The economic impact of the Russian import ban: a CGE analysis

The aim of this paper is to assess the economic impact of the Russian embargo from 7 August 2014 on certain agricultural food products from the EU, the USA, Norway, Canada and Australia. The effects of this economic sanction are analysed in the framework of a computable general equilibrium (CGE) model with a particular focus on bilateral and total exports, production and welfare. The detailed, based on real trade data, calibration of the model allows for an exact identification of the sectoral shares and prohibitive tariffs aggregated to match the CGE model’s sectoral level of aggregation. In addition, the paper carries on a validation exercise to compare the model’s predictions with real trade data developments. The modelling simulation results show that the impact of the ban on total exports of the EU, the USA, Norway, Canada and Australia is limited. Nevertheless at a disaggregate level there are sectors – ‘vegetables and fruits’, ‘other meat’ and ‘dairy products’ – which experience two digit percentage change declines.