By Chris Devonshire-Ellis

Introduction

Russia’s new 2023 Foreign Policy Concept, the first since 2016, has come into immediate effect. The document updates the priorities, goals, and objectives of the foreign policy activities of Russia and is an important read into the overall national development and other strategies. It can be broken down into 14 specific sections, which we outlined here.

We also previously discussed the Concepts impact upon the West here and the BRICS here.

In this article, I discuss the implications for what the Concept’s implications are in terms of global trade, as the document specifically calls for developing relations with various regional trade blocs.

Where Russia Sees Global Trade Development & Investment Opportunities

While my analysis concerning Russia’s Foreign Policy Concept for the West was largely downbeat, it is a different story for how the Kremlin views trade, development, and investment elsewhere. I have also already discussed the BRICS – this article concentrates on the rest of the world. Much of this rhetoric is contained within Article 4 of the Concept, “Foreign Policy Priorities of the Russian Federation”.

Engagement Rules

Within this, the Concept lays down some ground rules for engagement with Russia, and states:

“Russia is striving towards a system of international relations that would guarantee reliable security, preservation of its cultural and civilizational identity, and equal opportunities for the development for all states, regardless of their geographical location, size of territory, demographic, resource and military capacity, or political, economic and social structure. In order to meet these criteria, the system of international relations should be multipolar and based on the following principles:

1. Sovereign equality of states, respect for their right to choose models of development, and social, political and economic order;
2. A rejection of hegemony in international affairs;
3. Cooperation based on a balance of interests and mutual benefit;
4. Non-interference in internal affairs;
5. Rule of international law in regulating international relations, with all states abandoning the policy of double standards;
6. Indivisibility of security in global and regional aspects;
7. Diversity of cultures, civilizations and models of social organization, non-imposition on other countries by all states of their models of development, ideology and values, and reliance on a spiritual and moral guideline that is common for all world traditional religions, and secular ethical systems;
8. Responsible leadership on the part of leading nations aimed at ensuring stable and favourable conditions of development, both for themselves and for all other countries and peoples;
9. The primary role of sovereign states in decision-making regarding the maintenance of international peace and security.

Analysis: These rules will be scoffed at by Ukraine supporters who will say that these have obviously not been upheld by Russia in terms of their own experience. However, that is also based on the premise that Russia was the sole aggressor, while the Kremlin asserts that Ukrainian violence against ethnic Russians in Ukraine’s Donbass region was the starting point. Obviously both positions cannot be equally truthful. As this analysis is based on the Russian perspective, I will follow their position as regards the meaning of these qualifying criteria.

The first six are largely push-back against the United States and the West; and will be of special importance to nations that have felt, rightly or wrongly, pressurized by them to do as they wish – often a continuation of their foreign policy without regard to sovereign development. That will ring certain bells in Africa, the Middle East and Central – Latin American political circles.

Otherwise, the Concept promotes political, religious, and cultural tolerance and implies that Russia will not be discriminatory in its approach. In doing so Russia is laying down the groundwork for a multipolar society not based on creating divisions. In this regard, it follows Chinese policy for global development.

Institutional Protection

The Concept then spells out what it intends to do to institutionalize these rules. In order to help adapt the world order to the realities of a multipolar world, Russia intends to make it a priority to:

1. Eliminate the vestiges of domination by the US and other unfriendly states in global affairs, create conditions to enable any state to renounce neo-colonial or hegemonic ambitions;
2. Improve international mechanisms for ensuring security and development at the global and regional levels;
3. Restore the role of the United Nations as the central coordinating mechanism in reconciling the interests of UN Member States and their actions in pursuit of the goals of the UN Charter.

Analysis: This effectively calls for reform of the United Nations, and all the bodies underneath that, such as the WHO, WTO, World Bank and so on. That implies that Moscow will be seeking assistance from its allies to push this forward. This is a difficult task: of the 193 members, each country has just one vote, with a 2/3 majority required to make changes.

That means that within the UN, Russia’s one vote is worth the same as Trinidad & Tobago’s. This is turn has led to the United States encouraging smaller states, often under the guise of ‘democracy’ as well as the US-based education of future important young and potentially political figures to be groomed by the US to be supportive of its policies rather than others.

Critics therefore point to a system loaded in favor of the US as it has exerted its influence and that the one nation / one vote system is not proportionally representative. Russia’s singling out the UN in its Concept means an increase of Russian diplomacy, and especially within the smaller, island nations, along with China’s increase in doing the same, can be expected to manifest itself in coming years as it seeks to persuade each sovereign member vote to align with it or China.

Russia – and China – have some advantages in being able to project this as neither were colonial powers unlike the US and EU, and do not have any colonial legacy – a point also referenced in the Concept. That, and promises of medical, education and infrastructure aid will help a combined Russia-China get increasingly close to being able to reach that 2/3 majority to impose change at the UN and instigate a more multilateral approach within it.

Quite what will happen when the United States and West begin to be outvoted and out-maneuveredat the UN remains to be seen – but it is possible this process is already underway as the collective West is beginning to self-protect itself by imposing sanctions and tariffs.

Global Regions Of Interest To Russia

The Concept specifically mentions “Enhancing the capacity and international role of the interstate association of BRICS, the Shanghai Cooperation Organization (SCO), the Commonwealth of Independent States (CIS), the Eurasian Economic Union (EAEU), the Collective Security Treaty Organization (CSTO), the RIC (Russia, India, China) and other interstate associations and international organizations, as well as mechanisms with strong Russian participation.”
and

“Supporting regional and sub-regional integration within friendly multilateral institutions, dialogue platforms and regional associations in Asia Pacific, Latin America, Africa and the Middle East”
Analysis: I already discussed the BRICS element here and included the concept of the merging of the BRICS, SCO, EAEU and CIS, an issue already being discussed at the Ministerial level of these organizations. That would create an entity, if collectively institutionalized, that would look something like this:

However, Russia’s new Foreign Policy Concept goes further still by mentioning the Asia Pacific, Latin America, Africa, and the Middle East. I discuss these as follows:

The Asia Pacific

The Asia Pacific is not generally noted in Russia’s Foreign Policy, and its inclusion can be considered something of a surprise. It also depends on the definition.

Russia has often mentioned in recent years of increasing collaboration with ASEAN. If that is the intent (and it seems odd to miss the ASEAN bloc from the Concept), then this makes more sense. Russia has a Free Trade Agreement (via the EAEU) with Vietnam, while fellow ASEAN members Cambodia, Indonesia, and Thailand have all indicated a desire to sign an FTA with the EAEU.

Vietnam, buoyed by what it sees as a highly successful trade agreement, has already urged the ASEAN bloc as a whole to enter into an FTA with the EAEU. Discussions are continuing. Either way, it can be expected that at least some ASEAN members will successfully negotiate an FTA with Russia via the EAEU. This can be expected to happen within a reasonable timescale dependent upon a cessation of hostilities in Ukraine, making the Russia aspect more politically viable.

However, should the Concept, as it says, be specific about the Asia Pacific, then this becomes a rather different animal. Russia has a substantial Eastern seaboard and is an AsiaPac nation in its own right. This could mean enhancing collaboration at APEC, which would invoke push back from the United States, but could appeal to countries such as Chile and Mexico.

Russia is simultaneously making plans to develop its Far Eastern infrastructure, including adding much needed capacity to the Trans-Siberian Railway and its Far Eastern seaboard Ports, such as Vladivostok. There are 20 Russian cities along the Trans-Siberian with populations in excess of 1 million, and another 20 accessible by other rail, river and road branches that connect with it. Plus, the Trans-Siberian also offers access to China and Central Asia, additional new markets.

Teasingly, a push by Russia to involve itself more in the Asia Pac region could involve, over time, attempts to negotiate trade agreements with the Regional Comprehensive Economic Partnership (RCEP) bloc that currently exists and includes Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

Even more outrageous would be approaching the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The United Kingdom also joined this group a few weeks ago. Sergey Lavrov, the Russian Foreign Minister, could have fun making fur fly should he make such suggestions. This might not be practical during today’s political climate – but as Russia has apparently made Asia Pac part of its Foreign Policy Concept, the future normalizing of ties and a few years of détente cannot fully rule out the possibility either.

Latin America

Russia already has Latin America’s largest economy as a growing ally and trade partner with Brazil being part of the BRICS. 2022 bilateral trade reached a record high of US$10 billion, with Brazil purchasing fertilizers and fuel, and exporting soybeans, sugar, other consumables, and equipment to Russia. Russia is also a major investor in Brazil’s nuclear energy programme.

Argentina is a BRICS candidate country, while Russia maintains good relations with several Latin American and Caribbean countries: Cuba, Ecuador and Venezuela all have good trade relations with Moscow.
Expanding this will involve Mercosur, the Latin American trade bloc that also includes Argentina, Brazil, Paraguay, and Uruguay with associates in Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname. It can be expected that developments with these countries either with inclusion into the BRICS + or Free Trade Agreements with the Eurasian Economic Union are highly likely during the course of late 2023-25.

Africa

The Russian Foreign Policy Concept takes a similar view of Africa, considering the Continent as a whole, greater than the sum of its parts – a direct opposite of the European colonial approach. In doing so, Russia is recognizing that while structurally the pan-African concept is still not yet complete, the future of Africa is the African Union and pan-African trade blocs such as the African Continental Free Trade Agreement (AfCFTA).

The Concept states: “Russia stands in solidarity with the African states in their desire for a more equitable polycentric world and elimination of social and economic inequality, which is growing due to the sophisticated neo-colonial policies of some developed states towards Africa. Russia intends to support further the establishment of Africa as a distinctive and influential centre of world development, giving priority to:

1. Supporting the sovereignty and independence of interested African states, including through security assistance, inter alia food and energy security, as well as military and military-technical cooperation;
2. Assisting in resolving and overcoming the consequences of armed conflicts in Africa, especially inter-ethnic and ethnic ones, advocating the leading role of African states in these efforts, based on the principle “African problems – African solutions”;
3. Strengthening and deepening Russian-African cooperation in various spheres on a bilateral and multilateral basis, primarily within the framework of the African Union and the Russia-Africa Partnership Forum;
4. Increasing trade and investment with African states and African integration structures (primarily the African Continental Free Trade Area, the African Export-Import Bank and other leading subregional organizations), including through the EAEU;
5. Promoting and developing links in the humanitarian sphere, including scientific cooperation, training of national personnel, strengthening health systems, providing other assistance, promoting intercultural dialogue, protecting traditional spiritual and moral values, and the right to freedom of religion.

While the Concept as concerns Africa doesn’t go into detail, it does suggest that Russia will provide security assistance to stop conflicts; and intends to be heavily involved in developing pan-African structures to assist the continent as a whole. A major issue to be resolved is financing – the emergence of a pan-African bank is a priority. This is partially addressed by both Egypt and South Africa being members of the (BRICS) New Development Bank, but much more needs to be done. That is already very much part of China’s remit too, and joint China-Russia and certainly BRICS involvement in African trade and investment will be a major part of where and how the African continent develops. Russia, free of the colonial baggage that the EU and UK carry into Africa, will be influential.

The Middle East

The Concept mentions the Middle East twice, once in its round up (above) of ‘priority regions’ and another in its intent towards developing relations with what it also refers to as ‘The Islamic World’.
Here, the Concept states that Russia will focus on:

1. Developing the full-scale and trustful cooperation with Iran, providing comprehensive support for Syria, and deepening the multifaceted mutually beneficial partnerships with Turkey, Saudi Arabia, Egypt, and the other Member States of the Organization of Islamic Cooperation, given the extent of their sovereignty and constructiveness of their policy towards Russia;
2. Establish a sustainable comprehensive regional security and cooperation architecture in the Middle East and North Africa, based on combining the capacities of all the states and interstate alliances of the regions, including the League of Arab States and the Gulf Cooperation Council. Russia intends to actively cooperate with all the interested states and interstate associations in order to implement the Russia’s Collective Security Concept for the Persian Gulf Region, viewing the implementation of this initiative as an important step toward a sustainable and comprehensive normalization of the situation in the Middle East;
3. Promote interfaith and intercultural dialog and understanding, consolidating efforts to protect traditional spiritual and moral values, and combating Islamophobia, including via the Organization of Islamic Cooperation;
4. Reconcile differences and normalizing relations among the Member States of the Organization of Islamic Cooperation, as well as between these states and their neighbors (primarily Iran and the Arab countries, Syria and its neighbors, the Arab countries and Israel), including within the efforts aimed at a comprehensive and lasting solution to the Palestinian question;
5. Helping resolve and overcome consequences of armed conflicts in the Middle East, North Africa, South, Southeast Asia and other regions where Member States of the Organization of Islamic Cooperation are located;
6. Unleashing the economic potential of the Member States of the Organization of Islamic Cooperation with a view to establishing the Greater Eurasian Partnership.

The Concept shows that Russia intends to play a leading role in promoting peace, trade and investment into the Middle East. It especially mentioned the reintegration of Iran and Syria into the Arabic world, echoing the recent assistance provided by Beijing in brokering a peace agreement between Saudi Arabia and Iran, and encouraging the same with Syria.

That distinction is crucial – the United States in particular has been highly active for most of the 2000’s in the region – involved in wars in Libya, Iraq, and Syria while demonizing Iran over its nuclear policy. That influence is now waning and a realization that the regional powers are better off collaborating than conflicting is a significant step forward. It is also worth noting that despite American involvement in the Islamic world, the US approach has largely been divisive, pitching Sunni and Shi-ite’s at each other and exploiting regional factions.

Both Russia and China’s approach has been inclusive – treating the regional as Islamic as opposed to enhancing sect and tribal differences. This is gaining traction – Russia’s involvement in the Middle East may well be complicated, but along with China, encouraging inclusivity as opposed to divisiveness appears to be the way forward. If so, this will significantly impact future oil and gas trade flows.

In terms of trade, Russia can be expected to increase dialogue with a longer-term view of enhancing cooperation with the Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Given that Russia already enjoys significant trade and political relations with these countries, work can be expected to develop towards an eventual Russia-GCC Closer Economic Partnership Agreement, tailored for maximizing the best elements of energy and non-energy trade each has to offer.

Summary

The notion will not be popular in the West, which wants to cut Russia off from global trade and investment, but in reality, we can see that Moscow, despite the effective loss of European Union markets (it never did much trade with the United States in any event) is poised to make significant efforts to reposition itself with a more global reach than has previously been the case. This will be the case in both imports and exports.

Russian Imports Potential

Russia has lost part of its Western originated supply chain and suppliers, although this is rapidly being made up in terms of parallel imports, increases in domestic production, and sourcing alternative suppliers. This recent display of goods at a Russian supermarket illustrates that consumables are merely being sourced from elsewhere, including from all of the regions mentioned in the Foreign Policy Concept. Now is a good time for exporters in the Asia Pacific, ASEAN, Africa, Latin America and the Middle East to be looking at selling to Russia – and related markets in Central Asia.

Russian Exports Potential

Most analysts view Russia as an energy play, however while the county remains a dominant global player in this field its non-energy manufacturing sector is growing fast. This includes automotive, engineering, agriculture, fertilizers, and light manufacturing and can be expected to increase as the Russian government have issued stimulus for increasing its domestic manufacturing base.

Western Pushback

There will be some attempts to push back against this from the West, with threats of secondary sanctions and the imposition of tariffs all on the agenda. That said, the United States and European Union appears to have come close to exhausting their sanctions pool against Russia directly, and there will be significant discontent among third party countries should they attempt to punish them for trading with a country that either traditionally supplies or buys from them or is increasingly doing so.

Third-party sanctions will need to be offset by some sort of trade barter with the third nations involved to allow them to offset any economic damage created by ceasing Russian trade and investment. Given the huge regions and vested interests involved, it seems unlikely that the West can afford to do so.

If correct, this leaves Russia’s Foreign Policy Concept in terms of Global Trade very much a work in progress – but one that can be expected in time to influence global supply chains and regional development progress – a process not dissimilar to China’s Belt and Road Initiative. This encouragement of targeted trade – but without the need to provide finance, suits Russia’s currently stressed predicament.

In this way, we can see that Russia is becoming a major BRI beneficiary – by exploiting new global infrastructure ports, railways, and other trade facilities on a worldwide basis that the Chinese have already built. Businesses within the regions mentioned should be studying the existing and upcoming trade agreements that Russia has – and is putting into place.

Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. He can be reached at [email protected].

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