Economic Effects of Free Trade between the EU and Russia
AbstractThis study simulates the economic effects of eastern enlargement of the EU and an EU-Russian free trade area. The main emphasis of the paper is on the effect this would have on the Russian economy. The simulations were carried out with a GTAP computable general equilibrium model, using the most recent GTAP database 6.0 beta, which takes the former Europe agreements between the EU-15 and the eight new Central and Eastern European member states into account. The results confirm the earlier findings that a free trade agreement with the EU is beneficial for Russia in terms of total output but not necessarily in terms of economic welfare when measured by equivalent variation. The main reason behind this is the deterioration that would occur in Russiaâs terms of trade. Improved productivity in Russia would, however, make the free trade agreement with the EU advantageous.
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Bibliographic InfoPaper provided by The Research Institute of the Finnish Economy in its series Discussion Papers with number 969.
Length: 14 pages
Date of creation: 2005
Date of revision:
Other versions of this item:
- Pekka Sulamaa & Mika Widgrén, 2005. "Economic Effects of Free Trade between the EU and Russia," Economics Working Papers 036, European Network of Economic Policy Research Institutes.
- F15 - International Economics - - Trade - - - Economic Integration
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-CIS-2006-01-29 (Confederation of Independent States)
- NEP-EEC-2006-01-29 (European Economics)
- NEP-INT-2006-01-29 (International Trade)
- NEP-TRA-2006-01-29 (Transition Economics)
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