Moldovan exports to European Union reach record level

Chisinau, 7 April /MOLDPRES/ - Economic commentary by MOLDPRES State News Agency:

Moldova's exports to the European Union have increased by 67.3 per cent in the first two months of 2015, whereas the Commonwealth of Independent States (CIS) member countries’ share fell below 20 per cent.

European market becomes increasingly  open for Moldovan goods, in the conditions when Russia has almost completely closed the market for one of its formerly loyal partners in 2014, and its share fell to a half. Because of bans, Russia has dropped to the third position among the main trade partners of Moldova for the first time ever over the past 20 years.

“The decrease in overall exports is triggered, to a great extent, by the reduction of deliveries to Russia and Ukraine. Russia seems to fall into recession and, at the same time, maintenance of restrictions on some categories of Moldovan products causes drop in export to this market. Ukraine is in deep economic downturn and it is obvious that the export to this country will decrease,” Programme Director of Expert Grup Centre Alexandru Fala has told MOLDPRES.

The situation from 1998-1999 seem to be repeated, when following a regional financial crisis, the exports from Moldova to the Russian market decreased from over 60 per cent to 30-35 per cent and never got back to pre-crisis level.

In this situation, producers were forced to reorient themselves to other markets, and the temporary entrance into force, starting from 1 September 2014, of the Deep and Comprehensive Free Trade Agreement gave them good opportunity to take advantage of. The tendencies of growth of Moldovan exports to the markets of the EU states are maintained, despite the crisis affecting Moldova.

The Moldovan products’ supplies to the European market increased by 6.7 per cent in the first two months of 2015, according to the National Statistics Bureau (BNS). The exports to the Romanian market rose by 18.4 per cent, to the UK – by 69.5 per cent, and deliveries of Moldovan goods to the Netherlands increased by 93.3 per cent. Two of the EU countries – Romania and Italy – have went up to the first two positions among the trade partners of Moldova, under the BNS.

BNS data shows that, in the first two months of 2015, Moldova exported goods amounting to 210 million dollars to the EU, which accounts for over two-thirds of all Moldovan exports.

The forecasts by experts anticipating an increase in exports to EU in 2015 have been confirmed. "We estimate a reduction exports and imports by 5 per cent and 3 per cent, respectively, in 2015 against 2014. The quota of exports to the EU will register further growth. Diversification of exports will get a more ascendant trend and will be carried out not only in the West and East geographical directions”, the Viitorul IDIS centre’s experts said.

Moldova has a huge export potential, and in order to turn it to good account, it is important that the economic agents should know European market penetration conditions, Head of EU Delegation to Moldova Pirkka Tapiola said. He noted that there were several levels of reform which need to be implemented in Moldova to get closer to the EU market; and first of all, Moldovan economic agents have to understand the EU trade rules. Improve the quality of goods to European standards. The second stage of the project, "Free Trade Agreement with EU, Capacity Building of Economic agents” was launched in February 2015, in order to reduce this handicap."

“The greatest vulnerability of our products against the European ones is not only quality. We have very good and quite competitive products on foreign markets. It is true that we still have to work to apply quality standards, but not primarily.  We are less good in terms of packing, labeling and presenting,” Deputy Prime Minister, Economics Minister Stephane Bride said.

The figures of the first two months are optimistic, and it should be taken into account that, over the last three months of 2014, the exports to the EU market were slightly dropping, although a 9.6-per cent increase was recorded throughout the year. This was the only sales market which ended the year in the positive.

“The export to the EU is relatively slowly growing and only partially compensates decrease in deliveries on eastern markets”, Fala said.

Statistics for the first two months of 2015 confirm expectations in terms of the evolution of foreign trade to EU, as well as the forecasts by the Economics Ministry and experts for this year. The overall exports decreased by 12.7 per cent and the imports by 22 per cent in the first two months of 2015. The Economics Ministry forecasts a drop in exports by 10 per cent and of imports by 15 per cent this year.