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Russian food embargo and the lost trade

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  • Angela Cheptea
  • Carl Gaigné

Abstract

We analyse the impact of the Russian food embargo on European and Russian trade patterns using a triple-difference estimation strategy. We quantify the effects on the value of trade, the trade price of products covered by the ban, and the new trade flows generated by the ban. Our results point to an average e 125 million loss in monthly EU28 exports to Russia due to the ban (with Lithuania, Poland, and Germany bearing the largest losses). However, only 45% of the drop in EU28 exports of banned products to Russia would be due to the ban. In addition, EU products banned from the Russian market were sold elsewhere at lower prices. The reorientation of EU exports to other markets translated into selling larger amounts to old trade partners, as well as in accessing new markets. EU member states were unevenly affected by the ban. Germany and Poland compensated their large losses on the Russian market by a strong increase in exports to other trade partners (mostly intra-EU), at the expense of other EU countries, such as France and Denmark.

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  • Angela Cheptea & Carl Gaigné, 2018. "Russian food embargo and the lost trade," Working Papers SMART 18-05, INRAE UMR SMART.
    • Handle: RePEc:rae:wpaper:201805
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    Cited by:

    1. Mario Larch & Jeff Luckstead & Yoto V. Yotov, 2021. "Economic Sanctions and Agricultural Trade," CESifo Working Paper Series 9410, CESifo.
    2. Anne‐Célia Disdier & Carl Gaigné & Cristina Herghelegiu, 2023. "Do standards improve the quality of traded products?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1238-1290, November.
    3. Matthieu Crozet & Julian Hinz, 2023. "Blowback: The Effect of Sanctions on Democratic Elections," Working Papers hal-04150484, HAL.
    4. Daria Loginova & Stefan Mann, 2022. "Institutional contributions to agricultural producer price stability," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-22, December.
    5. Korhonen, I., 2019. "Sanctions and Counter-Sanctions - What Are their Economic Effects in Russia and Elsewhere?," Journal of the New Economic Association, New Economic Association, vol. 43(3), pages 184-190.
    6. Wendkouni Jean‐Baptiste Zongo & Bruno Larue & Carl Gaigné, 2023. "On export duration puzzles," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 453-478, March.
    7. Maximilian Koppenberg & Martina Bozzola & Tobias Dalhaus & Stefan Hirsch, 2021. "Mapping potential implications of temporary COVID‐19 export bans for the food supply in importing countries using precrisis trade flows," Agribusiness, John Wiley & Sons, Ltd., vol. 37(1), pages 25-43, January.
    8. Jing Fu & Guangji Tong, 2024. "Status of Sino–Russian Trade in Agricultural Products: Dual Consideration Based on Characteristics and Growth," Sustainability, MDPI, vol. 16(2), pages 1-20, January.
    9. Hayakawa,Kazunobu & Kumagai,Satoru, 2022. "The trade effect of economic sanctions: evidence from the 2022 Russia-Ukraine conflict," IDE Discussion Papers 857, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Mario Larch & Jeff Luckstead & Yoto V. Yotov, 2021. "Economic Sanctions and Agricultural Trade," CESifo Working Paper Series 9410, CESifo.
    11. Crozet, Matthieu & Hinz, Julian, 2023. "Blowback: The effect of sanctions on democratic elections," Kiel Working Papers 2246, Kiel Institute for the World Economy (IfW Kiel).
    12. K. A. Morachevskaya & E. A. Lyzhina, 2021. "Are the Food Embargo and Import Substitution Changing Regional Production? A Case Study of Leningrad Oblast," Regional Research of Russia, Springer, vol. 11(4), pages 502-512, October.
    13. Carl Gaigné & Karine Latouche & Stéphane Turolla, 2020. "Compétitivité internationale du secteur agroalimentaire français : c’est quoi le problème ?," Post-Print hal-03346304, HAL.
    14. Iikka Korhonen, 2020. "Economic Sanctions on Russia and Their Effects," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 20(04), pages 19-22, January.
    15. Loginova, Daria, 2022. "Assessing the Short-term Effect of Exchange Rate Liberalisation on Food Import Prices: The Regression Discontinuity in Time Employed for Russian Food Markets in 2014," Research on World Agricultural Economy, Nan Yang Academy of Sciences Pte Ltd (NASS), vol. 3(3), September.
    16. Vincent Chatellier, 2021. "Review: International trade in animal products and the place of the European Union: main trends over the last 20 years," Post-Print hal-03718326, HAL.
    17. Daria Loginova & Judith Irek, 2022. "Russian meat price transmission and policy interventions in 2014," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 10(1), pages 1-28, December.

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    More about this item

    Keywords

    international trade; Russian embargo; trade diversion;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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