Effects of Trade Wars on Belarus

Abstract

This paper looks at the effects of the trade wars that followed 2014 events in Ukraine on Belarus. The estimation of the model predicts the increase in trade flow through Belarus and thereby the increase in its tariff revenue. Because of the ban on imports imposed by Russian Federation, its tariff revenue declined. Being a part of Eurasian Customs Union (EACU), Belarus needs to participate in the tariff revenue redistribution. The need to participate in the tariff revenue redistribution and the decline in the tariff revenue of Russian Federation led to the decrease in the after-redistribution tariff revenue of Belarus and its welfare. This paper estimates the decrease in the welfare of Belarus. Also, it evaluates the change in the redistribution schedule of EACU that Belarus should argue for.