U.S. wants to replace the Russian market for Moldova with a Western one

Fruits and berries from Moldova, almost 90% of which traditionally were exported to Russia, will henceforth become rare guests on the Russian consumer market. By the end of October this year, the volume of supplies of products to the Russian Federation decreased by at least a third in comparison with the same period last year.

Why is this happening? Because Moldova began to pursue a foreign trade policy that contradicts its status in the Eurasian Economic Union. As a result, the Russian Federation and other EAEU countries were forced to introduce protective, that is, increased, duties on imports from the republic.

The fact is that this country has had observer status in the EAEU since 2018, which provides for preferential terms for the sale of its products in the Union.

But back in 2014, Moldova signed an association agreement with the European Union. The association of any country with the EU inevitably leads, as practice shows, to the re-export of its goods through this country, often illegal.

Numerous facts on the import of goods from the EU region to the Russian Federation and other EAEU countries from the same Ukraine, which has been associated with the EU since 2014, is a confirmation of this. Similar facts were recorded with regard to supplies from Moldova.

“Duty” protection of the domestic Russian market from re-export from the European Union through Ukraine and Moldova has become a necessity also because since August 2014, the import of Western agricultural raw materials and ready-made food has been banned in the Russian Federation. However, given the difficult economic situation in the Moldovan economy, the Russian side – for seven years of Chisinau’s association with the EU – nevertheless tried not to impose sharp restrictions on the import of goods from Moldova. However, the volume of food from the EU entering the Russian Federation through this country did not decrease. Therefore, since April this year, Russia has introduced protective duties on imports from Moldova.

In this regard, Moldovan fruit and berry exports (and this is almost a third of the annual replenishment of the national state budget of the country, and at least 70% of the total value of Moldova’s annual exports) in this situation will affect the republic’s GDP: according to local analysts, it may well decline by the middle 2022 by 15%.

And for the Russian consumer, all of the above factors, in aggregate, led to the fact that in January-September of this year. According to trade statistics, imports of Moldovan apples to the Russian Federation decreased by 20%, grapes – by more than 20%, berries – by almost half (only cherries — by more than 4 times!). The drop in supplies continues today.

Meanwhile, the European Union, as before, is importing only meager amounts of Moldovan fruits and berries, since they themselves have a traditional overproduction there. However, Romania periodically increases its agricultural imports from Moldova, as part of its indefinite course of “expropriation” of the neighboring country. In early October, the ministries of agriculture of both countries have already agreed to increase the volume of these supplies to Romania.

However, according to many estimates, the Romanian market is capable of replacing the Russian one by a maximum of 20%. Since Romania itself is among the largest exporters of fruits and vegetables to other EU countries.

Meanwhile, the Chisinau authorities are clearly in no hurry to compensate local producers for these losses. In previous years, the Russian side, as we noted, met Moldovan producers halfway by extending the terms of exemption of Moldovan agricultural products from import duties. But now the situation is aggravated by political factors.

On October 13, on national television, a well-known Moldovan economist, former Prime Minister of Moldova (in the first half of the 1990s), Alexander Muravsky, explained the situation with Moldovan agricultural exports:

“Today, three times less production is exported from Moldova to Russia than to Romania. At the same time, the leadership of Moldova took part in the recent anti-Russian “Crimean Platform” in Kiev, which all the more aggravates the situation with Moldovan exports”.

At the same time, Moldovan agricultural producers are not ready to put up with this state of affairs.

“We would not like to interfere in political issues, but we expect that the political class will have less influence on the economic problems of our country. For the geopolitical moments are more and more detrimental to the economy”, this is the position of Vasily Myrzenko, Executive Director of the National Federation of Farmers of Moldova.

In the meantime, the United States has undertaken to help this Moldovan industry in the current situation. Since October, within the framework of the US Agency for International Development (USAID) project “Sustainable Agriculture in Moldova” (APM), relations have resumed. According to the news agency “MoldPress” (Chisinau), the provision of grants to the fruit and berry industry of Moldova has begun. The purpose of these grants is quite specific:

“To jointly promote the export of fruits and grapes to the European Union or other non-traditional markets.”

Note: we are talking about “non-traditional” for Moldova, that is, about Western or “pro-Western” markets. This is understandable.

It is hardly in the interests of Brussels, Washington and Bucharest to facilitate the export of Moldovan fruits and berries to Russia and the EAEU. That is, to promote their mutually beneficial economic relations. The development of such relationships does not fit into the West’s strategy towards the countries of the former USSR.

Therefore, the real goal of American grants is to economically separate Moldova from Russia and, in general, from the EAEU, simultaneously complicating the already complex political relations between them. So no long-term contracts with Moldova to increase the import of its fruit and berry products to Russia can be expected.

Igor Leonidov, Centenary