Kyrgyzstan and the Eurasian Economic Union: Trade Diversion in Specific Markets

Abstract

The aim of this study is quantitative evaluate the possible trade creation and trade diversion effects of Kyrgyzstan’s accession to the Eurasian Economic Union by the example of three commodities which are rice, particle board and uncoated paper and paperboard. This research belongs to the ex-ante camp of studies, since it attempts to estimate the abovementioned effects before the country’s accession to the Union. The paper employs the SMART model designed by the World Bank and UNCTAD specialists to evaluate to effects of the in country’s trade policy changes, in particular, trade creation and trade diversion effects, effect on tariff revenues, welfare effects as well as total trade effect of a trade policy. Overall, the tariff change simulation results are driven by the trade diversion effect in the observed markets.