Study report Free trade with Russia could bring benefits to the EU

Editor: Rosemarie Stahl

Germany – A free trade agreement of ​​the European Union with Russia and other countries could bring economic benefits to both sides. This is the result of calculations by the Institute for Economic Research Ifo.

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"A free trade agreement could be an integral part of a new strategic partnership between the EU and Russia," said Gabriel Felbermayr, head of the Ifo Center for Foreign Trade.
"A free trade agreement could be an integral part of a new strategic partnership between the EU and Russia," said Gabriel Felbermayr, head of the Ifo Center for Foreign Trade.
(Source: Ifo Institute)

A deep agreement between the EU and the Eurasian Economic Community for Germany could lead to an increase in real per capita income of 0.2% or € 91 per year. For Russia, the increase could be as much as 3%, or 235 per capita per year. "The benefits of these advantages are very good," said Gabriel Felbermayr, head of the Ifo Center for Foreign Trade, at a conference at the Ifo Institute entitled "Common Economic Space from Lisbon to Vladivostok".

Felbermayr admitted: "As long as the Ukraine conflict is not adjusted, a free trade agreement is hardly imaginable. However, such a pact could be an integral part of a new strategic partnership between the EU and Russia. "

For Germany, a free trade agreement with Russia and the other countries of the Eurasian Economic Community and a growth of exports could lead to € 31bn. However, there are negative trade reversal effects of € 9bn. This is because additional Russian exports to the EU, for example of metal products, would replace German exports there. Other countries in the EU could also benefit.

The model calculation suggests that Russia 's exports to the EU will grow by around € 71bn, and that Russian exports to the rest of the world will also be revived, as the availability of more favorable machinery and upstream products from the EU will increase Russian competitiveness. This would also benefit the markets of third countries. Overall, Russian exports are expected to rise by around € 77bn. Other countries of the Eurasian Economic Community could benefit from such an agreement. The study was commissioned by the Bertelsmann Foundation.

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