Eurasian Integration Yearbook 2012

Viktor Ivanter, Valery Geets, Vladimir Yasinskiy, Alexander Shirov,and Andrey Anisimov. “The Economic Effects of the Creationof the Single Economic Space and Potential Accession of Ukraine”Customs Unionand the Single Economic SpaceUnion. This assumes the reciprocal lifting of customs duties between Ukraineand the EU countries. At the same time, the SES countries are expected toestablish customs duties for Ukraine at the levels that are used in trade withEuropean countries. Ukrainian exports to the EU are forecasted to grow by 10%and imports from the EU by 15%.The trade turnover between the SES countries and Ukraine is forecasted todecrease by approximately 2.5%. Compared to the baseline scenario, thisoption forecasts lower economic growth for Russia, Kazakhstan and Belarus,triggered by a decline in exports to Ukraine. Ukrainian GDP is also expected tobe lower than in the baseline scenario because of a reduction in exports to theSES countries and a growth in imports from the EU, which is expected to exceedthe increases in exports to the EU (see Table 1.7).The main adverse effects on the Ukrainian economy are expected to be causedby:• a reduction in the aggregate exports of mechanical engineering products;• the impossibility, because of limited industrial capacity, to accelerategrowth in production and in the export of metallurgical, chemical andagricultural products;• continued dependence on the importation of energy commodities from theSES countries, in a situation characterised by the low price elasticity ofconsumption; in other words, expenditures of the Ukrainian economy onenergy resources are expected to grow significantly.Russia 2015 2020 2025 2030Export 0 0 0 0Import 0 0 0 0GDP 0 0 0 0Kazakhstan 2015 2020 2025 2030Export 0 0 0 0Import -0.02 -0.01 -0.02 -0.01GDP 0 0 0 0Belarus 2015 2020 2025 2030Export 0 0 0 0Import 0 -0.03 -0.03 -0.03GDP 0 0 0 0Ukraine 2015 2020 2025 2030Export -0.19 -0.08 0.09 0.27Import 4.22 4.03 3.83 3.54GDP -1.28 -1.22 -1.03 -0.94Table 1.7.Change in keymacroeconomicindicators comparedto the baselineoption(scenario envisioningUkraine’s joining theEU FTA;% of baselinevolumetric indicators)Source: Calculationsby IEF RASEurasian Development Bank31