The European Union wants sanctions, but how much trade is really with Belarus?

The European Union wants sanctions, but how much trade is really with Belarus?

EU member states want quickly to impose economic sanctions on Belarus for the arrest of journalist Roman Protasevic. He was on a flight between European Union countries Greece and Lithuania, when Belarus forced the plane to land and was arrested.

Ursula von der Leyen, president of the European Commission, said the sanctions should include airlines and Belarusian companies funding the system. But how much trade is with Belarus and what kind of products and companies are we talking about?

Second business partner

The European Union accounts for just under 20 percent of trade in goods between Belarus and abroad. Last year, the European Union imported about 3.9 billion euros from Belarus and exported about 6.2 billion euros.

This makes Belarus the second trading partner in the European Union. By far the largest trading partner is neighboring Russia, which accounts for about half. By the way, we should not expect any sanctions from Russia: the country is defending the work of Belarus.

State-owned enterprises

A large part of the Belarusian economy and exports are in the hands of state-owned enterprises. According to the Belarusian Statistical Office, this represents about a third of total exports in 2019.

If the European Union bans trade with all state-owned enterprises in Belarus, it will soon be over one billion euros that Belarus will miss. And perhaps more, because the exports of state-owned enterprises in Belarus have increased significantly recently.

IKEA supplier

The main Belarusian exports to the European Union are wood products such as furniture, fuel and metal products. The wood is largely exported by the state-owned company Bellesbumprom. This has recently benefited from a lack of timber. The Belarusian state news agency says exports at Bellesbumprom increased by about 15 per cent in the first two months of this year to more than 90 million euros.

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Among other things, IKEA is said to import furniture from Belarus. According to the Swedish newspaper Dagens Nyheter, 7 percent of all wood used in IKEA furniture comes from Belarus.

Previous call to boycott

Mineral exports are also largely in the hands of a state-owned company: BMZ. There, too, went well with exports. In the first four months of this year, it rose by 23 per cent to around 350 million euros.

The SOEs are closely linked to the regime of President Lukashenko, who has been in power for more than a quarter of a century. NOS spoke in March with a former BMZ employee, who was fired after participating in a demonstration.

The FNV union has already called for an end to trade with Belarusian state-owned companies that cooperate in suppressing trade unions and pro-democracy groups in the country. The independent trade union movement in Belarus also supports this call.

Belarus becomes a pariah

In addition to trade sanctions, the European Union also imposes air sanctions. On Monday, airlines were already called on to stop flying over and into Belarus. KLM, Air France, and Lufthansa, among others, responded.

In addition, Belarusian airlines will soon be banned from European airspace and airports. Belavia will be severely affected by this.

According to Jaap de Witt, an aviation economist, the measures are making Belarus a pariah. “It is difficult to reach the country and this has economic consequences.” Belarus also loses the fees it receives to enter its airspace. According to Eurocontrol, the European air traffic control organization, the fee amounted to 85 million euros in 2019.

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Weak economy

“So far, the sanctions against Belarus have not been aimed at weakening the economy, also because you don’t want to affect the population too much,” says Bob Dean of the Center for Russia and Eastern Europe at the Clingendael Institute.

“But now the European Union wants to hit Lukashenko so hard in his wallet that continuing to misbehave becomes too costly for him. However, it is very difficult to do it well; and you also want to avoid putting Belarus in the arms of Belarus. Russia is floating.”

According to Dean, sanctions against certain state-owned companies could work out over time. “Then Lukashenko would be deprived of income in foreign currency. This could put pressure on the Belarusian ruble and the state budget. He could not just sell products that he could not sell to the European Union to Russia.”

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