Abstract
With the implementation of the Russian import ban as a countermeasure to the EU sanctions in the context of the Ukrainian crisis, trade relations between the EU and Russia reached their lowest level in 2014. In this paper, we model several trade policy scenarios and assess their effects on domestic agricultural production and trade in Russia, the EU and Germany for the 2020-30 period. The results of the applied general equilibrium MAGNET model suggest that the removal of the Russian food import ban will affect Russian agricultural production to a limited extent only, while there will be no effect on the EU. In contrast, depending on how competitive Russian farmers’ become, the creation of a large free trade area from Lisbon to Vladivostok would generally benefit farmers in the EU more than farmers in Russia.
Highlights
Trade relations between Russia and the European Union (EU) have been tense for years
This study investigates the economic effects of the abolition of the Russian import ban on agricultural products and food and the creation of a free trade area between the EU and Eurasian Economic Union (EAEU) (Lisbon-Vladivostok initiative) within four model scenarios
Our results indicate a slight decline in the production of agricultural products in the EU28 and Germany, which were previously affected by the Russian food import ban (Figure 2)
Summary
Trade relations between Russia and the European Union (EU) have been tense for years. Among the EU Member States, Germany was one of the countries that could potentially lose the most from the Russian trade policy, as it accounted for 14% of the total EU agri-food exports to Russia (in value terms in 2013). This number was higher for pork exports with Germany having a leading position, accounting for 24% of total EU pork exports to Russia, as well as for cheese exports, with Germany accounting for 14% of total cheese exports and ranking second right behind the Netherlands (UN COMTRADE, 2017)
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