BRUSSELS, Aug. 12 (Xinhua) -- The current sanctions war between the European Union (EU) and Russia, while showing limited impact so far, can escalate to affect not only both sides but also other trade partners, an expert told Xinhua in an interview.
Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE), said that while current sanctions have a limited impact on EU producers, "it is likely to grow as sanctions get tougher."
The Swedish economist expressed concern over the growing risks tougher sanctions may place on the energy sector.
Russia last week imposed a full ban on food imports from the EU, United States and some other Western countries in response to sanctions over Ukraine. Russia has been a key export market for EU agriculture products, consuming a third of EU exports of pork, cheese and butter.
The EU has set up a task force to evaluate potential losses to its agricultural sector and aims to find solutions to compensate its producers.
Erixon saw little chances of sanctions being lifted with the Ukraine crisis deepening. "The most likely scenario is continued reinforcement of sanctions from both the EU and Russia," he added.
"What would really affect EU producers are Russian energy suppliers cutting exports to Europe," Erixon said, adding that certain eastern EU states would especially worry about energy security if Russian sanctions spread to the energy sector.
"In the short term, the effect of any further Russian sanctions on gas prices would be moderate. But there are some economies in Eastern Europe that are highly dependent on the supply of Russian gas," he said.
The EU is heavily dependent on Russia, from whom it imports a third of its oil needs, 39 percent of gas and 26 percent of solid fuels, according to official EU statistics. Furthermore, six EU countries depend on Russia for 100 percent of their gas imports.
Erixon said the sanctions war between the EU and Russia is likely to push both sides to seek alternative trade partners to meet domestic needs and boost local exports in the short term.
However, he warned that "as the Russian economy reduces imports, it will affect every exporter to Russia."
Erixon saw potential risks for the finance and high-tech equipment sectors as well.
"There is no substitute that can give Russia access to comparable goods and services as they are currently getting from the United States and the EU. Financial sanctions on Russia will have an affect because it is costly to find other alternatives," he said.
MOSCOW, Aug 11 (Xinhua) -- Russia is going to develop cooperation with other countries and defend its positions in the World Trade Organization (WTO) despite the sanctions imposed by the United States, Kremlin said Monday.
"The U.S. threatens to impose sanctions over nearly any action Russia undertakes. But this would not tame Moscow's moves to develop cooperation with other countries," spokesman Dmitry Peskov told reporters.Full Story