FREE TRADE AGREEMENT BETWEEN THE EAEU AND INDONESIA: WHO WILL BENEFIT ?

Abstract

The  conclusion  of  bilateral  free  trade  agreements  (FTAs)  in  the  21st  century  continues  to  be  an important trend of international economic relations. The countries of the Eurasian Economic Union also  joined  these  processes  by  concluding  FTAs  with  Vietnam,  Iran,  Singapore  and  Serbia. The Eurasian Economic Commission has initiated a feasibility study of signing an FTA with the next partners: Indonesia and Mongolia. This article discusses the likely consequences of the conclusion of  an  FTA  with  Indonesia.  The  authors  analyze  the  similarities  and  differences  between  our economies and the extent of their complementarity. A review of the structure and some trends of mutual trade is carried out. The article provides estimates of the possible quantitative effects of the liberalization  of  trade  in  goods  between  the  three  key  EAEU  countries  (Russia,  Belarus  and Kazakhstan) and Indonesia. The authors use the partial equilibrium model SMART (from the WITS toolkit) and the calculations of budget losses in the case of mutual zeroing of import duties based on the  International  Trade  Center  database  (Trademap.org).The  probable  consequences  of liberalization for the main sectors of mutual trade are calculated. Conclusions are made regarding the economic feasibility of liberalizing trade in goods between the EAEU and Indonesia.