for services. The author takes into account the trends in the economic environment in the region. The emphasis is put on the digitalization and new communication technologies. The general conclusion is that the services sector can become one of the drivers of the restructuring of economic ties between Russia and the European Union, although Russian exporters should adjust their supply to the growing demand in the European markets for knowledge-intensive services. The focus should be made on industries that combine both the existing competitive advantages and the new competencies of Russian companies which are efficient in the emerging markets of new types of services. Among them there are intermediary activities in e-commerce (the development of national marketplaces), as well as digital types of telecommunications.

Keywords: services, Russia, European Union, intellectual services, service exports, digitalization, digital platforms


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For citation:
Nevskaya A. Trade in Services: New Features in Economic Interaction of Russia and the European Union. World Eonomy and International Relations, 2019, vol. 63, no. 3, pp. 49-58.

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