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Foreign Trade in Russia: Existing Distortions and Potentials of Regional Competitiveness in View of Liberalization
Abstract
Until recently only one of the largest economies – Russia was not among the WTO members. Russia's accession into the WTO drew out hidden structural problems of national economy, low competitiveness of domestic producers, dependence on fossil-fuel exports, and regional disparities. The paper aims at overview of the existing distortions of Russia's foreign trade and their potential threats to sustainable economic development and national economic security in view of the running trade liberalization. Regional implementations of trade liberalization are investigated on the case of the Stavropol Krai, one of the southern regions of Russia with an average level of economic development. The Gravity model is implemented to analyze trade activities of the region; the Boundary Effect Model is utilized to evaluate the effects of trade liberalization on separate industries. Simulation allowed distributing regional commodities on their competitiveness depending on export quota and boundary effect, and accessing aftermaths of export expansion and import substitution.
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