20/2/17: CESIfo on Potential Gains from EU-EEC Trade Agreement

An interesting study from German’s CESIfo on the potential impact of a Free Trade Agreement between the EU and the Eurasian Economic Community: http://www.cesifo-group.de/de/ifoHome/publications/docbase/details.html?docId=19267749.

Top of the line conclusions:

  • EU side: “According to Ifo’s research results, a comprehensive agreement between the EU and the Eurasian Economic Community could lead to a 0.2 percent increase in real per capita income in the EU, corresponding to an annual EUR 91 upturn in per capita income.” Of these, 31 billion euros in benefits are expected to accrue to Germany (net impact for Germany will be 22 billion euros due to increased Russian exports to Germany.
  • Russian side: “For Russia this increase could be as high as three percent or EUR 235 per year. “These income gains stem from the fact that the economic structures on all sides are highly complementary.” Of these some EUR 71 billion is expected to come from increased exports from Russia to the EU states. Additional EUR 6 billion in exports increases will come from rising efficiencies in Russian trade outside the EU.
  • Key obstacles: “A free trade agreement is barely conceivable as long as the Ukraine conflict remains unsettled. Such a pact could nevertheless form an integral part of a new strategic partnership between the EU and Russia”