The economic logic behind the creation of the Eurasian Economic Union: A gravity model estimation

Sammanfattning: This paper estimates the impact of the processes of the Eurasian integration in the post-Soviet space that led to the creation of the Eurasian Economic Union (EEU) in 2015 over the exports of the member countries and their main partners outside the EEU and its predecessor, the Customs Union (CU). Applying the gravity model technique over the dataset for 1995-2015 obtained from UNESCAP Trade Analytics, it is possible to determine the influence of the CU membership of both exporter and importer countries over the exports of the former after controlling for all the economic, cultural and logistical independent variables and two different types of estimation (OLS and Poisson estimator). The results indicate that this factor is significant in its influence, boosting exports on average by 87% and 38.9% (before accounting for tariff protection) depending on the type of estimation. When tariff protection is included, those figures go down to 67% and 29% respectively, which allows to conclude that positive effects for exports of the exporting country when both it and the importer are CU members should be attributed in the proportion of 75% to the non-tariff measures. This finding is in line with the expectations that membership of the EEU had at its start in 2015, when the main underlined benefits were related to a massive regulatory harmonization in a vast number of sectors.