Lebanon exploring new trade opportunities with Russia

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Russian ambassador to Lebanon Alexander Zasypkin (R) and Lebanese politician Fares Soueid (L) attend a conference on how to improve Lebanese-Russian economic ties. Al-Akhbar/Marwan Tahtah

Published Saturday, November 15, 2014

An official delegation made up of Lebanese Economy Minister Alain Hakim, Trade Minister Hussein Hajj Hassan, and 32 representatives from the Lebanese private sector will be leaving for Russia on Sunday. The goal of the visit is to “open up” trade relations with Moscow and reach an agreement on removing barriers to Lebanese exports.

Not too long ago, it became evident that there were opportunities to enter the Russian market, despite the fact that this massive market was far from Lebanon's usual trade map. Lebanese exports to Russia in the past had been negligible, reaching $7.1 million in the past year, or 0.17 percent of total exports. On the other hand, Russian exports to Lebanon were estimated at $900 million. Therefore, it was clear that the Russian market was not being tapped into because of Lebanese merchants and industrialists’ reluctance to explore it due to what they had heard about complications in dealing with the Russian government.

Regional circumstances have created an opportunity for countries like Lebanon, Morocco, Turkey, China, and Iran. They all turned their bearings towards Russia after Moscow decided to impose a total ban on food products from the EU, the US, Canada, Australia, and Norway on August 7. The ban is expected to last a whole year, and includes dairy products, beef, pork, poultry, fruits, vegetables, and nuts.

This situation created "an excellent opportunity which might not happen again," according to former Lebanese minister Adnan al-Qassar in a workshop held by the Investment Development Authority in Lebanon (IDAL) yesterday, under the title, "Exporting to Russia."

However, according to IDAL chairperson Nabil Itani, total food exports to Russia are in the $40 billion figure, which raised questions about the aspirations of those in charge of the issue in Lebanon. If Lebanon's share is no more than 1 percent of Russian foreign imports, or around $400 million, this would amount to around 10 percent of total Lebanese exports.

Russian ambassador to Lebanon Alexander Zasypkin expressed hope about the sustainability of Lebanese relations with Russia after it abandoned the European market. "Russia needs to reconsider many issues, including economic and trade relations," he explained. "The relationship with Lebanon is traditional, but today we have the opportunity to take a qualitative leap, which would not be temporary but last for a long time."

So, what are the obstacles to exporting to Russia? Russian-Lebanese Business Council chair Jack Sarraf claimed that what is being said about such obstacles is not true, especially in terms of the currency used by the Russian private sector; the type of transportation; and the quantity of products traded.

"The merchants and the industrialists know that there are two transport lines under consideration. The first is in the sea and the other in the air,” he said. “Thus, the matter relates to the cost of each for the procurement orders signed by Lebanese exporters. As for the currency, the payments will be in dollars and euros, and the matter has been settled. Lebanese exporters are required to abide to yearly contracts and relatively higher prices compared to other markets. Then, the profits will be good."

(Al-Akhbar)

This article is an edited translation from the Arabic Edition.

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