OREANDA-NEWS. August 08, 2014. The economy is showing signs of an increased reorientation towards the EU market. In the first five months of 2014, the exports to EU countries grew by 22.5 per cent, while shipments to the Commonwealth of Independent States (CIS) countries dropped by 18.8 per cent, said experts from the Expert Group Independent Analytical Centre in the new issue of the Realitatea Economica (Economic Reality) publication.

As a result, 53.8 per cent of Moldovan exports went to the European market and only 31.8 per cent towards CIS. The export destinations distribution was "more balanced" against the same period of 2013. As much as 44.8 per cent of Moldovan goods were delivered to the EU and, respectively, 39.9 per cent to the CIS, said the experts.

According to the experts, it is worthy of note that 65 per cent of the product categories exported by Moldova in January-May were on the rise. This is a high enough share, if taking into account that the overall growth was of only 2 per cent.

Thus, the losses due to 35-per cent cut backs in exports of alcoholic beverages and soft drinks (because of restrictions imposed by Russia) are compensated by substantial increases in exports of other goods, on which Moldovan producers have comparative advantages.

Experts believe that "in the near future, economic policies should support trends of changing the line of work and reorientation of the Moldovan economy, along with the compensation, in the short term, exporters’ losses to the Russian market."

While supporting industries orienting themselves towards the EU market can be done based on passive policies (for example removing administrative barriers and constraints), backing branches suffering losses as a result of restrictions imposed by Russia requires active intervention policies.

The publication’s authors do not exclude that there may be quality problems in domestic products exported to the Russian market. However, they add, those restrictions were mainly of political origin; therefore, the government should take some responsibilities and identify direct and indirect steps to compensate the exporters’ losses (at least for the first two years, till the exploration of alternative sales markets).

Russia banned the imports of fruits and canned goods from Moldova on 21 July. On the other hand, the European Union said it would double the duty free export quotas negotiated within the Deep and Comprehensive Free Trade Agreement starting from 1 August. Duty-free export quotas for apples will be raised from 40,000 to 80,000 tons, and from 10,000 to 20,000 tons for plums and grapes.