Foreign trade of the Republic of Belarus

One of the main forms of foreign economic activity is foreign trade.

Foreign trade is trade between countries, consisting of export (export) and import (import) of goods, services, results of intellectual activity.

Foreign trade is a specific sector of the economy associated with the sale of part of the gross product (goods, services, ideas) in foreign markets and part of the foreign gross output in the national market.

Foreign trade is a commercial activity related to the purchase and sale of goods, works, services, results of intellectual activity on the foreign market.

For most countries of the world, it is the main form of foreign economic relations, and also mediates other forms, a significant part of which is realized through foreign trade. For any country in the world, the role of foreign trade can hardly be overestimated. According to Jeffrey Sachs, an American economist, “The economic success of any country in the world is based on foreign trade. No country has yet managed to create a healthy economy by isolating itself from the global economic system.”

One of the most important indicators of a country’s participation in the international division of labor in the world market is the foreign trade quota. According to the Methodology of the World Bank, the foreign trade quota is determined by the ratio of the amount of exports and imports (the volume of foreign trade turnover) to the gross domestic product (GDP) at purchasing power parity. The foreign trade quota of Belarus in 2001 was about 32%. For comparison, the foreign trade quota of Poland is 27%, Italy – 38.2%, Spain – 36.2%, Greece – 28%. This suggests that our country occupies a fairly firm position in world exports and is on a par with developed European countries.

Foreign trade is determined by foreign trade policy, which is an integral part of foreign economic policy. Foreign trade policy refers to the targeted influence of the state on trade relations with other countries through subsidies and direct restrictions on exports and imports. The main objectives of foreign trade policy are:

a change in the extent and manner of inclusion of a given country in the international division of labour; changes in export and import volumes; changes in the structure of foreign trade; providing the country with the necessary resources (raw materials, energy, etc.); changes in the ratio of export and import prices.

The basic principles for the formation of the foreign trade policy of the Republic of Belarus are laid down in the National Export Development Programme for 2000-2005. They include measures to regulate foreign trade (tariff and non-tariff), as well as state support for the development of exports and the promotion of Belarusian goods to foreign markets.

An analysis of the implementation of the Programme shows the positive dynamics of its implementation in previous years:

in 2000, exports increased by $1 billion (compared to the parameters of the Programme); in 2001 – by 469 million US dollars; in 2002, the Program provided for the volume of exports of goods and services in the amount of 9 billion US dollars, in fact, according to statistics, it amounted to 9 billion 316.7 million US dollars.

A strategically important goal for the republic is to determine its foreign trade potential, place in the international division of labor and ensure smoothness of entry into world economic relations.

Foreign trade potential is a complex characteristic that reflects the material and intellectual possibilities of the state’s participation in trade cooperation with other countries, i.e. it is a set of all economic resources (products, services, etc.) that can be used in foreign trade.

The Republic of Belarus has a fairly large foreign trade potential. Occupying 0.9% in Europe, 1.4% in terms of population and 0.15% and 0.18% in the world community, respectively, Belarus specializes in the production of engineering, chemical, petrochemical, light and food industries, as well as livestock, flax growing and potato growing. The basis of foreign trade potential is industry (more than 66% of GDP), including the share of mechanical engineering, chemistry and petrochemistry account for more than 40% of gross output. Among the CIS countries, the Republic of Belarus confidently holds a leading position in the production of tractors, trucks, chemical yarns and fibers; first place in the production of shoes, televisions, refrigerators, meat, milk, potatoes, eggs per capita.

By the way, according to expert estimates, the industrial potential of the CIS member states is about 10% of the world, the reserves of the main types of natural resources are about 25%.

At the same time, the structure of the republic’s economy has long been formed within the framework of the intra-Union division of labor and has a pronounced nature of the specific consumption of energy resources, metal, components, etc. In the most severe dependence, the belarusian economy is on the Russian Federation. Russia meets the needs of the production potential of Belarus in raw materials, materials and semi-finished products by more than 60%, while consuming more than 70% of the republic’s industrial production.

The country’s economy is focused on foreign markets. The share of exports in GDP in 2001 was more than 60%. Belarus mainly exports manufacturing products:

– 90% of tractors, trucks, motorcycles, tires produced;

– 80-90% of potash fertilizers;

– 70-80% of metalworking machines, refrigerators, freezers, chemical fibers and threads, semiconductor devices and integrated circuits;

– more than 50% of televisions, various goods of light industry.

The inclusion of the republic in the system of the international division of labor is facilitated by a favorable geopolitical position. On its territory there are communications connecting Russia with European countries, Ukraine with the Baltic states, Asian countries with Europe.

The Republic of Belarus has export-import relations with more than 140 countries of the world and exports more than 1000 items of products. The main foreign trade partners of the country are Russia, Ukraine, Poland, Latvia, Germany, Lithuania, the USA, etc. The country priorities for the Republic of Belarus are the countries of the former socialist camp, individual countries of Southeast Asia, Latin America, the Middle East and the countries of the Persian Gulf, and southern Africa.

Expansion of Belarus’ participation in international economic relations is possible in various sectors and, especially, in such as:

mechanical engineering – an increase in the export of tractors, road-building machines, refrigerators, wood – and metalworking machines, subject to the improvement of products and the organization of after-sales service; chemical complex – nitrogen and potash fertilizers, polyethylene, car tires; construction industry – cement, glass, roofing materials, the expansion of exports of which is restrained due to the lack of own resources for individual components; woodworking industry – fiberboard, furniture.

It should be noted that Belarus is one of the world’s largest producers of flax fiber and potatoes (in some years 16% and 4%, respectively). The republic has favorable opportunities for the development of dairy and beef cattle breeding, for the supply to the world market of high-quality products of flax, ceramics, glass, crystal, as well as traditionally national products from local raw materials that have no analogues in the world (products made of clay, linen, straw).

The main indicators of the republic’s foreign trade for 1995-2002 are presented in table 1.

According to the Ministry of Statistics and Analysis of the Republic, the volume of exports of goods and services of Belarusian enterprises in 2002 increased by 10.1% compared to 2001 and amounted to 9316.7 million dollars. UNITED STATES. The volume of imports increased by 9.9% compared to 2001 and amounted to 9652.3 million dollars. UNITED STATES. At the end of last year, there was a negative balance of foreign trade in the amount of $ 335.6 million. UNITED STATES.

Table 1 Resource requirements by component

Main indicators of foreign trade of the Republic
Belarus for 1995-2002, mln USD. UNITED STATES

The volume of exports of Belarusian goods in 2002 increased by 8.7% compared to 2001 and amounted to 8097.8 million dollars. Us, including goods exported to the CIS countries in the amount of 4461.3 million dollars. USA, of which to Russia – on
$4,053.9 million USA, and to states outside the CIS – by 3636.5 million dollars. UNITED STATES.

Exports to the CIS countries decreased by 0.7% as a result of a reduction in exports to Ukraine by 35.6%, to Russia – increased by 2.4%. Belarusian exports to non-CIS countries increased by 23%.

The commodity structure of exports is dominated by mineral products, vehicles, mechanical and electrical machinery and equipment, products of the chemical and textile industries.

Experts consider the fulfillment of the forecast indicator for the export of goods to be the result of systematic work of the Government, regions and enterprises. In particular, the role of tariff regulation measures is emphasized, for example, the introduction of zero rates of export customs duties on such types of products as timber, rolled ferrous metals, paper, as well as a reduction from 43.5% to 21% of the amount of anti-dumping duties applied by the European Union to Belarusian chemical fibers and bundles (decision of the EU Council of October 8, 2002). The commodity structure of exports is presented in Table 2.

Table 2.

Commodity structure of exports in 2002

The volume of imports of goods amounted to 8979.9 million dollars. USA, including from the CIS countries – 6215.7 million dollars. USA, of which from Russia – 5842.5 million dollars. UNITED STATES. Goods worth $2764.1 million were imported from non-CIS countries. UNITED STATES. Belarus increased the total volume of purchases of goods by 9.9%. At the same time, the import of goods from the CIS countries increased by 8.9%, including from Russia by 9.3%. Imports from countries outside the CIS increased by 11.8%. The commodity structure of imports is presented in Table 3.

Table 3.

Commodity structure of imports in 2002.

The balance of foreign trade in goods was negative in the amount of minus 882.1 million dollars. An increase of $152.2 million compared to 2001. UNITED STATES. With the commonwealth countries, the balance is negative in the amount of minus 1754.4 million dollars. The United States, including with Russia – minus 1788, 6 million dollars. UNITED STATES. With countries outside the CIS, the balance is positive in the amount of 872.3 million dollars. UNITED STATES. Compared to 2001, the surplus with these countries increased by $387.1 million. UNITED STATES.

There was a decrease in average contract prices for exported products as a whole by 2%, which is explained by the fall in global prices for certain types of raw materials – oil, ferrous metals. At the same time, prices for goods imported by the republic decreased by 1.4%. At the same time, trade with the CIS countries recorded an increase in prices for a number of industrial goods, including building bricks, mineral fertilizers, televisions, lumber.

According to the Ministry of Statistics and Analysis, the positive balance of foreign trade in services in Belarus in 2002 amounted to $546.5 million. This is 1.3 times the same figure for 2001. The increase in the surplus was facilitated by the fact that export growth was ahead of imports for all items of basic services.

Exports of services amounted to 1218.9 million dollars last year. USA, having increased by 20.3% compared to 2001, including in the CIS countries – by 25.9% and in countries outside the CIS – by 17%.

The largest share in the total volume of exports of services (57.8%) is occupied by transport services, the volume of which reached 691.4 million dollars. AND increased by 10.1%. Exports of business services increased by 49.3% and amounted to $253.6 million. In addition, exports of public services (royalties, license fees, computer and information services) increased significantly (by 30.6%), the volume of which amounted to $ 24.3 million last year. UNITED STATES.

The volume of imports of services in 2002 reached $672.4 million. USA, which is 11.6% more than in 2001. From countries outside the CIS imported services by 9.2% more, imports of services from countries outside the CIS increased by 14%.

The main trading partners of the Republic of Belarus in 2002 are presented in table 4.

Table 4.

The main trading partners in foreign trade
of the Republic of Belarus in 2002