“First of all, we want to export our goods to Serbia, and then to export them to European countries,” Tatjana Trofimova, the manager in charge of exports to the Russian company Almando Melado, stated.
Together with about 50 Russian businessmen, she came to Belgrade for the Serbian-Russian Business Forum, which was organized by the Serbian Chamber of Commerce and the Russian Export Center on October 4 and 5.
The company, which operates with its headquarters in Novocheboksarsk in the central part of Russia, currently exports textile products only to neighboring Kazakhstan and Estonia.
“We came to Serbia to find partners in the European Union (EU), maybe even to start production here,” says Trofimova.
First station Serbia, then the EU
A similar motive was brought to Serbia by Svetlana Sjenkjevic, the head of the export department at the company “Kreit” from St. Petersburg, which is engaged in the production of orthopedic aids and medical materials.
“We are here to see if we can move forward and distribute our products to Serbia, because Serbia is more of a European country and (from here) we can further distribute to any country that is close,” Svetlana Senkjevic told.
Her company, as she says, has existed for more than 20 years, employs more than 250 people, and this is the first time they are trying to market their products in Serbia. They learned about Serbia as an interesting new market from the Russian Export Center, which participated in the organization of a business forum in Belgrade.
Evgenij Lobashov, manager of the company Yandex, says that with the taxi service, that company is already present in Serbia. They are now hoping to expand services.
“We have come here to present solutions that help reduce logistics costs. We are looking for partners in Serbia among trade companies, retail stores, courier services. I believe that doing business in Serbia can be useful for expanding the business to the European market,” explains Lobashov.
Russian exports are burdened with sanctions
For the seventh year in a row, since 2014, the Russian economy has been facing the consequences of economic sanctions imposed by the EU due to the annexation of the Ukrainian peninsula of Crimea. The sanctions have led to the closure of the European market for Russian companies.
Russia, according to the report of the Atlantic Council from May 2021, records an annual growth of 0.3 percent, while the world average is 2.3 percent.
“Sanctions have halved foreign lending and foreign direct investment and possibly reduced Russia’s economic growth by 2.5-3 percent a year, which is about 50 billion dollars a year,” the Atlantic Council report said.
Sanctions, along with additional logistics difficulties caused by the COVID-19 pandemic, forced Russian companies to look for alternative routes, and Serbia, which has been an official candidate for EU membership since 2012, found itself on that path, but European integration is still not completed.
Precisely because of the cooperation with those two countries, Serbia is the target of criticism from the West.
Therefore, Serbia is not obliged to respect European foreign policy, which is one of the criticisms that Brussels directs at the expense of official Belgrade in its annual progress reports.
If Russian companies moved part of their production to Serbia, the goods could be placed on the European market from there.
In his statement at the opening of the forum on Monday, October 4, this was stated as an advantage by the Minister without portfolio in the Government of Serbia in charge of innovations and technological development, Nenad Popovic.
“Serbia can be the best hub for Russian investors for further exports to Europe, because everything that is produced in Serbia tomorrow can be placed on the European Union market without customs duties,” said Popovic.
Trade always finds its way, says Mikhail Ivanovich Akopov, director of the Moscow company “Zarubezh-Expo”, which provides services for organizing forums and fairs.
“We have a sanctions regime, we cannot deny that fact. But, still, politics is politics, and business is business,” says Akopov.
What sanctions have been applied to Russia?
Since 2014, the EU has imposed several types of sanctions on Russia. Economic sanctions are aimed at Russia’s financial, defense and energy sectors, as well as goods such as electronics, computers and telecommunications equipment.
Financial sanctions were imposed against 177 individuals and 48 companies. These sanctions include the freezing of their funds and assets on EU territory and a ban on European companies doing business with individuals and blacklisted companies.
The sanctions also mean that Russia cannot count on loans from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD).
Free trade of Serbia with both the EU and Russia
Serbia, which is a candidate country for EU membership, has free trade agreements with the European bloc based on the Stabilization and Association Agreement from 2008, but also with Russia, since 2000.
In July 2021, that agreement was replaced by the Agreement on Free Trade of Serbia with the member countries of the Eurasian Economic Union (EAEU), which implies duty-free import and export with Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia.
Official Brussels does not look favorably on that agreement, since Serbia strives for full membership in the EU, and therefore has the obligation to gradually harmonize its foreign and security policy with the European bloc, BiF reports.
