The Expanding Japan–Russia Trade Comes from the Russian Far East

|Russia

With the restoration of diplomatic relations between Japan and the USSR being realized via the Soviet—Japanese Joint Declaration of October 1956, and the “Soviet—Japanese Commerce and Navigation Treaty” and the “Soviet—Japanese Payments Agreement” being concluded at the end of the following year of 1957, Japan—USSR trade took off. For the trade in 1958, with exports from Japan at US$18 million and Japan’s imports at US$22 million, the total of imports and exports was US$40 million, yet fifty years later the trade between Japan and Russia outshone that at US$20 billion, and appears to be taking giant leaps toward the US$30 billion-mark.

Japan’s imports have not changed greatly from Soviet times down to today, with marine products, lumber, coal, and non-ferrous metals comprising the major part thereof, and all were products of the Russian Far East. According to the customs clearance statistics on the Japanese side for the nine months from January to September 2007, exports from Japan increased 52% to US$7.71 billion, and imports 66% to US$7.39 billion, compared to the same period of the previous year; and in the total of imports and exports, at US$15.1 billion, there was an increase of 58.5% on the same period for the previous year, and as of this point in time exceeds the US$13.7 billion for the whole of 2006.

What is characteristic here is that great changes can be seen in the commodities Japan imported and exported. In the imports for the nine months from January to September 2007, crude oil increased rapidly, setting a record of US$2.25 billion, ranking first among imported commodities, and attained a share of 30.5%. The crude oil imports for the same period of the previous year were no more than 4% at US$170 million, and from this it can be seen that they have rapidly increased.

What is characteristic here is that great changes can be seen in the commodities Japan imported and exported. In the imports for the nine months from January to September 2007, crude oil increased rapidly, setting a record of US$2.25 billion, ranking first among imported commodities, and attained a share of 30.5%. The crude oil imports for the same period of the previous year were no more than 4% at US$170 million, and from this it can be seen that they have rapidly increased.

While crude oil from Sakhalin II is being imported in meager amounts in the six-month production period outside of the frozen period, in the case of Sakhalin I the crude oil export terminal completed in autumn 2006 has entered into full production, and is considered to have contributed to the large increase in crude oil imports. In the case of Sakhalin II, when the pipeline is completed at the end of 2008, year-round export will become possible, and the volume of Japan’s crude oil imports will increase further.

Meanwhile, from the end of 2008 on, when LNG exports from Sakhalin II will have been readied, imports based on long-term contracts with Japanese electricity and gas companies will come to be undertaken in the future without interruption over the long term, and the schema of Japan’s imports vis-à-vis Russia will change greatly.

Japan’s energy supply source to date has grown to depend heavily on the “southern route”, but in the future with the addition of a “northern route”, the increasing diversification of resources will become a reality, and the resources of the Russian Far East will make a great contribution in the area of energy-security.

[Translated by ERINA]