Trade , Border Effects , and Regional Integration between Russia ’ s Far East and Northeast Asia (original) (raw)
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External & Intraregional Interactions of the Russian Far East: Comparative Assessment
IOP Conference Series: Materials Science and Engineering
This paper argues that East Asia is becoming an increasingly important trade partner for Russia due to the need of the latter to diversity its external economic relations. The Russian Far East (RFE) shares a long border with the countries of NorthEast Asia, and its economic development is largely determined by the scale of cross-border economic activity. We use regional and international data to evaluate the trade relations of RFE with domestic and foreign markets over a ten-year period. The results indicate that RFE regions trade more intensively with the domestic economy than with adjacent countries. Over the entire sample period, RFE regions faced lower border hurdles in their trade with the rest of Russia than with the three Northeast Asian countries. In other words, trade between RFE and Russia was subject to a tariff equivalent of 44% relative to the trade within RFE. By contrast, the cost of trade with Northeast Asia was 57% higher than intraregional RFE trade. These tariff equivalents were not constant over time. In the years 2004-2010, border effects were higher with NEA again recording barriers that raised costs by 67%. In the period after 2010, barriers have decreased. In the case of NEA, the decline was 20 percentage points, while for Russia it was half that amount. We found that for RFE barriers have been on the decline but apparently the border costs in trade with NEA have been falling more drastically than with Russia.
Trade Relations Between the Russian Far East and Northeast Asia: Assessment of Institutional Factors
2020
The present study assesses the extent of institutional barriers to trade between the Russian Far East (RFE) and Northeast Asian countries by decomposing the overall costs of cross-border trade. The results indicate that the duties imposed by Russia on RFE exports are the main determinant of tariff hurdles between RFE and Northeast Asia. The institutional barriers between RFE and China are shown to have decreased, while those with Japan have increased. Over the 2002–2017 period, institutional impediments to trade between RFE and China halved, whereas those between RFE and Japan almost doubled. The findings suggest that, in terms of mitigating institutional barriers, there was a divergence between almost all RFE regions and Japan, and convergence with China and South Korea. For most RFE regions, institutional barriers with China have decreased, indicating a general convergence of the RFE economy with China. In general, China has inevitably emerged as an intermediary and an indispensab...
Regional Research of Russia, 2020
Due to the considerable distances from the major sales markets of Russia, the Far East has close ties with markets of the countries in the Asian-Pacific region (APR). The current expansion of trade and economic interactions with these countries has a positive effect on the economic development of the Far East. Reducing various barriers to trade with the APR countries can increase the scale of bilateral trade, acting as a source of growth and development for the economy of the Far East. To determine the ranges for increasing trade, the potential for trade interactions arising from the leveling of various barriers was quantified. It is shown that for the Far East a gradual change in the intensity of foreign trade relations was observed in favor of geographically close foreign markets, the Asia-Pacific countries. Based on the constructed gravity dependence, trade barriers for interactions between the Far East and Asia-Pacific countries were estimated and decomposed into the ad valorem ...
Trade Potential and Trade Integration of the Russian Far East: A Regional Perspective
Spatial Economics
Over the past decade, the Russian government has embarked on an ambitious program of economic development in the Russian Far East (RFE), envisioning the transformation of the region into a hub for trade with the Asia Pacific. This paper explores the extent of RFE's trade integration with both key partners around the world and the rest of Russia. In particular, we calculate the region's trade potential on the basis of mean predicted values from a gravity model using three samples that offer different perspectives. Actual trade flows are then evaluated relative to the potential and the resulting index is analyzed for various years and countries. Based on the findings of the paper, we can draw several conclusions. First, RFE exports to Northeast Asia have intensified over the period 2008-2017, allowing the region to surpass its potential, although there seems to be room to grow with respect to China. The Russian government could facilitate cross-border trade by further reducing non-tariff barriers and improving transnational infrastructure links. Second, the deepening integration with Northeast Asia has been achieved at the expense of trade links with the rest of Russia. This might appear worrisome, given the geostrategic importance of RFE for Russia. At the same time, it might simply reflect the fact that RFE's natural resource exports are increasingly diverted to the Asia Pacific, which is more efficient than to ferry them to Western Russia, where they might end up being re-exported to Europe. Similarly, it might be more efficient for RFE to import from China than from more distant parts of Russia. Third, imports from Japan and Korea are far below potential, although these two countries can play a key role in promoting the economic development of RFE.
2003
The disintegration of economic links within the Russian Federation has propelled the regions comprising the Russian Far East to find new markets in Asia, but, ironically, the very weakness of the Russian state also has proved to be the greatest obstacle to the economic integration of these regions with the Pacific Rim economy. Russia’s flawed mechanisms for coordinating center-regional relations and poorly developed regional institutions, have limited the ability of the Russian Far East to promote economic relations with Asian neighbors. In the past three years President Vladimir Putin has taken steps to restructure center-regional relations in hope of creating a more effective state. We examine the consequences of these reforms both for Russia's future political development and for the economic integration of the Russian Far East in Northeast Asia. This paper examines the twin challenges confronting the Russian Far East: 1) economic integration in the Asia-Pacific economy, a re...
International Organisations Research Journal
Trade liberalization with Asian countries is a key issue on the agenda of Russia and the Eurasian Economic Union's (EAEU) economic and trade connectivity with the Asia-Pacific region (APR). However, the signing of free trade agreements (FTAs) has traditionally been negatively perceived in both Russia and EAEU partner countries because of the extremely conservative prevailing trade policy. This study simulated the situation of full liberalization of Russian trade in goods with Rep. of Korea (here and after: Korea), Singapore, India, Japan and China to assess the risks of such agreements. The countries were selected on the basis of the current negotiating tracks of the EAEU and the analysis of Russian foreign trade with the APR countries. The simulation was performed using a partial equilibrium model built with the SMART software provided by the World Integrated Trade Solution. The article highlights key product groups, increases in imports of which can be expected with a complete abolition of import duties by Russia (taking into account sensitive tariff lines). In addition, the authors conclude that in this case, imports of Indian and Korean products will increase by approximately 7.5%, and imports from Japan and Singapore, respectively, by 7% and 6.5% of the cost of imports from these countries in 2016. The simulation showed an 8% increase in imports from China, which in absolute terms exceeds the current level of trade with India and Singapore combined. This confirms the low probability of starting the FTA negotiations with China in short and medium term.
Russia’s New Asian Tilt: How Much Does Economy Matter?
Russia's Turn to the East, 2017
The economic development of Russia's Far East has been proclaimed a policy priority, to be facilitated by an ambitious turn or 'pivot' to Asia. This chapter assesses Russia's economic reorientation towards Asia, offering an overview of the Far Eastern dimension of Russia's economic relations with its major Asian partners in 2010-16, based on analysis of the dynamics of investment, trade relations and business climate development. Since 2014, trade with Asian partners has stagnated, while foreign investment (except for Chinese) has remained negligible. Moreover, trade is still mainly oriented towards markets in European Russia. The chapter concludes that Russia's pivot to Asia has not yet become an economic pivot-and that such a turn would be more easily attainable under a non-sanctions regime.
The Russian Far East in Russia's Asia Policy: Dual Integration or Double Periphery
Europe-asia Studies, 2012
The Russian Far East has, since Gorbachev, been used in foreign-policy discourse as a tool to access the integrative processes of the Asia-Pacific. However, vulnerability, symbolised by the border with China and the asymmetry of the Sino–Russian economic relationship, highlights the geopolitical andgeoeconomic implications of engagement with the Asia-Pacific. The ‘modernisation’ agenda, which became a leitmotiv of the Medvedev administration, focused attention on the challenges ofdevelopment in this region, but development within this agenda tends to be based on the most optimistic scenarios, and development plans for the border areas are heavily geared towards China. Integration with the Asia-Pacific is often advocated as a means of escaping economic dependence on China, but approaches and strategies remain overly politicised.
Burgeoning Sino-Russian Economic Relations and the Russian Far East: Prospects and Challenges
International Conference on Eurasian Economies, 2013
The colossal economic transformations and political intrusions had been affecting brutally China and the Soviet Union in the final decades of the twentieth century. Currently, Russia is a gigantic power, struggling to rebuild its economic base in an era of globalization. There are a number of significant difficulties of guaranteeing a stable domestic order due to demographic shifts, economic changes, and institutional weaknesses. On the other hand, the economic rise of China has attracted a great deal of attention and labeled as a success story by the Western world. The current growth of the Chinese economy is of immense importance for the global economy. Both nations are part of the world’s largest and fastest-growing emerging markets—member of the BRIC. Their respective GDPs are growing at an impressive rate by any global standards. Relations between China and Russia have evolved dramatically throughout the twentieth century. However, it would be fair to argue that during the past...
Beyond borders: Reconsidering regional trade in Central Asia
2005
This paper investigates the barriers to trade in Central Asia. While much of the existing literature on international integration of former Soviet Union countries has focussed on the quantities traded, this paper uses relative prices to shed some light on impediments to trade. It finds that the impact of borders on price variations across different locations in Central Asia is much smaller than conventionally thought. While prices vary significantly across the region, variations within one country are just as large as variations across countries. This may be due to obstacles to trade, and in particular rent seeking by enforcement agencies at the numerous internal check points. The paper also confirms that in relative terms, the borders with Uzbekistan are considerably more difficult to cross than those with Kazakhstan or the Kyrgyz Republic.