WELLINGTON, July 23 (Xinhua) -- The resumption of talks on a New Zealand-Russia free trade agreement (FTA) is likely to be further postponed after the downing of Malaysia Airlines flight MH17 over the Ukraine, a Russian economist in New Zealand said Wednesday.
The negotiations suspended due to the crisis in Crimea earlier this year would "not restart any time soon," Massey University Associate Professor Sasha Molchanov said in a statement.
New Zealand exports to Russia were fairly modest at about 260 million NZ dollars (225.63 million U.S. dollars) a year, or 0.5 percent of overall export volume, and New Zealand was unlikely to impose bilateral trade sanctions as other nations were considering, said Molchanov.
However, the crash and its repercussions for the bilateral FTA would be a blow to exporters eyeing the Russian market.
"Even though export volumes are currently small, they had been growing consistently until the eruption of tensions between Russia and Ukraine. The future of that export growth is now in jeopardy," Molchanov said.
Exporters to politically-risky countries always faced the prospect of their operations being compromised by an adverse political event, but the situation in Ukraine and Russia was " particularly severe."
"One way to measure the severity of a political crisis is by the number of nations involved and that number has increased dramatically in the wake of this crash," he said.
The crash could also affect New Zealand's economy if ensuing volatility affected the global equity and exchange rate markets.
"Because risk sentiment is strong and the New Zealand dollar is a high-yielding currency, it may experience a drop in demand," he said.
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