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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.

Suggested Citation

  • Angela Cheptea & Carl Gaigné, 2018. "Russian food embargo and the lost trade," Working Papers SMART - LERECO 18-05, INRA UMR SMART-LERECO.
  • Handle: RePEc:rae:wpaper:201805
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    References listed on IDEAS

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    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
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    6. Kaspar Oja, 2015. "No milk for the bear: the impact on the Baltic states of Russia's counter-sanctions," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 15(1), pages 38-49.
    7. Dreger, Christian & Kholodilin, Konstantin A. & Ulbricht, Dirk & Fidrmuc, Jarko, 2016. "Between the Hammer and the Anvil: The Impact of Economic Sanctions and Oil Prices on Russia’s Ruble," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 295-308.
    8. Peter Havlik, 2014. "Economic Consequences of the Ukraine Conflict," wiiw Policy Notes 14, The Vienna Institute for International Economic Studies, wiiw.
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    More about this item

    Keywords

    international trade; Russian embargo; trade diversion;

    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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