School of Law, Narsee Monjee Institute of Management Studies,

Bengaluru

OPINION PIECE: International Trade Law

Submitted by:
Parichaya Reddy Baddam
SAP ID: 81021219018
Course: BBA, LL.B (Hons.)
Year & Semester: IV Year, VIII Semester

Submitted to:
Prof.Sneha Priya ma’am
(Professor for International Trade Law)
PROJECT TITLE: Discuss the implications of the Russia-Ukraine war for
global trade and development

In my opinion, sanctions are weapons of mass destruction. Economic sanctions, like

conventional weapons of mass destruction, have the potential to devastate people's lives and
property. In addition to causing global suffering, the war between Russia and Ukraine has
damaged global trade and development.
Albert Einstein once said, "Peace cannot be kept by force; it can only be achieved by
understanding." The one-year anniversary of Russia's invasion of Ukraine is marked on
February 24, 2023. The biggest impact of the war has been felt on the global economy. The
global economy has suffered the impact of the war, which led to major economic disruption.
The ongoing conflict between Russia and Ukraine has major ramifications for the global
economy, which is just recovering from the stress of the COVID-19 pandemic. Global
supply chains had been completely disrupted for two years because of the pandemic. The
global economy was trying to recover when, right at the moment, Russia declared war on
Ukraine, which led to a major economic disruption, specifically in the oil and food markets.
This is where the biggest hit was felt because Russia is a major oil supplier, and such large-
scale warfare has created chaos in the oil market and in the financial markets, similarly with
essential commodities like food and other essential supplies. Essential food prices have shot
up since the war began in February 2022, including a lot of commodities, whose prices also
increased. Both Russia and Ukraine are major producers and suppliers of essential food
items such as wheat, corn, soybeans, sunflower seeds, sunflower oil, etc. They also export a
number of other goods that are seen as critical and essential in the global economy. These
supplies were massively hit; even food shipments were hit because the war that broke out in
the Black Sea was directly affecting the food shipments. The war was affecting poor
countries and developing countries in Africa and Asia; it was leading to food insecurity, and
global food prices had shot up. The poor people around the world were getting affected.
The rise in food commodity prices has triggered inflationary tendencies around the world,
and this has a spillover effect across the economy. The war has also caused disruption in the
oil market, which has caused a major spike in oil and gas prices because Russia is a major
supplier of oil to many countries in Europe, including two big economies like China and
India. Russia is a major supplier of natural gas specifically to Europe during the winter
season, especially many European countries depend on Russian gas for heating purposes.
Russian gas is absolutely essential for European countries. The Nord Stream pipeline
project between Germany and Russia was a crucial project. Nord Stream Pipeline 1, which
was implemented in 2011, was supplying natural gas to Germany and Europe, and Russia
had gained a dominant position in the European energy market. In fact, stream pipeline
number two was also proposed, and construction had begun between Germany and Russia.
As the war began, Germany cancelled the project, quit the North Stream initiative, and even
targeted Russia with sanctions. There has been a clear attempt to push Europe away from its
dependency on Russian energy. This Of course, will lead to a huge economic disruption in
the global oil and gas markets, and countries like India, which are importing oil and gas,
will take a very big hit as prices shoot up because of the volatility. We'll have to pay more,
thus increasing our import bills and pushing up our deficits. But anyhow, India managed to
bypass the sanctions and bought discounted oil and gas from Russia. Because of the war,
growth would slow down and inflation would go up all over the world.
Even though India only has a small amount of direct exposure, supply disruptions and the
Current terms of trade will affect the growth of the Indian economy. This could also cause
inflation to rise. The model developed by the UN advised that if the war lasted longer, then
30% of the world's population would be living in poverty. The war is also likely to have a
big effect on the trade of automotive sector. If there is still a shortage of semiconductors,
chips, and other rare earth metals then the problems in the industry are likely to get even
worse. Also, there are a lot of companies in Ukraine that make these parts. The ongoing war
between Russia and Ukraine will affects the stock market, the exchange rate, and the prices
of crude oil and natural gas. It is expected that inflation will get worse, which will make it
harder for the common man as it reduces his purchasing power.