The effect of sanctions on Russian agricultural imports

Abstract

This paper contributes to the methodology of trade policy analysis, specifically to the assessments of non-tariff measures. To quantifying the effects of these measures, the proportion between the variables of two gravity equations, describing the situation before and after the embargo is used. The ratio of imports per unit of the supplier’s GDP over the two compared periods (2013 and 2017) is different for two groups of trade partners, one of which includes free-trade partners while the other spans the rest of the world (with some exceptions). In the presence of the embargo the gap in the average imports per unit of the supplier’s GDP between the two groups is wider. This is a consequence of the emergence of a new trade barrier. This gap allows us to indirectly quantify the trade bans via their tariff equivalent. In this study the methodology is applied to the case of food and agricultural imports. Fish, as well as other products outside chapters 1–24 of Harmonized commodity description and coding system, are excluded. The hypothesis of the study is that the impact of the embargo on the food and agricultural imports does not exceed that of tariff and phytosanitary measures. The study rejects this hypothesis and concludes that the embargo establishes a prohibitive level of protection.