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Possible Economic Outcomes of a Trade Agreement with the European Union

Author

Listed:
  • Alexander Knobel

    (Gaidar Institute for Economic Policy)

  • Bekhan Chokaev

    (RANEPA)

Abstract

This paper investigates the possible economic effects of Russia-EU free trade agreement, implying a mutual zero import tariffs in the trade of the Customs Union and the EU. Analysis of the effects is made using CGE Globe v1 model. We estimate the impact of an FTA on the economies, both at the level of the entire economy and at the industry level. The sensitivity analysis is made. It is shown that, in both relative and absolute terms, Russia potentially more benefits from the agreement than the EU. The cumulative gain of the CU is strictly positive, but the benefits and costs are unevenly distributed among its members, with negative effect for Belarus.

Suggested Citation

  • Alexander Knobel & Bekhan Chokaev, 2014. "Possible Economic Outcomes of a Trade Agreement with the European Union," Working Papers 0107, Gaidar Institute for Economic Policy, revised 2014.
    • Handle: RePEc:gai:wpaper:0107
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    More about this item

    Keywords

    Customs Union; European Union; Free Trade Agreement; CGE;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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