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Trade impact of non-tariff trade costs. An Assessment of the Customs Union of Russia, Belarus and Kazakhstan

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  • Mkrtchyan Arevik

Abstract

The recently established Eurasian Customs Union of Russia, Belarus and Kazakhstan has generated considerable research interest. Using a rich panel data, this paper analyses the impact of the common external tariff and changes in non-tariff trade barriers on bilateral trade patterns. Tariff increases have expected negative impact on the trade ows. The Customs Union abolished the customs controls between the members in two stages. This allows to estimate the effect of border elimination which is particularly strong for intra-CU trade. As tariff changes faced by non-members are already accounted for, this growth can be attributed to reduced trade costs, that is, not driven by trade diversion due to tariff changes. The paper explores the unexpected and sudden creation of the CU and specificities in the timing of removing the internal customs controls. This allows to estimate the border effects directly instead of being inferred from the difference between intra-country and inter-country trade as it is typically done in the literature.

Suggested Citation

  • Mkrtchyan Arevik, 2013. "Trade impact of non-tariff trade costs. An Assessment of the Customs Union of Russia, Belarus and Kazakhstan," EERC Working Paper Series 13/14e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:13/14e
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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