The Russian ban on EU agricultural imports: A bilateral extension of AGLINK-COSIMO
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Type On August 6 2014 the Russian Federation introduced a one year ban on imports
into the Russian Federation of agricultural products, raw materials and food,
originating from selected countries including the EU. This paper provides an initial
assessment of the potential impact of this import ban on EU agricultural markets.
Furthermore it provides an insight in the shifting trade patterns and price effects at
EU, Russian and world level. We use the Aglink-Cosimo model, a recursive partial
equilibrium model of the agricultural sector. Its gross trade specification is
problematic for the study of bilateral trade. Therefore the model was extended with an
ad hoc incorporation of bilateral trade. The initial results show that the impact for the
EU remains rather limited as the EU can divert a considerable part of its trade with
Russia to other markets. The impact on the Russian market is however expected to be
considerable as imports can't be easily substituted and domestic production has
problems to expand productions significantly within the timeframe of the ban.