nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2008‒02‒23
two papers chosen by
Anna Y. Borodina
Perm State University

  1. The Impact of EU Enlargement on Economic Restructuring in Russia and Future Relations between Russia and the European Union By Svetlana; Natalia Kulikova
  2. The Consequences of WTO Accession for Belarus By Kiryl Kurilionak; Stanislav Vassilevsky; Vitaly Medvedev

  1. By: Svetlana; Natalia Kulikova
    Abstract: Russia is shown to have every reason to seek special consideration of, as well as express its concerns over, the impact of the European Union¿s (EU) eastern enlargement. The latter relate, in particular, to the current and expected negative repercussions of the changes in the political and economic situation in Europe. Closer study of crucial EU enlargement issues arising as a result of the new member states (NMS) having shifted to the EU common customs tariffs and preferential systems, their adoption of the EU foreign trade regime and the standardization of cargo transit rules and regulations applicable across the EU-25 as a whole demonstrate the need for a comprehensive approach to EU enlargement. That would make for a better understanding of the multifaceted and controversial impact that enlargement will have on the economic transition and industrial restructuring processes in Russia. As the EU penetrates more deeply into the markets of the countries of Central and Eastern Europe, Russia's share in bilateral and multilateral trade as well as other joint economic activities could be reduced still further. Russia is trying to promote its own specific vision of European integration based on two pillars: the European Union in the West and Russia-initiated integration models in the East (e.g. a Single Economic Space). By taking that route, Russia could retain its political and economic influence in those post-Soviet European countries, where its strategic interests lie. The EU subscribes to a markedly different approach. In late 2002 it began pursuing its European Neighbourhood Policy (ENP) that was specifically aimed at the eastern neighbours of the enlarged EU. It has demonstrated its growing political and economic engagement with those CIS member states that are now part of the ENP. The ENP transmits a clear message to Russia; it clearly signals the European Union's specific interests and objectives in Eastern Europe. The policy is quite explicit; it reveals that the EU intends to discuss all issues directly with the counties concerned, while the mediation of Moscow is totally or mostly ignored. As a result, a conflict of interest is becoming increasingly apparent in Eastern Europe, with the EU adhering to its ENP and Russia promoting its integration model. Numerous indicators of the state of relations between Russia and the EU show that however important it may be, economic cooperation is increasingly fraught with ambiguity and competition, which, in the final analysis, can but have a negative impact on the efficiency of that joint relationship.
    Keywords: economic restructuring, trade integration, EU¿Russia relations, Russia, EU enlargement
    JEL: F14 F15 F59 L60 P52
    Date: 2007–03
  2. By: Kiryl Kurilionak; Stanislav Vassilevsky; Vitaly Medvedev
    Abstract: In this paper we consider the possible consequences that accession to the World Trade Organization (WTO) bears for Belarus. Our approach is based on partial equilibrium. We have applied a method of locating specific 'sensitive' points in the economy and treating them as separate items: specific elements in the economic system on which WTO access will have an appreciable impact. Our research focuses on Belarusian manufacturing. We first determine possible changes in access to foreign markets associated with the cancellation of discriminatory non-tariff, antidumping and other restrictive measures introduced by WTO members. Total losses to the Belarusian manufacturers are currently estimated to be of the order of USD 230-250 million a year. Lifting those barriers will constitute the immediate short-term benefits to Belarus on accession to the WTO. In order to assess the short-term impact of WTO accession on Belarusian manufacturing, the scenario used assumed a reduction of tariffs, complete removal of discriminatory measures and a lowering of market barriers to Belarusian exports. A quantitative assessment was made of the gains and losses by manufacturing branch, followed by a simple sensitivity analysis. The latter revealed the Belarusian manufacturers' ability to withstand increased import competition up until such time as the requisite restructuring measures have been introduced. Summary conclusions are drawn for each branch in the light of those findings. One section of the paper focuses on the implications for Belarus of the Russian Federation's accession to the WTO. Consideration is given to the possible impact on Belarusian exports to the Russian market. The analysis shows, however, that Russia's joining the WTO does not incur the risk of Belarus losing its share of the Russian market. In the final section, consideration is given to state support for agriculture and the development of service markets, with a discussion on possible forms of, and limits to, liberalization. The final conclusion is that liberalizing the imports of certain items is very much in line with the need to revise the current structure of trade specialization in Belarus. Import liberalization should not be seen simply as a trade-off for the non-discrimination of Belarusian exports. If the economy of Belarus is to benefit, the country must pursue a consistent policy of cutting back or closing down those manufacturing activities that are unlikely to evolve into internationally competitive industries. Liberalization of the domestic market in the wake of WTO accession must be in keeping with: (a) the financial viability of specific industries; and (b) the need to provide in a manner compatible with WTO rules and regulations additional protection to those industries with high value-added that are of strategic importance to the country¿s future development.
    Keywords: international trade, WTO accession, manufacturing, services, agriculture
    JEL: F1 F42 F53 L6 L8 O24
    Date: 2007–01

This nep-cis issue is ©2008 by Anna Y. Borodina. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.