ECU, top the list of products whose exports went up the most, reflecting a trade diversion effect from competitive external sources and toward Russia. The estimated increases are mainly the result of changes in tariffs charged to third countries targeting the Belarusian and Kazakh markets, since in 2008 tariffs imposed on Russian products were already zero in all chapters, and remained so throughout the period analyzed.

Russia’s exports to Kazakhstan increased the most in value terms—equivalent to $205.4 million—after the latter adopted the CET. This increase accounts for 1.6 percent of Kazakhstan’s total imports from Russia relative to 2008. It is worth noting that the top five trading partners whose exports to Kazakhstan increase the most are all CIS members (Table 5). Meanwhile, the 15 countries—9 of them EU members— whose exports to Kazakhstan drop the most, due to trade diversion resulting from Kazakhstan’s adoption of the CET, together account for 87.5 percent of total decreases in import values. Moreover, the EU-27 as a whole suffers 34.5 percent of the total decrease; the other six countries are China, the United States, Turkey, the United Arab Emirates, the Republic of Korea, and Japan (Table 6).

The outcome for Russian exports destined for Belarus is different: total Belarus imports from Russia are predicted to drop by net $11.8 million (0.05 percent of Russian exports to Belarus in 2008). This is a result of tariff decreases for third countries after Belarus adopted the CET: trade formerly diverted to Russia because of the CIS Free Trade Area (FTA). Conversely, Belarusian imports from China are predicted to increase the most in value terms ($7.28 million, about 0.5 percent of total imports from China in 2008). Among the top 15 trade partners whose exports to Belarus increase the most because of the CET, only Uzbekistan and Moldova are members of the CIS; six are EU countries (Table 7). At the same time, the 15 countries—7 of them EU members—that see the largest drop in exports to Belarus together account for 45.4 percent of the total decrease in Belarus import value (Table 8). Georgia is likely to see the largest drop: its exports to Belarus will go down by $2.5 million (22 percent of its exports to Belarus in 2008).

Apart from the specific effects on Russian exports to the rest of the ECU to provide a context, it is worth looking at some general results for imports after Belarus and Kazakhstan adopted the CET.

For Kazakhstan, using tariff data for 2008 and 2012, the change in the total import value is measured against a 2008 baseline of $35.4 billion, from which imports from all partners are simulated to have declined to $34.6 billion (2.3 percent) as a result of adopting the CET (combined with Kazakhstan’s negotiated exceptions to it). Welfare losses arose from a $71.4 million decline in consumer surplus. As adoption of the CET replaced the MFN tariffs Kazakhstan had applied in 2008, it appears that there was a decrease in imports for 65.9 percent of Kazakhstan’s product lines and an increase for 5.5 percent, with trade unchanged for 28.6 percent. For products affected by a tariff increase between 2008 and 2012, the trade-weighted average tariff increased by 6.0 percentage points from 3.8 to 9.7 percent. Ten of the top 20 products whose import values dropped are meats; 5 are vehicles for the transport of people; and 2 relate to pneumatics. Meanwhile, for products whose tariffs were reduced, trade-weighted average tariffs went down by 2.9 percentage points, from 6.5 to 3.6 percent. Five of the top 20 products whose import values went up are meats and other edible animal products and another 4 are types of furniture.

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