Possible Economic Consequences of a Trade Agreement Between the Customs Union and the European Union

摘要

In this work we analyze the possible economic consequences of a free trade agreement that would suppose bilateral zero import tariffs between the Customs Union (CU) and European Union (EU). This analysis is carried out by using the general equilibrium model Globe vl. We estimate the effect that creation of a free trade area could have on the economies of member countries at the level of both the full economy and individual sectors. We analyze the sensitivity of our results to changes in the model's parameters. We show that, in both relative and absolute terms, Russia has potentially more to gain from this agreement than the EU. The CU would see positive gains overall, but the benefits and costs would be distributed unevenly among its members.