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Trade decoupling from Russia

Author

Listed:
  • Borin, Alessandro
  • Conteduca, Francesco Paolo
  • Di Stefano, Enrica
  • Gunnella, Vanessa
  • Mancini, Michele
  • Panon, Ludovic
Abstract
We use a general equilibrium trade model to quantify the welfare cost of decoupling from Russia. We find that a doubling of non-tariff barriers imposed by the West on Russian imports and exports of all goods would decrease Russian welfare by 4.8% and would have a relatively small effect on Western welfare. We show that the welfare cost of decoupling is amplified by supply chains and that restrictions on Russian energy, especially oil, matter quantitatively. Finally, we find that welfare losses generated by restrictions actually applied by the West in the aftermath of the 2022 Russian invasion of Ukraine account for around 80% of those obtained in our decoupling scenario.

Suggested Citation

  • Borin, Alessandro & Conteduca, Francesco Paolo & Di Stefano, Enrica & Gunnella, Vanessa & Mancini, Michele & Panon, Ludovic, 2023. "Trade decoupling from Russia," International Economics, Elsevier, vol. 175(C), pages 25-44.
    • Handle: RePEc:eee:inteco:v:175:y:2023:i:c:p:25-44
    DOI: 10.1016/j.inteco.2023.05.001
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    References listed on IDEAS

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    Cited by:

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    2. Hayakawa,Kazunobu & Kumagai,Satoru, 2024. "Trade Effects of the Russia–Ukraine Conflict: Can Neutral Countries Really Fish in Troubled Waters?," IDE Discussion Papers 944, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    3. Francesco Paolo Conteduca & Simona Giglioli & Claire Giordano & Michele Mancini & Ludovic Panon, 2024. "Trade fragmentation unveiled: five facts on the reconfiguration of global, US and EU trade," Questioni di Economia e Finanza (Occasional Papers) 881, Bank of Italy, Economic Research and International Relations Area.
    4. Michael Reiter & Christian Kimmich & Elisabeth Laa & Daniel Schmidtner & Adrian Wende & Klaus Weyerstraß, 2024. "Auswirkungen von Energiepreisen auf Österreichs Exportwirtschaft," FIW Research Reports series y:2024:m:05, FIW.

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    More about this item

    Keywords

    Decoupling; Trade restrictions; Energy; International trade; Global value chains;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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