By Michael Barantschik and Chris Devonshire-Ellis
The annual G20 summit has been underway over the weekend and has been held in New Delhi, India. In this comprehensive article we provide a demographic background to each of the invited members, including the African Union, together with analysis of the main talking points from the Summit Declaration.
THE G20 MEMBERS
The African Union
GDP: US$3 trillion
GDP Per Capita (PPP): US$5,872
2023 Real GDP Growth: 3.7%
Population: 1.3 billion
The African Union was invited; and has taken up an offer to become a permanent member of the G20, making it the second regional bloc to join after the European Union. It adds momentum to Indian Prime Minister Narendra Modi’s drive to give a greater voice to the Global South. Modi shook hands with the current AU chair, Comoros President Azali Assoumani, and embraced him warmly before inviting him to sit at the table.
The African Union includes all 55 countries within Continental Africa, and was launched in 2002.
The AU’s secretariat, the African Union Commission, is based in Addis Ababa. The largest city in the AU is Lagos, Nigeria, while the largest urban agglomeration is Cairo, Egypt. The African Union has more than 1.3 billion people and an area of around 30 million km2 (12 million sq mi) and includes world landmarks, such as the Sahara and the Nile. The primary working languages are Arabic, English, French, Portuguese, Spanish, and Swahili. Within the African Union, there are official bodies, such as the Peace and Security Council and the Pan-African Parliament.
It is also responsible for organizing the African Continental Free Trade Agreement, https://au-afcfta.org/ (AfCFTA) which includes 54 of the 55 nations and has introduced procedures to eliminate cross-border tariffs on 95% of African traded goods, on a phased-in basis ranging from three to twelve years depending on the product type and regional specifics. AfCFTA will have the effect of liberalizing pan African trade and allow continental sourcing activities while positioning the coastal nations as potential trade and export-manufacturing hubs. This will allow Africa to emerge as a cost-competitive alternative to Asia over the coming two-three decades, as it remains a relatively low-cost region while Asia moves up the added-value and economic supply chains.
Argentina
GDP: US$641.1 billion
GDP Per Capita (PPP): US$23,170
2023 Real GDP Growth: 0.2%
Population: 46.7 million
Argentina is a resource-rich country, which gives it great potential for further development.
It holds the world’s second-largest shale gas reserves and the fourth-largest shale oil reserves.
Additionally, it ranks third in proven lithium reserves, behind only Chile and Australia, with an astonishing 70% of these reserves yet to be utilized.
Argentina is a member of two major trade groups – the Association for Latin American Integration (ALADI) and the Southern Common Market (MERCOSUR).
ALADI was founded in 1980 with the objective of creating a common market in Latin America. Members include Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela, Cuba, Panama, and Nicaragua.
MERCOSUR’s full members include Argentina, Brazil, Paraguay, and Uruguay, with Venezuela currently suspended. Associate members include Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. MERCOSUR has established trade agreements with several external partners, including the Southern African Customs Union, the European Union, Israel, Egypt, and India.
As part of the MERCOSUR and ALALDI, Brazil is Argentina’s leading trade partner, followed by China, the United States, India, Chile, and Germany. The country’s major exports are maize, oil cake, soybean oil and soya beans, motor vehicles, wheat, and meslin. On the other hand, its most imported items include auto parts and accessories, petroleum gas, soya beans, and other gaseous hydrocarbons.
In January 2024, Argentina is set to join the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, it will be joined by Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt.
Australia
GDP: US$1.71 trillion
GDP Per Capita (PPP) US$55,660
2023 Real GDP Growth: 1.6%
Population: 26.8 million
Australia is known for its abundant natural resources, which include coal, copper, iron ore, gold, natural gas, uranium, and renewable energy sources. This has led to the country becoming a world leader in mineral and Liquefied Natural Gas (LNG) extraction. Its exports focus mainly on fuel and mining commodities, as well as agricultural production and meat processing. Australia’s largest export markets are China, Japan, South Korea, The US, India, New Zealand, and Taiwan, and its top exported products include Iron ore, Coal, Natural Gas, Gold, and Aluminium ores. It is also one of the world’s biggest exporters of beef and wheat.
Australia is a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam. Australia exports approximately 76% of its goods and services to APEC economies.
Australia initiated the creation of the Pacer Plus group (Cook Islands, Kiribati, New Zealand, Niue, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, and Nauru). PACER Plus is a regional trade agreement designed to support Pacific island countries and provide commercial benefits to Australian businesses.
Australia is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) together with Australia, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Two other countries, Brunei and Chile, have signed but have yet to ratify the agreement.
It is also a member of the Regional Comprehensive Economic Partnership (RCEP), which is a free trade area in Eastern Asia and Australia. RCEP is considered one of the biggest free trade agreements worldwide and is responsible for around one-third of the global economic output. Its members include Australia, Brunei Darussalam, Cambodia, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam.
Additionally, Australia has 13 individual Free Trade Agreements (FTAs) with the following countries: New Zealand, Singapore, USA, Thailand, Chile, Malaysia, Korea, Japan, China, Peru, Indonesia, India, and the UK.
Brazil
GDP US$2.08 trillion
GDP Per Capita (PPP) US$15,600
2023 Real GDP Growth: 0.9%
Population 218.9 million
Brazil is the world’s largest producer and exporter of soybeans, coffee, and sugar. The country uses vast areas of the deforested Amazon rainforest for agriculture, which has also led to it becoming the world’s largest wood pulp exporter.
Brazil is part of the MERCOSUR trade group. MERCOSUR’s full members include Argentina, Brazil, Paraguay, and Uruguay, with Venezuela currently suspended. Associate members include Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. MERCOSUR has established trade agreements with several external partners, including the Southern African Customs Union, the European Union, Israel, Egypt, and India.
The most exported goods from Brazil are Soybeans, Crude Petroleum, Iron Ore, Soybean Meal, Refined Petroleum, and Raw Sugar. The primary destinations for Brazilian exports are China, the United States, Argentina, Singapore, and the Netherlands.
Brazil has been negotiating a free trade agreement with the EU as a MERCOSUR full member. In June 2019, after two decades of on-and-off negotiations, the European Union and Mercosur reached an agreement to dramatically expand economic cooperation between the two blocs. This unprecedented free trade agreement would not only eliminate over 90 percent of tariffs on traded goods but would also open the door for more extensive foreign direct investment and economic integration, as well as potentially bolster labor and environmental standards. Yet, over four years later, this agreement remains unratified due to fears on the European side that it will intensify environmental and human rights abuse in Brazil.
Brazil is a member of the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt are set to join the BRICS bloc.
Canada
GDP: US$2.09 trillion
GDP Per Capita (PPP): US$51,690
2023 Real GDP Growth: 1.5%
Population: 39 million
Canada is one of the world’s largest natural gas producers, ranking fifth globally. The United States, Canada’s largest trading partner, receives the majority of all Canadian exports, accounting for around 75-77% of the country’s total exports. China comes in second, followed by the United Kingdom and Japan.
Canada’s top exports for 2023 include Crude petroleum, motor vehicles and parts, refined petroleum, intermediate metal products, and passenger cars and trucks. The nation is also ranked among the top countries globally in wheat export.
Canada is part of a free trade agreement with the United States and Mexico (USMCA). USMCA is a modern trade agreement that aims to promote fairer trade and more accessible markets while also reinforcing labor and environmental protections. The USMCA includes commitments on customs inspections, intellectual property, and digital trade.
It is also a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Australia, Brunei Darussalam, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam.
Canada is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) together with Australia, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Two other countries, Brunei and Chile, have signed but have yet to ratify the agreement.
It is connected to trade with the EU through the CETA agreement and has FTAs with Chile, Colombia, Costa Rica, Honduras, Israel, Jordan, Panama, Peru, Korea, Ukraine, and the UK.
China
GDP: US$19.37 trillion
GDP Per Capita (PPP): US$19,160
2023 Real GDP Growth: 5.2%
Population: 1.46 billion
China holds the position of the world’s largest exporter, commanding a dominant presence in international trade due to its combination of low-cost labor, immense manufacturing capabilities, and a diverse range of exportable products. China serves as the primary trading partner for over 120 countries worldwide. Its most significant trade relationships are with the US and Hong Kong; thereby, it is also the top importer of huge countries like Russia and India. The global economy is highly dependent on imports from China, and China is benefiting enormously from this reliance. Its primary export categories include Mechanical & electrical products, Machinery & Transport Equipment, and high-tech products.
Indeed, given its status as a major global producer, China also has a significant dependence on the import of mechanical and electrical products and essential natural resources such as fossil fuels and iron ore. Its closer tights with Russia and the Belt and Road infrastructure initiative it has undertaken is poised to facilitate the acquisition of these crucial goods more conveniently in the foreseeable future.
China has entered into more than 100 bilateral investment agreements with various countries and economies, including Canada, France, Germany, Italy, Japan, South Korea, Spain, Thailand, and the United Kingdom. For the full list, click here.
Apart from bilateral investment agreements, China has also established 17 Free Trade Agreements (FTAs) with its trade and investment partners and is negotiating an additional eight FTAs. The FTA partners of China are ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland, Switzerland, Maldives, Mauritius, Georgia, South Korea, Australia, Cambodia, Hong Kong, and Macao.
In November 2020, China and 14 other countries signed the Regional Comprehensive Economic Partnership (RCEP), which is a free trade area in Eastern Asia and Australia. RCEP is considered one of the biggest free trade agreements worldwide and is responsible for around one-third of the global economic output. Its members include Australia, Brunei Darussalam, Cambodia, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam.
China is a member of the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt are set to join the BRICS bloc.
China is also part of the APEC countries along with Australia, Brunei Darussalam, Canada, Chile, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam.
Lastly, it is a full member of the Shanghai Cooperation Organization. The SCO is an intergovernmental organization that includes India, Iran, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan, and Uzbekistan as full member states. It also has several countries in different statuses as SCO dialogue partners and observers, such as Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Cambodia, Egypt, Kuwait, Maldives, Mongolia, Myanmar, Nepal, Saudi Arabia, Sri Lanka, Turkey, Turkmenistan, Qatar and the United Arab Emirates.
The European Union
GDP: US$17.82 trillion
GDP Per Capita (PPP): US$45,712
2023 Real GDP Growth: 0.7%
Population: 448.1 million
The European Union was formed by the Maastricht Treaty on February 7, 1992, with policies aimed at ensuring the free movement of people, goods, services, and capital within the internal market.
The EU is the largest trading bloc globally and the leading trader of manufactured goods and services. It also ranks first in both inbound and outbound international investments.
The European Union consists of 27 countries: Austria, Belgium, Bulgaria, Croatia, the Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.
The European Union’s biggest trading partners are the USA, China, the UK, Switzerland, and Russia. The EU imports most from China and exports most to the US.
The EU has established agreements with and is the top trading partner for more than 80 countries across the globe. Additionally, a significant number of new agreements, particularly with West African nations and the MERCOSUR group, are either being adopted or ratified. It is currently negotiating updates to its existing agreements with Australia, China, India, Indonesia, and the Philippines. For the complete list, click here.
France
GDP: US$2.92 trillion
GDP Per Capita (PPP): US$51,660
2023 Real GDP Growth: 0.7%
Population: 66.2 million
France is the seventh-largest economy in the world and the second-largest in Europe.
The country is home to numerous international corporate giants and occupies prominent positions in various industries such as energy, agriculture, aerospace, pharmaceuticals, and many more. This broad range of economic strengths ensures that the country is not overly reliant on any specific sector or industry.
France exports 55% of its goods to countries within the European Union, with Germany, Spain, Italy, and Belgium being its main trade partners. The United States, the United Kingdom, and China are France’s primary customers outside the EU. France mainly trades goods such as machinery, including computers, pharmaceuticals, aircrafts, vehicles, hydrocarbons, and food products (mostly wine), for both export and import.
As a member of the European Union, France benefits from access to an extensive network of trade agreements and alliances, which makes the country highly interconnected in global trade. For a full European Union trade agreements and alliances list, click here.
Germany
GDP: US$4.31 trillion
GDP Per Capita (PPP): US$59,630
2023 Real GDP Growth: -0.1%
Population: 88.8 million
Germany is one of the most developed industrial nations worldwide, trailing closely behind the United States and Japan. It is the largest and most important market in the European Union. Its most vital industries are mechanical engineering and the automotive, chemical, and electrical industries, collectively forming the foundation of the nation’s industrial strength.
Germany holds its status as Europe’s biggest automotive market and the leading production and sales market in the electronics industry. Accounting for around one-fourth of all passenger cars manufactured, and renowned for its unmatched density of R&D institutes, world-leading manufacturers, and suppliers of electrical and electronic materials, components, and equipment.
Germany is by far the world’s largest exporter of automobiles. Other top products for Germany include machinery, chemicals, electronic equipment, and pharmaceuticals. All of these products are most exported, as well as imported.
As a member of the European Union, Germany benefits from access to an extensive network of trade agreements and alliances, which makes the country highly interconnected in global trade. For a full European Union trade agreements and alliances list, click here.
India
GDP: US$3.74 trillion
GDP Per Capita (PPP) US$7,130
2023 Real GDP Growth: 5.9%
Population: 1.43 billion
The agricultural sector is a crucial part of India’s economy, employing around 45% of the population. It also plays a significant role in India’s trade, with the country being the largest exporter of rice and one of the biggest producers and exporters of sugar globally. India ranks 3rd in the world for oil consumption, ranks 20th in oil production, and has only about 0.3% of global oil reserves. This has led India to import 96% of its oil for consumption.
India has been recording trade deficits for several decades due mainly to the strong growth in import prices of mineral fuels, oils and waxes, bituminous substances, pearls, precious and semi-precious stones, and jewellery.
The country’s top exports include refined petroleum, jewellery, automobiles, bio-chemicals, and pharmaceuticals. Its most significant trading partners are the US, China, the UAE, Russia, and Saudi Arabia. Exporting most to the US and importing most from China.
India has signed FTAs with several countries and groups, including the UAE, Australia, Mauritius, Sri Lanka, Singapore, Japan, South Korea, and the ASEAN group. The government also has PTAs with the MERCOSUR group, Afghanistan, and Chile.
Additionally, India has an African trade agreement with a large number of countries, including Angola, Cameroon, Ghana, Mauritius, Nigeria, Senegal, Swaziland, Tanzania, Zaire, Zimbabwe, Botswana, Cote D Ivory, Liberia, Mozambique, Rwanda, South Africa, Seychelles, Uganda, and Zambia.
India is also a member of the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt are set to join the BRICS bloc.
Lastly, India belongs to the SAARC countries, including Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka.
Indonesia
GDP: US$1.39 trillion
GDP Per Capita (PPP): US$12,680
2023 Real GDP Growth: 5%
Population: 285 million
Indonesia is the world’s largest nickel producer, with 21 million metric tons in reserves. The country is a major exporter of crude petroleum and natural gas. In addition, Indonesia is one of the world’s leading suppliers of rubber, coffee, cocoa, and palm oil.
Indonesia is one of the five founding fathers of ASEAN, together with Malaysia, the Philippines, Singapore, and Thailand. Brunei Darussalam, Vietnam, Lao PDR, Myanmar, and Cambodia are also members, which joined later down the road. ASEAN’s headquarters are located in Jakarta, the capital of Indonesia.
Indonesia is also a member of APEC, which consists of Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, United States, and Vietnam.
Another important organization that Indonesia belongs to is the Regional Comprehensive Economic Partnership (RCEP), which is a free trade area in Eastern Asia and Australia. RCEP is considered one of the biggest free trade agreements worldwide and is responsible for around one-third of the global economic output. Its members include Australia, Brunei Darussalam, Cambodia, China, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam.
In addition, Indonesia also has PTAs with Australia, China, Hong Kong, India, Japan, Korea, and New Zealand.
Italy
GDP: US$2.17 trillion
GDP Per Capita (PPP): US$46,450
2023 Real GDP Growth: 0.7%
Population: 60.6 million
Italy contains very few mineral resources, especially metalliferous ones. It has low oil and gas reserves and therefore depends a lot on the import of these goods, with mineral fuels and oils being by far its most imported product.
Ironically, one of its main exports is products of iron and steel. In 2022, it came in at number two in the list of exports that generated the biggest trade surpluses, accounting for an excess of US$13.9 billion. This is primarily due to its highly developed manufacturing industry.
Italy’s primary exported goods include machinery and equipment, transport, metal products, textiles, clothing, leather and accessories. Its biggest trading partner is Germany, followed by the United States, France, Spain, and Switzerland.
As a member of the European Union, Italy benefits from access to an extensive network of trade agreements and alliances, which makes the country highly interconnected in global trade. For a full European Union trade agreements and alliances list, click here.
Japan
GDP: US$4.41 trillion
GDP Per Capita (PPP): US$44,570
2023 Real GDP Growth: 1.3%
Population: 126.1 million
Japan is the world’s third-largest manufacturing country, producing a wide range of products, including automobiles, electronics, machinery, and equipment. It accounts for almost 8% of global manufacturing output. It is a crucial contributor to the country’s economy and the global market.
Japan is a major player in global trade, with foreign trade accounting for 37% of its GDP. Its top exports are motor vehicles, machinery, and electrical and electronic equipment. Japan’s main trading partners are China, the United States, South Korea, Hong Kong, and Thailand.
Several notable trade agreements involving Japan have been signed in recent years.
In 2018, Japan signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Australia, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Two other countries, Brunei and Chile, have signed but have yet to ratify the agreement.
Additionally, Japan has 16 bilateral economic partnership agreements (EPAs) with countries such as the United States, the United Kingdom, and Australia, as well as two additional EPAs with the European Union and the Association of Southeast Asian Nations (ASEAN).
One of Japan’s most significant trade agreements is the Japan and European Union (EU) EPA, which has been in effect since February 2019.
Another major group it forms part of is the Regional Comprehensive Economic Partnership (RCEP), which is a free trade area in Eastern Asia and Australia. RCEP is considered one of the biggest free trade agreements worldwide and is responsible for around one-third of the global economic output. Its members include Australia, Brunei Darussalam, Cambodia, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam.
Finally, it is a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam.
Mexico
GDP: US$1.66 trillion
GDP Per Capita (PPP): US$19,740
2023 Real GDP Growth: 1.8%
Population: 134.8 million
Mexico is the largest producer and fourth largest exporter of silver, with nearly 200 million ounces of silver produced in 2022. Its main exports are vehicles, computers, oil and petroleum products, minerals, and food and beverages.
Mexico is part of a free trade agreement with the United States and Canada (USMCA). USMCA is a modern trade agreement that aims to promote fairer trade and more accessible markets while also reinforcing labor and environmental protections. The USMCA includes commitments on customs inspections, intellectual property, and digital trade.
The United States holds a crucial position as Mexico’s primary trading partner, with U.S.-based companies contributing more than half of Mexico’s foreign investment. Additionally, the United States is responsible for about 40-50% of Mexico’s imports and receives almost 80% of its exports.
Mexico is a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam.
The country has established free trade agreements with the European Union, the European Free Trade Area, Japan, and Israel.
It is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) together with Australia, Japan, Malaysia, Canada, New Zealand, Peru, Singapore, and Vietnam. Two other countries, Brunei and Chile, have signed but have yet to ratify the agreement.
It is also the country that brought together Costa Rica, Nicaragua, El Salvador, Guatemala, and Honduras to form the Central America-Mexico Free Trade Agreement.
Additionally, Mexico is a member of the Pacific Alliance, a trade bloc established in 2011 by Mexico, Chile, Colombia, and Peru.
Russia
GDP: US$2.06 trillion
GDP Per Capita (PPP): US$32,030
2023 Real GDP Growth: 0.7%
Population: 146.1 million
Russia’s global economic significance stems from its role as a major exporter of energy and grains. It is the world’s largest wheat exporter, has the largest natural gas reserves, and is the second-largest gas exporter.
Prior to the Ukraine conflict, Russia was one of the European Union’s largest trading partners for both imports and exports. Leading partners were The Netherlands, Germany, and Italy.
EU trade with Russia has declined significantly, with European imports dropping from 9.6% in Feb 2022 to 1.7% in June 2023. The dependency of the EU on energy imports from Russia has also seen a noticeable decline. The shares of fossil fuels such as coal, natural gas, and petroleum oil imported from Russia have substantially decreased. If we compare the statistics of the second quarter of 2021 with that of the second quarter of 2023, we can observe a significant decline in the import of petroleum (from 29.2% in 2021 to 2.3% in 2023), natural gas (from 38.5% to 12.9%), and coal (from 45.0% to 0%).
Interestingly, despite the EU and G7 sanctions, the volume of Russian oil exports has increased. This is because Russia has diverted its oil flows from Europe to China, India, Turkey, and new trading partners in Africa and the Middle East. However, the larger volume of oil is being offered at a significant discount.
Redirecting its gas export has proved more challenging, as it requires extensive infrastructure to export to more distant destinations. With the closure of pipelines to Europe, Russia was only able to partially compensate for the loss by increasing pipeline flows to China and selling more LNG to the global market. Consequently, the total Russian gas exports in 2022 were about 25% lower than those in 2021.
Russia is a founding member of the Eurasian Economic Union (EAEU) and is party to EAEU trade agreements with Vietnam, Iran, and Serbia. In 2018, the EAEU signed a trade cooperation agreement with China, and it is in trade negotiations with several nations, including India, Israel, Egypt, Morocco, Tunisia, Algeria, Indonesia, Iran, the UAE, Thailand, and the countries of the Southern African Development Community.
Russia is a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Singapore, Taiwan, Thailand, the US, and Vietnam.
Russia is also a member of the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt are set to join the BRICS bloc.
Additionally, Russia is a full member of the Shanghai Cooperation Organization (SCO). The SCO is an intergovernmental organization that includes India, Iran, Kazakhstan, Kyrgyzstan, China, Pakistan, Tajikistan, and Uzbekistan as full member states. It also has several countries in different statuses as SCO dialogue partners and observers, such as Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Cambodia, Egypt, Kuwait, Maldives, Mongolia, Myanmar, Nepal, Saudi Arabia, Sri Lanka, Turkiye, Turkmenistan, Qatar, and the United Arab Emirates.
Saudi Arabia
GDP: US$1.06 trillion
GDP Per Capita (PPP): US$46,130
2023 Real GDP Growth: 3.1%
Population: 37.5 million
Thanks to its oil and gas industry, Saudi Arabia is one of the wealthiest countries in the Middle East. The country holds approximately 17% of the world’s hydrocarbon reserves and has one of the most extensive oil production capabilities globally. NOC Saudi Aramco drives all aspects of Saudi Arabia’s oil and gas industry and is the world’s leading NOC by reserves. Saudi Arabia’s major trading partners are the UAE, China, India, Egypt, and the United States. Its main exports are Petroleum oils, Polymers of ethylene, and Petroleum gas.
Saudi Arabia is part of the Gulf Cooperation Council (GCC) along with Kuwait, Qatar, Bahrain, the UAE, and Oman. Being a member of GCC grants special trade and investment privileges within these countries. On January 1, 2003, the GCC implemented a Customs Union, allowing the free movement of local goods among member states. The countries have also agreed to switch to a single currency by January 1, 2010, at the latest, but this has yet to happen, and the proposal for a common market is still under development. Under GCC, Saudi Arabia has FTAs with the EFTA countries (Iceland, Liechtenstein, Norway, Switzerland) and Singapore.
Saudi Arabia is a member of the GAFTA (Greater Arab Free Trade Area), which is composed of Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the UAE, and Yemen.
In March 2023, Saudi Arabia’s cabinet approved the decision to join the Shanghai Cooperation Organization (SCO) as a dialogue partner. The SCO is an intergovernmental organization that includes China, India, Iran, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan and Uzbekistan as full member states. It also has several countries in different statuses as SCO dialogue partners and observers, such as Afghanistan, Armenia, Azerbaijan, Bahrain, Belarus, Cambodia, Egypt, Kuwait, Maldives, Mongolia, Myanmar, Nepal, Sri Lanka, Turkiye, Turkmenistan, Qatar and the United Arab Emirates.
The integration of Saudi Arabia into the SCO has resulted in Iran and Saudi Arabia agreeing to restore their diplomatic ties after seven years of severed relations. The regional rivals have committed to reopening embassies in Tehran and Riyadh by May 2023, which marks a significant step towards resolving their long-standing conflicts.
In January 2024, Saudi Arabia is set to join the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, it will be joined by Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt.
Lastly, Saudi Arabia is a founding OPEC member, consisting of Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the UAE, and Venezuela. The OPEC group aims to coordinate and unify petroleum policies, stabilize oil markets, and ensure efficient supply to consumers while providing steady income to producers and a fair return on investment.
South Africa
GDP: US$399 billion
GDP Per Capita (PPP): US$14,340
2023 Real GDP Growth: 0.1%
Population: 61.3 million
South Africa is the world’s largest producer of platinum group metals (87.7% of world total), manganese (80%), chromium (72.4%), gold (29.7%), and alumino-silicates. It accounts for over 40% of the global production of ferrochromium, platinum group metals, and vanadium.
South Africa’s mining industry plays a vital role in the global market, contributing to 51.7% of the world’s ferrochromium exports and 54% of alumino-silicates. The country is a major exporter of platinum group metals, gold, vanadium, and manganese ore. Its main trading partners are China, Germany, the United States, Mozambique, Japan, and India.
South Africa is a member of the BRICS countries. The group currently consists of Brazil, Russia, India, China, and South Africa. In January 2024, Saudi Arabia, Iran, Ethiopia, the UAE, Argentina, and Egypt are set to join the BRICS bloc.
Duty-free trade between South Africa and the other four countries (Botswana, Lesotho, Namibia, and Eswatini) make up the Southern African Customs Union (SACU). Additionally, as of 2012, the Southern African Development Community (SADC) Free Trade Agreement allows duty-free trade among 15 out of the 16 SADC Member States. These countries include Angola, Botswana, Democratic Republic of Congo, Eswatini, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, United Republic of Tanzania, Zambia and Zimbabwe, with Comoros being the only exception.
The European Union-South African Trade and Development Cooperation Agreement came into effect in 2000. It is a progressive Free Trade Agreement (FTA) and has become the cornerstone of regional trade. The FTA aims to improve market access for both parties. The agreement is crucial for South Africa’s integration into the global economy. It covers nearly 90% of the bilateral trade between the EU and South Africa.
South Africa, through SADC, has completed negotiations for Phase I of the Tripartite Free Trade Agreement, creating a free trade area between SADC, the East African Community (EAC), and the Common Market of Eastern and Southern Africa (COMESA).
South Africa also has a preferential trade agreement (PTA) with the MERCOSUR group and is a member of the African Continental Free Trade Area (AfCFTA), which commenced trading in January 2021. Currently, it is negotiating FTAs with the United Kingdom and India.
South Korea
GDP: US$1.72 trillion
GDP Per Capita (PPP): US$47,770
2023 Real GDP Growth: 1.5%
Population: 52.1 million
South Korea has undergone one of the most significant economic transformations in the last 60 years. Despite its small size, lack of natural resources, and relatively small population, the country has significantly emphasized technology development and innovation to drive growth. This has enabled South Korea to transition from a primarily rural, agricultural country to an urban, industrialized nation with a strong presence in electronics, telecommunications, automobile production, chemicals, and steel sectors. Additionally, South Korea is the world’s second-largest shipbuilder, responsible for a quarter of global shipyard output.
South Korea is the world’s sixth largest exporter; its primary trading partners include China, the United States, Vietnam, Japan, and Hong Kong. Its top exports are integrated circuits, cars, refined petroleum, motor vehicles and parts, and office machine parts.
South Korea is a member of the Asia-Pacific Economic Cooperation (APEC), the primary forum in the Asia-Pacific region for promoting trade, investment, economic growth, and regional collaboration, which includes Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Chinese Taipei, Thailand, the US, and Vietnam. South Korea was the host country for the APEC Summit in 2005.
The nation has 18 Free Trade Agreements with ASEAN, Australia, Canada, Central America (Partial), Chile, China, Colombia, European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein), European Union, India, New Zealand, Peru, Singapore, UK, US, Turkiye and Vietnam.
Lastly, it forms part of the Regional Comprehensive Economic Partnership (RCEP), which is a free trade area in Eastern Asia and Australia. RCEP is considered one of the biggest free trade agreements worldwide and is responsible for around one-third of the global economic output. Its members include Australia, Brunei Darussalam, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.
Turkiye
GDP: US$1.03 trillion
GDP Per Capita (PPP): US$30,290
2023 Real GDP Growth: 2.7%
Population: 89.2 million
Turkiye holds the second-largest position in the world when it comes to producing and exporting chromite. The country is also a major miner of several valuable minerals, including iron ore, coal, lignite, bauxite, and copper. Furthermore, Turkiye is the leading producer of steel in the Middle East. As for agriculture, the country’s primary crops include wheat, barley, olives, and tobacco.
Turkiye’s major trading partners include Russia, the USA, Germany, and China. In 2022, Russia was the largest source of imports for Turkiye, with imported products worth 58.8 billion dollars. Germany was the top destination for Turkish exports, with exported products worth 21.1 billion dollars.
Since 1995, Turkiye and the European Union have been connected by a Customs Union agreement. The agreement only covers industrial goods, excluding agriculture (except for processed agricultural products), services, and public procurement. As a result of the Customs Union, Turkiye was removed from customs duties and quantitative restrictions, opening its internal market to EU and third-party competition while gaining free access to the EU market. Turkiye has also taken steps to align itself with the EU’s preferential regimes for third countries and harmonize its legislation with the EU’s acquis communautaire in areas such as standards, technical legislation, and competition policy.
Turkiye is a member of the Euro-Mediterranean partnership (Euromed), and as such, it is expected to establish free trade agreements with all other Mediterranean partners. The ultimate goal of this trade partnership is to create a deep Euro-Mediterranean Free Trade Area, which aims to eliminate any trade and investment barriers between the EU and Southern Mediterranean countries, as well as among the Southern Mediterranean countries themselves.
Turkiye currently has 22 free trade agreements (FTAs) in force with different countries, including the EFTA nations, Israel, Macedonia, Bosnia-Herzegovina, Palestine, Tunisia, Morocco, Egypt, Albania, Georgia, Montenegro, Serbia, Chile, Mauritius, South Korea, Malaysia, Moldova, Faroe Islands, Singapore, the United Kingdom, Venezuela, and Kosovo. Additionally, Turkiye is actively involved in FTA negotiations with Indonesia, Japan, Somalia, Thailand, and Ukraine.
The United Kingdom
GDP: US$3.16 trillion
GDP Per Capita (PPP): US$49,420
2023 Real GDP Growth: -0.3%
Population: 69.2 million
The United Kingdom is the world’s sixth-largest economy by GDP. It is a significant producer in the civil and military aerospace and pharmaceutical industries. While oil production has decreased significantly, companies such as Shell and British Petroleum remain leading players in the petroleum industry.
The UK is an independent trading nation with over 70 existing trade agreements. For the complete list of the UK’s trade agreements, click here.
The EU-UK Trade and Cooperation Agreement is a crucial agreement that governs the post-Brexit relationship between the European Union and the United Kingdom. It was signed on December 30, 2020, and became effective on May 1, 2021. The agreement outlines preferential arrangements in various domains, including trade, investment, and law enforcement. It goes beyond typical free trade agreements and ensures a level playing field and respect for fundamental rights. However, the accordance does not cover foreign policy, external security, and defense cooperation, as the UK chose not to include them. The agreement forms a strong foundation for maintaining the lasting relationship and cooperation between the EU and the UK.
The EU, as a whole, is the leading trading partner of the United Kingdom. At a country level, the UK mainly exports to the United States, Germany, the Netherlands, Ireland, and France, and its leading suppliers are the United States, Germany, China, the Netherlands, and Norway. UK’s main exports were mechanical power generators, cars, medicinal and pharmaceutical products, and crude and refined oil. It is also the largest exporter of spirits in the world.
The country has a structural trade deficit due to importing more goods than it exports, and although the services industry generates significant surpluses, it is insufficient to offset the shortfall in the trade of goods.
