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Possible Economic Effects of CU—EU Free Trade Agreement

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  • Bekkhan Chokaev
  • Aleksandr Knobel

Abstract

This paper investigates the possible economic effects of free trade agreement, implying a mutual zero import tariffs in the trade between the Customs Union (Russia, Belarus, Kazakhstan) and the European Union. Analysis of the effects is made using CGE 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 benefits from the agreement more than the EU. The cumulative gain of the CU is strictly positive, but the benefits and costs are unevenly distributed among its members.

Suggested Citation

  • Bekkhan Chokaev & Aleksandr Knobel, 2014. "Possible Economic Effects of CU—EU Free Trade Agreement," EcoMod2014 7026, EcoMod.
  • Handle: RePEc:ekd:006356:7026
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    Keywords

    Russia; General equilibrium modeling (CGE); Trade and regional integration;
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