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The economic impact of the Russian import ban: A CGE analysis

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  • Kutlina-Dimitrova, Zornitsa

    (DG Trade)

Abstract

The aim of this paper is to assess the economic impact of the Russian embargo from 7 August 2014 on certain agricultural food products from the EU, the USA, Norway, Canada and Australia. The effects of this economic sanction are analysed in the framework of a computable general equilibrium (CGE) model with a particular focus on bilateral and total exports, production and welfare. The detailed, based on real trade data, calibration of the model allows for an exact identification of the sectoral shares and prohibitive tariffs aggregated to match the CGE model’s sectoral level of aggregation. In addition, the paper carries on a validation exercise to compare the model’s predictions with real trade data developments. The modelling simulation results show that the impact of the ban on total exports of the EU, the USA, Norway, Canada and Australia are limited. Total extra-EU exports decline by merely 0.12%. Nevertheless at a disaggregate level there are sectors – ‘vegetables and fruits’, ‘other meat’ and ‘dairy products’ – which experience two digit percentage change declines.

Suggested Citation

  • Kutlina-Dimitrova, Zornitsa, 2015. "The economic impact of the Russian import ban: A CGE analysis," DG TRADE Chief Economist Notes 2015-3, Directorate General for Trade, European Commission.
    • Handle: RePEc:ris:dgtcen:2015_003
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    Cited by:

    1. Baležentis, Tomas & Sun, Kai, 2020. "Measurement of technical inefficiency and total factor productivity growth: A semiparametric stochastic input distance frontier approach and the case of Lithuanian dairy farms," European Journal of Operational Research, Elsevier, vol. 285(3), pages 1174-1188.
    2. Zamani, Omid & Chibanda, Craig & Pelikan, Janine, 2021. "Investigating Alternative Poultry Trade Policies in the Context of African Countries: Evidence from Ghana," 2021 Conference, August 17-31, 2021, Virtual 315173, International Association of Agricultural Economists.
    3. Massiani, Jerome, 2019. "CGE Analysis of Mega Events: A Timely Issue," Conference papers 333109, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Banse, Martin & Duric, Ivan & Götz, Linde & Laquai, Verena, 2019. "From the Russian food import ban to free trade from Lisbon to Vladivostok - will farmers benefit?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 12(4), pages 20-31.
    5. Meyers, William H. & Schroeder, Kateryna G., 2016. "Commodity markets and trade to 2025: What is driving these changes?," 155th Seminar, September 19-21, 2016, Kiev, Ukraine 245172, European Association of Agricultural Economists.
    6. Sigit Perdana & Marc Vielle & Maxime Schenckery, 2022. "European Economic impacts of cutting energy imports from Russia : A computable general equilibrium analysis," Post-Print hal-03887431, HAL.
    7. Rodnyansky, Alexander & Goetz, Daniel, 2020. "Exchange Rate Shocks and Quality Adjustments," CEPR Discussion Papers 15248, C.E.P.R. Discussion Papers.
    8. José M. Rueda-Cantuche & Tamas Revesz & Antonio F. Amores & Agustín Velázquez & Marian Mraz & Emanuele Ferrari & Alfredo J. Mainar-Causapé & Letizia Montinari & Bert Saveyn, 2020. "Improving the European input–output database for global trade analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-16, December.
    9. Бородин К.Г., 2018. "Оценка Влияния Продовольственного Эмбарго И Экономических Санкций На Товарные Рынки (На Примере Рынков Мяса)," Журнал Экономика и математические методы (ЭММ), Центральный Экономико-Математический Институт (ЦЭМИ), vol. 54(4), pages 41-59, октябрь.
    10. 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.
    11. Jurkėnaitė, Nelė & Djuric, Ivan, 2018. "Impact of the Russian trade bans on Lithuanian pork sector," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 40(4), pages 481-491.
    12. Bayramov, Vugar & Rustamli, Nabi & Abbas, Gulnara, 2020. "Collateral damage: The Western sanctions on Russia and the evaluation of implications for Russia’s post-communist neighbourhood," International Economics, Elsevier, vol. 162(C), pages 92-109.
    13. Nguyen, Trung Thanh & Do, Manh Hung, 2021. "Impact of economic sanctions and counter-sanctions on the Russian Federation’s trade," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 267-278.
    14. Anna Vladimirovna Stupnikova, 2018. "Spatial Reaction of Prices in the Vegetable Markets to Restrictions on Foreign Trade," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 117-137.
    15. Klomp, Jeroen, 2020. "The impact of Russian sanctions on the return of agricultural commodity futures in the EU," Research in International Business and Finance, Elsevier, vol. 51(C).
    16. 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.
    17. Amzul Rifin & Feryanto & Herawati & Harianto, 2020. "Assessing the impact of limiting Indonesian palm oil exports to the European Union," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-13, December.
    18. Lenka Rumankova & Elena Kuzmenko & Irena Benesova & Lubos Smutka, 2022. "Selected EU Countries Crop Trade Competitiveness from the Perspective of the Czech Republic," Agriculture, MDPI, vol. 12(2), pages 1-31, January.
    19. Tsion Taye Assefa & Miranda P.M. Meuwissen & Cornelis Gardebroek & Alfons G.J.M. Oude Lansink, 2017. "Price and Volatility Transmission and Market Power in the German Fresh Pork Supply Chain," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 861-880, September.
    20. Zamani, Omid & Chibanda, Craig & Pelikan, Janine, 2020. "Tariff Escalation and Import Bans in the Economic Partnership Agreement between the EU and West Africa," Conference papers 333239, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    21. Livia Cebotari, 2021. "The impact of the Sanctions and Counter Sanctions on the Russian and EU Member States Economies," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 24(82), pages 56-66, December,.
    22. Hyytiä Nina, 2020. "Russian Food Import Ban – Impacts on Rural and Regional Development in Finland," European Countryside, Sciendo, vol. 12(4), pages 506-526, December.

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    More about this item

    Keywords

    International trade; Agri-food embargo; CGE modelling; Russia;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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