EU-Enlargement and Beyond: A Simulation Study on EU and Russia Integration

Pekka Sulamaa and Mika Widgrén

No 356, Discussion Papers from VATT Institute for Economic Research

Abstract: This paper examines the economic effects of the opening of the Russian Federation. The analysis carried out in the paper is two-fold. First we simulate the impact of the eastern enlargement of the EU and, second, we analyse how deeper integration between the EU and Russia contributes to this. The analysis is carried out with GTAP computable general equilibrium model. We find that there is a trade-off between the two roads of European integration arrangements. Eastern enlargement seems, even in its very deep form, be beneficial for all EU regions without causing substantial welfare losses outside the Union. EU-Russia integration, on the other hand, has different impact. To be beneficial for Russia free trade between the EU and Russia requires improved productivity in the latter, which may be due to better institutions or increased FDI. This might make the negotiations of the agreement cumbersome and if agreed its implementation difficult.

Keywords: Integration; Free Trade Agreement; GTAP; EU; Russia; Economic growth; Taloudellinen kasvu; International comparisons; Kansainväliset vertailut; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka (search for similar items in EconPapers)
Date: 2004
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-cmp, nep-eec, nep-int and nep-tra
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Citations: View citations in EconPapers (11)

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https://www.doria.fi/handle/10024/148333

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Journal Article: EU-Enlargement and Beyond: A Simulation Study on EU and Russia Integration (2004)
Working Paper: EU Enlargement and Beyond: A Simulation Study on EU and Russia Integration (2004)
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