Trade And Payments After Soviet Disintegration

In early 1992, trade among the 15 state of the former USSR had declined dramatically, and trade relations were in disarray. This study discusses the incentives in the interstate trading environment of 1992 that have led to interstate export controls and the decline in interstate trade and proposes solutions that address the incentive problem. The study proposes methods for allowing enterprise-to-enterprise trade after the introduction of new, possibly inconvertible, currencies by independent states. The advantages and disadvantages of a clearing union, and an auction market for rubles in countries with new currencies are discussed. The study explains why enterprises face little competition from imports from outside the former USSR now, but why external import competition may become a serious concern after the introduction of new currencies or convertibility. It evaluates the case for preferential trading arrangements among the 15 states as a transitional device for easing unemployment and elaborates why any differential protection provided should be moderate and transitory.

Proceedings of a conference in Vienna in April 1992, cohosted by the Institute and the Austrian National Bank in association with the Russian League of Industrialists and Entrepreneurs.

This study of trade flows among and between nine Russian regions and 14 republics of the former Soviet Union shows a bias toward domestic trade in the reform period that is primarily the result of tariffs. In addition, old linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade.Djankov and Freund study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union. Estimating a gravity equation on trade among and between nine Russian regions and 14 former Soviet republics, they find that Russian regions traded 60 percent more with each other than with republics in the reform period (1994-96).By contrast, the Russian regions did not trade significantly more with each other than with republics in the prereform period (1987-90). The results suggest that the bias toward domestic trade in the reform period is primarily the result of tariffs. In addition, past linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade.This paper - a product of the Financial Sector Strategy and Policy Department - is part of a larger effort in the department to promote economic liberalization.

Abstract: June 2000 - This study of trade flows among and between nine Russian regions and 14 republics of the former Soviet Union shows a bias toward domestic trade in the reform period that is primarily the result of tariffs. In addition, old linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade. Djankov and Freund study the effects of trade barriers and the persistence of past linkages on trade flows in the former Soviet Union. Estimating a gravity equation on trade among and between nine Russian regions and 14 former Soviet republics, they find that Russian regions traded 60 percent more with each other than with republics in the reform period (1994-96). By contrast, the Russian regions did not trade significantly more with each other than with republics in the prereform period (1987-90). The results suggest that the bias toward domestic trade in the reform period is primarily the result of tariffs. In addition, past linkages - such as infrastructure, business networks, and production and consumption chains - have limited the reorientation of trade. This paper-a product of the Financial Sector Strategy and Policy Department-is part of a larger effort in the department to promote economic liberalization.

For this study, a group of Russian authors were commissioned to describe and assess the arms trade policies and practices of Russia under new domestic and international conditions. The contributors, drawn from the government, industry, and academic communities, offer a wide range of reports on the political, military, economic, and industrial implications of Russian arms transfers, as well as specific case studies of key bilateral arms transfer relationships.

Air and water pollution blighted northern Mexican cities long before the North American Free Trade Agreement (NAFTA) was a glimmer on the political horizon. Not surprisingly, when NAFTA became a political reality, environmentalists argued that commercial competition would weaken environmental standards in Canada and the United States and industrial growth in Mexico would further damage its weak environmental infrastructure. NAFTA's huge success in expanding free trade has concentrated population and environmental abuse at the US-Mexico border where it is most visible to Americans. Many environmental groups blame NAFTA and, drawing on its experience, now oppose new trade initiatives.Does the NAFTA record on the environment since 1994 justify its criticism? In this seven-year analysis, the authors review NAFTA's environmental provisions, including a side accord--the North American Agreement on Environmental Cooperation (NAAEC), the situation at the US-Mexican border, and the trends in North American environmental policy. They emphasize that the environmental problems of North America were not the result of NAFTA and the NAAEC was not devised to address all of them. The authors recommend ways to better NAFTA's environmental dimension in all three countries, and improve living conditions where economic growth is greatest--at the US-Mexican border. It makes more sense to tackle the shortcomings than to lament NAFTA and the economic growth it promotes.