Romania growing paramount for Moldovan trade. Info-Prim Neo economic commentary

The last report of the National Statistics Bureau comes to confirm the more and more influential position Romania has in Moldova’s foreign trade, and experts thinks it could get even more powerful, if the growing of the last several months pace keeps on. Despite cold political attitudes of both countries, Romania has been the main destination of the Moldovan exports for the last 8 months and is ranked the second among the countries Moldova imports from. "Romania has become this year one of the most important partners in Moldova’s foreign commerce," Economy Minister Igor Dodon stated recently. Moldova’s exports toward the Romanian market were up 1.8 the last 8 months. It’s far the greatest hike among the first ten partner countries in terms of exports. With a total amount of $226.1 million, Romania accounts for 21.6% in the Moldovan exports and the first position in terms of sales markets for Moldovan goods, overcoming the Russian Federation, which although gradually resuming the import of wines, yields more and more ground to Bucharest. In three years only, the deliveries of Moldovan goods to Romania almost doubled on the background of a trend of growth above the average, and in the first 8 months of this year, after a record push forward, the deliveries exceeded the 2007 level. How may this growth be explained? After Romania joined the European Union, on January 1, 2007, as the Free Trade Agreement ended, experts would believe that, as the agreement was over, the trade between the two countries would fall, although after becoming a neighbor with the EU, the Moldovan market has become more and more attractive for foreign companies, especially for the ones preferring the outsourcing. Many companies having had contracts in Romania switched their commissions to companies in Moldova, profiting from cheap labor and, as a consequence, they can set lower prices. Thus, according to data of the Statistics Bureau, if, in the first quarter of 2007, some 32.1% of the exports to Romania were goods produced from the client’s raw material, in the first quarter of 2008, their ratio jumped to 55.7%. Romanian managers of companies with foreign capital started to compete more and more with companies from Italy, UK, Belgium, Turley, Slovakia who had entered the Moldovan market before others, so 55-90 % of the Moldovan exports towards those countries were processed goods in 2007. With a ratio of 36.9% last year Romania was just beginning its expansion towards this market sector. “Moldova is very well situated geographically, being very close to the EU border, at an hour drive by car. And everybody says that in the future everything will be produced in China, which is very far away from the EU, Moldova is right at the EU’s threshold,” stated the British Ambassador to Chisinau, John Bayer, at the a National Forum “Preferential Export: Business Opportunities with EU countries”. Last year, 86.4% of the Moldovan deliveries to the British market were processed goods. The statistics also tell of a change of the categories of goods exported from Moldova to the Romanian market. If a year ago the traditional food and textiles were prevailing, in 2008, for the first time in the export to Romania, the first place is held by value added goods – machinery, devices and electric equipment (cables and wires), which accounted for 25% of the total in the first half of the year. Also the apparel and footwear held an important share. The fact that as from March 1, 2008, the EU grants Moldova the autonomous trade preferences (ATP) also counted enormously in stepping up the trade with the closest neighbor from the EU. “Because of the ATP, Moldova has recuperated its traditional markets especially in Romania and Bulgaria,” recently stated Iurie Munteanu, a deputy Minister for Economy and Trade. Romania climbed the second among the countries Moldovan imports from. For the last 8 months, the Romanian exports grew 59.9%, reaching $415.2 million (12.8% of Moldova’s imports). It’s the largest hike recorded by the first five most important trade partners of Chisinau and much more than the levels reached by Ukraine, Russia, Germany or Italy. The main imports from Romania were the mineral fuels, oils, machinery, devices, equipment and vehicles. With a quota of 37.5%, Romania was, in the first half of 2008 according to the Statistics Bureau, the main supplier of energy resources, especially gasoline and diesel fuel. Matters related to the economic relationships between the two countries will be discussed on October 22-23, 2008, in Bucharest, by the Moldovan-Romanian Inter-Governmental Committee of Economic Cooperation and European Integration. Its last sitting was two years ago, and it’s absurd to further neglect a partner becoming paramount.