The process of integrating Russia into the world economy has, to put it mildly, been just the slightest  bit problematic. The country's WTO accession took a mind-boggling 18 years to complete, and its membership has already beenplagued with numerous trade disputes and other kinds of recrimination. Russia has a reputation for having sharp elbows in international negotiations, and its experience in trade negotiations has been no different.

However, despite the litany of high profile political problems, behind the scenes Russia really was rapidly becoming a part of the global capitalist system. After limping along in the mid 1990's and bottoming out after the horrific 1998 debt default, Russia's foreign trade surged to a level that would have seemed beyond all reckoning when it first made the transition from state socialism

I would be so bold as to suggest that Russia's experience with foreign trade matches its performance in many other economic spheres: while the headlines were unremittingly negative ("WTO agreement delayed" "Trade disputes multiply") the reality was a lot more positive. Foreign trade, of course, doesn't fix all problems, but a Russia that was trading more with the outside world was vastly preferable to a Russia that was economically isolated. In fact one of the things that made the initial transition to capitalism so wrenching was that trade between Russia and its post-Soviet neighbors (which had formerly comprised a unified economic space) completely collapsed. The recovery of economic exchange between Russia and Ukraine, Kazakhstan, Belarus, and other former union republics was a vital part of the entire region's rise from the ashes of shock therapy.

Unfortunately, the ongoing crisis in Ukraine has wrecked havoc on trade flows. This is hardly shocking. Armed conflicts, and the chaos and instability that they inevitably spawn, will always have hugely negative impacts on trade, investment, and overall economic activity. It was self-evident that Russia would suffer some sort of economic damage when the tanks started to roll and the helicopters started to fly in Eastern Ukraine. The magnitude of this harm, however, is surprising. Rosstat just released fresh data, showing that Russia suffered an 11.4% decline in foreign trade comparison to March 2013 (to be precise, exports shrank by 12.7% and imports declined by 9.4%).

Now a more than 10% decline in foreign trade, on its own, a pretty big deal. Trade flows are variable, but not to such a dramatic extent. But while the decline is noteworthy on its own, when you compare it to the trajectory that Russia was on it become even more stark and glaring. In the span of just a few months, Russia went from experiencing extremely rapid growth in foreign trade to suffering an absolute decline. That is just one data point among dozens showing that what's happening in Ukraine is a major break with past experience and that Russia, in many ways, is currently in uncharted economic waters.

If and when the (still worsening!) crisis in Ukraine is resolved I would expect that Russian imports and exports would swiftly rebound. The problem isn't that Russia is becoming structurally resistant to foreign trade, it isn't yet conducting an old-school attempt at "import substitution," merely that short-term political factors have dramatically exacerbated instability. The longer the crisis in Ukraine drags on, however, the greater the economic damage to Russia will be.

Russia needs to maintain a high level of exports in order to balance the books (the Federal budget is famously reliant on oil revenues) and it needs to import a wide variety of sophisticated industrial goods. If it isn't exporting energy and importing industrial machinery, then its economy isn"t doing as well as it could. Keep that in mind the next time you hear that the Russians are "winning."