Current situation and

potential effects of trade

liberalization between EU

and EAEU

Diana Galoyan

EAEU benefits

� First, the EU is the largest trade partner

for Armenia, Russia and Kazakhstan:

more than one half of the Russian

Federation's trade volume is attributable

to the EU; and Russia, in turn, is the

European Union's third largest trade

partner.

� Second, the EU could play the decisive

role in modernizing the countries in the

Eurasian integration project.

EU Benefits

� The EAEU has a large market for theexport of EU manufactured goods andfood products (over 184 mln people)

� The EAEU is a source of cheapresources (oil, gas, coal, lumber, metals,etc.) which is very important for keepingthe EU economy competitive in theglobal market.

� The EAEU has a relatively high-qualifiedlabor force.

Volume Indices of GDP of EAEU

85

90

95

100

105

110

115

2010 2011 2012 2013 2014 2015 2016 2017

EAEU

Armenia

Belarus

Kazakhstan

Kyrgyzstan

Russia

EAEU trade

0

50

100

150

200

250

300

350

400

450

500

EU

IntraEAEU

EUEA member state import

structure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Armenia Belarus Kazakhstan Kyrgyzstan Russia

33,7

57,642,7 41,6

8

21

19,3

19,66,7

35,6

45,3

23,137,7

51,7 56,4

Other

EU

EAEU

EUEA member state Export

structure

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Armenia Belarus Kazakhstan Kyrgyzstan Russia

26

52

10,9

30,2

9,7

28,4

26,6

50,2 13,8

36,2

45,6

21,6

38,9

56 54,1

Other

EU

EAEU

Neighborhood benefits

� The three Baltic states: An increase ofexports to the EAEU by 80%. GPDgrowth by 1.2% to 1.8%.

� Poland: An increase of exports to theEAEU by 70%. GPD growth by 0.5%.

� Ukraine: An increase of overall exportsby 26%. GPD growth by 5%.

� Moldova: real GDP per capita inMoldova would increase by 6.3%

FK coefficient

Country Export FK coefficient of

Armenia

Import FK coefficient of

Armenia

Russia 0.08 0.49

Belarus 0.10 0.50

Kazakhstan 0.07 0.55

EU 0.14 0.50

FK � 1 � 12� Xia∑ � Xia �Xib∑ �Xib

�

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Conclusion

� creation of a free trade zone will allow theEuropean Union to have privileged access toan important export market.

� the abolition of duties under the free tradeagreement between the EU and the EAEU inshort term might not have a positive effect,

� the establishment of EU – EaP – EAEUnegotiation platform might help to findcommon and mutually acceptableapproaches to such issues as technicalregulations, customs procedures and rules oforigin.

Thank you