The economics of customs unions in the Commonwealth of Independent States

Abstract

In the aftermath of the breakup of the Soviet Union, trade among the new independent states collapsed. To help reestablish interstate trade, the 12 members of the Commonwealth of independent States (CIS) established a Free Trade Area. More recently, four members of the CIS -Belarus, Kazakstan, the Kyrgyz Republic, and Russia- agreed in principle to establish a Customs Union. The authors analyze the economic implications for potential members of establishing such a Customs Union. They conclude that the dynamic effects of the Union (and the Free Trade Area) are likely to be negative, because they would tend to be mixed but would be more harmful to countries that have already established relatively liberal trade regimes with lower average and less-differentiated tariffs than the common external tariff contemplated by the proposed Customs Union.Common Carriers Industry,Environmental Economics&Policies,Rules of Origin,Economic Theory&Research,Trade Policy,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Regional Integration,Environmental Economics&Policies,Economic Theory&Research,Trade Policy