Russian and ASEAN leaders meet in Sochi

BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/21

Russia has been a full dialog partner with the Association of Southeast Asian Nations (ASEAN) since 1996. Last week, the third joint summit was held in Sochi. At the meeting was signed a new cooperation programme running through 2020 describing general measures for developing relations between the countries. The participant countries were particularly interested in joint projects in the energy sector, arms sales and infrastructure projects. Russia-ASEAN cooperation also strives to counterbalance China’s dominant role in the region.

Current economic cooperation between Russia and most ASEAN members is quite modest. Russian goods exports to ASEAN countries in 2015 totalled just $6 billion and imports $7 billion. ASEAN countries last year accounted for 2 % of Russian exports and 4 % of imports. Russia’s share of the total ASEAN exports and imports is less than 1 %. Arms sales are the exception as Russia and Vietnam are key partners. The Stockholm International Peace Research Institute (SIPRI) estimates that nearly all of Vietnam’s arms imports in recent years have come from Russia.

Russian officials said that there were also discussions with several countries on possible free-trade agreements with the Eurasian Economic Union. Russia launched free-trade talks with Vietnam already in 2009 and last year Vietnam became the first country to sign a free-trade agreement with the Eurasian Economic Union. That agreement should soon enter into force. The average duty level in bilateral trade should fall from a current average of around 10 % to 1–2 % within a decade. Russian firms are interested in e.g. getting Vietnam to gradually lower its high import duties on cars.

ASEAN countries’ share of Russian goods trade and Russia’s share of ASEAN goods trade (exports + imports) in 2015
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Source: IMF DOTS.

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