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Economic Effects of Free Trade between the EU and Russia

by Pekka Sulamaa / Mika Widgren
01 May 2005

Economic Effects of Free Trade between the EU and Russia

Pekka Sulamaa / Mika Widgren

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European Network of Economic Policy Research Institutes (ENEPRI) Working Paper No. 36, 18 pages

This study simulates the economic effects of eastern enlargement of the EU and an EU-Russian free trade area. The main emphasis of the paper is on the effect this would have on the Russian economy. The simulations were carried out with a GTAP computable general equilibrium model, using the most recent GTAP database 6.0 beta, which takes the former Europe agreements between the EU-15 and the eight new Central and Eastern European member states into account. The results confirm the earlier findings that a free trade agreement with the EU is beneficial for Russia in terms of total output but not necessarily in terms of economic welfare when measured by equivalent variation. The main reason behind this is the deterioration that would occur in Russia’s terms of trade. Improved productivity in Russia would, however, make the free trade agreement with the EU advantageous.


About the Authors


  • Author
    Pekka Sulamaa
    Pekka Sulamaa
  • Author
    Mika Widgren
    Mika Widgren
Economic Effects of Free Trade between the EU and Russia
Download Publication

3331 Downloads