Book Description

On June 28th, the European Council took a decision to prolong the economic sanctions imposed on Russia until 31 January 2018. These sanctions: 1) limit access to EU capital markets for major Russian state-owned financial institutions and energy and defence companies, 2) ban both the export and import of arms, 3) ban the export of dual-use goods for military use to Russia and 4) curtail Russia's access to certain sensitive technologies and services that can be used for oil production and exploration. As expected, Russia has mirrored the EU's decision by imposing counter-sanctions of its own. These involve introducing travel bans against a blacklist of 89 EU politicians and military leaders as well as blocking imports of selected categories of agro-food products from the EU and other countries that had previously imposed economic sanctions on Russia (e.g. the US, Australia and Japan). More specifically, the economic part of the counter-sanctions imposed by Russia focused on five categories of western agro-food products (namely fruit, vegetables, meat, fish and dairy products), which were originally adopted in August 2014 for a period of two years. But Russia recently re-imposed these counter-sanctions in response to the latest extension of EU sanctions decided by the Council in June. This Commentary is a follow-up to Gros and Mustilli (2016), drawing on more recent data on trade flows and analysing more closely the impact on the agro-food export categories, which is the target of Russian counter-sanctions.