Russia’s foreign trade in raw materials and industrial goods: the impact of integration agreements and sanctions
Abstract
The aim of this study is to evaluate the impact of integration agreements and sanctions on Russia’s foreign trade in raw materials and industrial goods. Using international statistical data for 1995—2024 from UNCTAD, the World Bank, CEIC, UNIDO, CEPII, FAO, WTO, and GSDB, and applying a gravity model that controls for globalization effects, the study assesses the potential for stimulating Russia’s foreign trade through WTO membership and participation in trade and cooperation agreements under conditions of sanction constraints.
The results of the analysis demonstrate an overall negative impact of sanctions on Russia’s trade, with large-scale restrictive measures exerting the most pronounced effect, substantially reducing trade with Western countries that imposed sanctions in 2022—2024. The influence of investment agreements on Russia’s foreign trade is found to be invariant. Although advanced (deep) trade agreements, in contrast to shallow ones, have a generally positive long-term effect on trade, they stimulate expansion in industrial goods to a greater extent than in raw materials. The positive impact of both advanced and shallow trade agreements, as well as WTO membership, on Russia’s foreign trade, particularly in industrial goods, shows a strengthening trend over time. In addition, the overall growth of international trade in 2022—2024 contributed to the expansion of Russia’s trade with WTO member countries, primarily in raw materials. Comparative analysis indicates that the reorientation of trade towards WTO members, together with the recovery of global trade, helped mitigate the negative effects of large-scale sanctions imposed by Western countries, while Russia’s advanced and shallow trade agreements played a supplementary stimulatory role in this process. These findings demonstrate the necessity of expanding Russia’s integration frameworks with ‘friendly’ countries in the context of intensifying sanctions pressure from Western states.