Structural Shifts in the Foreign Trade of Border Regions of Russia and Belarus in the Context of Political and Economic Challenges of the 2010s

Abstract

The state of foreign trade in the border regions of Russia and Belarus is defined both by the inherited (established in the USSR) functions of the regions in trade and specialization of economies and by the consequences of contemporary political and economic events. This paper attempts to identify changes in the foreign trade of the border regions of Russia and Belarus in the context of transformation processes related to Eurasian integration, the economic crisis, and the introduction of sanctions and antisanctions. It is found that the dynamics of overall foreign trade turnover has no correlation with integration processes. The possible trade effects of the EAEU when assessing only the volume indicator are unnoticeable against the backdrop of established functions of the regions in foreign trade and specialization of the regional industrial complexes. The greatest shifts in the inherited foreign trade functions of the border regions are characteristic of Pskov oblast, where the role of the export component is strengthened and the share of imports is decreasing with a general reduction in trade turnover. For Pskov oblast, this is leading not only to improvement in the balance of foreign trade relations, but also to consolidation of the asymmetry of cross-border interaction (exports of raw materials and products with low added value and imports of finished products). It was revealed that in the commodity structure of the foreign trade of border regions, most positions in exports and imports are determined by old ties preserved from Soviet times or restored in the post-Soviet period. Such contacts, on the one hand, are stable in terms of supply directions, and on the other hand, volatile in volume, because they are highly prone to fluctuations in global commodity markets and the influence of the financial solvency of buyers. New, post-Soviet enterprises, even in traditional export commodity groups, are either more flexible (an example is the Belarusian food enterprises that responded to new niches in the Russian market) or more diversified in sales geography (not as strongly oriented toward Russia).