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Up in the Air: EU, Japan Won’t Ban Exports to Russia

Updated: May 30, 2023

The European Union and Japan, two of the United States' allies, have opposed the country's recent proposal to outlaw all exports to Russia.

The strategy, which aimed to escalate the economic war with Moscow, would have changed how sanctions against that country are applied. The export restriction would forbid any business with Russia absent a clear exception, as opposed to just blacklisting particular goods, firms or people.

Despite the increasing hostility between Russia and the West, particularly in the wake of the invasion of Ukraine, this idea was still put out. Russia has been able to withstand the sanctions that the US and its allies have used to try and isolate it and destroy its economy.

On the other hand, the G7 nations have continued to do business with Moscow. The G7 nations exported $66 billion to Russia over the previous 14 months, according to Trade Data Monitor.

This clearly shows that members of the G7 are not in favour of a total export embargo, but they are willing to sign a statement asking for tougher penalties for individuals and organisations that try to circumvent sanctions on Moscow. Japan and the European Union have opposed the plan and refused to ratify it.

It is hardly unexpected that the EU and Japan decided against following the US in forbidding shipments to Russia. Both nations have close economic ties to Moscow, so a total export restriction would have a negative impact on their economies.

Russia's greatest economic partner, for instance, is the EU, whose overall commerce with Russia exceeded $400 billion in 2019. In a similar vein, Japan has been working to strengthen its economic ties with Russia and build a new economic zone in the Russian Far East.

Other groups have also criticised the proposed trade embargo. The Kremlin has vowed to revoke a grain export pact that was negotiated by the UN and Turkey in July 2022 and permitted 23 million tonnes of food products to leave Ukraine's heavily mined Black Sea ports in response to the prohibition. The economy of Ukraine, which has already been severely harmed by the ongoing conflict in the Donbass region, would be significantly impacted by this.

The difficulty the West faces in imposing sanctions on Moscow is highlighted by the EU and Japan's decision to reject the US request to limit shipments to Russia. While the G7 nations concur that it is necessary to take action against people and companies that try to dodge sanctions, a complete export embargo is viewed as being too extreme and having serious economic repercussions.

Determining how the West will keep up the pressure on Moscow and whether sanctions will be successful in altering Russia's behaviour in Ukraine are therefore up in the air.


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