MFN Yes, MFN No? :  Trade Developments Between the EU and Russia and the Principle of Most-Favored-Nation

Lavdari, Frans; Lavdari, Xhulio

doi:10.13169/polipers.19.2.ra4

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Policy Perspectives

Volume 19, Issue 2

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MFN Yes, MFN No? : Trade Developments Between the EU and Russia and the Principle of Most-Favored-Nation

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Author(s): Frans Lavdari ¹ , Xhulio Lavdari ²

Publication date (Electronic, pub): 20 December 2022

Journal: Policy Perspectives

Publisher: Pluto Journals

Keywords: MFN, European Union, Russia, Eurasian Economic Union, Regional Trade Agreements, FDI, International Trade

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Abstract

This research analyzes the consequences of the likely revocation of the principle of the most-favored-nation (MFN) in trade relations between the European Union (EU) and Russia. The analysis shows that this event would have more negative effects on Russia than the EU. The increase in import tariffs would benefit the EU with increase in profits but would lead to an increase in the cost of products for buyers in the short term, pushing them into new, more advantageous markets. Although Russia is trying to replace EU products with Asian ones, and gaining success too, the case of foreign direct investment (FDI) is different, as the country is still heavily dependent on EU.

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Author and article information

Journal

Title: Policy Perspectives

Publisher: Pluto Journals

ISSN: 1812-7347

Publication date (Electronic, pub): 20 December 2022

Volume: 19

Issue: 2

Pages: 61-87

Affiliations

[1 ] Department of Business and Management, LUISS Guido Carli University, Rome, Italy.;

[2 ] Department of Engineering, University of Exeter, Exeter, United Kingdom (UK).;

Article

DOI: 10.13169/polipers.19.2.ra4

SO-VID: f34ee462-627a-4b07-a9a5-22639937182c

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Published under Creative Commons Attribution 4.0 International ( CC BY 4.0). Users are allowed to share (copy and redistribute the material in any medium or format) and adapt (remix, transform, and build upon the material for any purpose, even commercially), as long as the authors and the publisher are explicitly identified and properly acknowledged as the original source.

History

References

Estevadeordal A., Frantz B., Taylor A. M.. The Rise and Fall of World Trade, 1870-1939. The Quarterly Journal of Economics. Vol. 118(2):359–407. 2003. Oxford University Press (OUP). [Cross Ref]
Taylor Alan. Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries. 2003. National Bureau of Economic Research. [Cross Ref]
Lavdari Frans. Principle of Most Favoured Nation: Description, Modern Evolution, and Analysis of the Exceptionality of the Principle in A Contemporary World. Extensive Reviews. Vol. 1(1):16–29. 2021. AIJR Publisher. [Cross Ref]
Reuveny Rafael, Kang Heejoon. International Trade, Political Conflict/Cooperation, and Granger Causality. American Journal of Political Science. Vol. 40(3)1996. JSTOR. [Cross Ref]
Özdemir Elvan, Serin Zehra Vildan. Trading State and Reflections of Foreign Policy: Evidence from Turkish Foreign Policy. Procedia Economics and Finance. Vol. 38:468–475. 2016. Elsevier BV. [Cross Ref]
Whitten Gregory, Dai Xiaoyi, Fan Simon, Pang Yu. Do political relations affect international trade? Evidence from China’s twelve trading partners. Journal of Shipping and Trade. Vol. 5(1)2020. Springer Science and Business Media LLC. [Cross Ref]
Li Yuan-Na, Wu Hai-Long, Qing Xiang-Dong, Nie Chong-Chong, Li Shu-Fang, Yu Yong-Jie, Zhang Shu-Rong, Yu Ru-Qin. The maintenance of the second-order advantage: Second-order calibration of excitation–emission matrix fluorescence for quantitative analysis of herbicide napropamide in various environmental samples. Talanta. Vol. 85(1):325–332. 2011. Elsevier BV. [Cross Ref]
Onwuegbuzie Anthony J, Johnson R Burke, Collins Kathleen Mt. Call for mixed analysis: A philosophical framework for combining qualitative and quantitative approaches. International Journal of Multiple Research Approaches. Vol. 3(2):114–139. 2009. Dialectical Publishing. [Cross Ref]
Elvestad Christel, Isachenko Tatiana. Chapter 6: Russia’s Regional Free Trade Agreements and Agri-Food Trade After 2014Palgrave Advances in Bioeconomy: Economics and Policies. p. 167–193. 2022. Springer International Publishing. [Cross Ref]
Baranovsky Vladimir. Russia: A Part of Europe or Apart from Europe? International Affairs. Vol. 76(3):443–458. 2000. Oxford University Press (OUP). [Cross Ref]
Bassin Mark. Russia between Europe and Asia: The Ideological Construction of Geographical Space. Slavic Review. Vol. 50(1):1–17. 1991. Cambridge University Press (CUP). [Cross Ref]
HATİPOĞLU Esra. EU - RUSSIA : PARTNERSHIP AND COOPERATION. Marmara Üniversitesi Avrupa Topluluğu Enstitüsü Avrupa Araştırmaları Dergisi. Vol. 5(1&2):199–210. 2015. ASOS Yayinevi. [Cross Ref]
Lukyanov Fyodor. Russia–EU: The Partnership That Went Astray. Europe-Asia Studies. Vol. 60(6):1107–1119. 2008. Informa UK Limited. [Cross Ref]
Reuveny Rafael, Kang Heejoon. International Trade, Political Conflict/Cooperation, and Granger Causality. American Journal of Political Science. Vol. 40(3)1996. JSTOR. [Cross Ref]
Malle Silvana. Economic sovereignty. An agenda for Militant Russia. Russian Journal of Economics. Vol. 2(2):111–128. 2016. NP Voprosy Ekonomiki. [Cross Ref]
Meissner Katharina. How to sanction international wrongdoing? The design of EU restrictive measures. The Review of International Organizations. Vol. 18(1):61–85. 2023. Springer Science and Business Media LLC. [Cross Ref]
Hosoe Nobuhiro. The cost of war: Impact of sanctions on Russia following the invasion of Ukraine. Journal of Policy Modeling. Vol. 45(2):305–319. 2023. Elsevier BV. [Cross Ref]
Cardwell Paul James, Moret Erica. The EU, sanctions and regional leadership. European Security. Vol. 32(1):1–21. 2023. Informa UK Limited. [Cross Ref]
Bjoertvedt Erlend. Corisk Report Series No 1, 2022 Progress in European-Russian trade reductions by May, 2022. 2022. Unpublished. [Cross Ref]
Cnossen Sijbren. Tobacco Taxation in the European Union. FinanzArchiv. Vol. 62(2)2006. Mohr Siebeck. [Cross Ref]
Mostafa Golam, Mahmood Monowar. Eurasian Economic Union: Evolution, challenges and possible future directions. Journal of Eurasian Studies. Vol. 9(2):163–172. 2018. SAGE Publications. [Cross Ref]
Mišević Petar. International trade of the Eurasian Economic Union (EAEU). Ekonomski vjesnik. Vol. 34(1):187–195. 2021. Ekonomski fakultet u Osijeku. [Cross Ref]
Allam Zaheer, Bibri Simon Elias, Sharpe Samantha A.. The Rising Impacts of the COVID-19 Pandemic and the Russia–Ukraine War: Energy Transition, Climate Justice, Global Inequality, and Supply Chain Disruption. Resources. Vol. 11(11)2022. MDPI AG. [Cross Ref]

Comments

Comment on this article

[1] Estevadeordal A., Frantz B., Taylor A. M.. The Rise and Fall of World Trade, 1870-1939. The Quarterly Journal of Economics. Vol. 118(2):359–407. 2003. Oxford University Press (OUP). [Cross Ref]

[2] Taylor Alan. Foreign Capital in Latin America in the Nineteenth and Twentieth Centuries. 2003. National Bureau of Economic Research. [Cross Ref]

[3] Lavdari Frans. Principle of Most Favoured Nation: Description, Modern Evolution, and Analysis of the Exceptionality of the Principle in A Contemporary World. Extensive Reviews. Vol. 1(1):16–29. 2021. AIJR Publisher. [Cross Ref]

[4] Reuveny Rafael, Kang Heejoon. International Trade, Political Conflict/Cooperation, and Granger Causality. American Journal of Political Science. Vol. 40(3)1996. JSTOR. [Cross Ref]

[5] Özdemir Elvan, Serin Zehra Vildan. Trading State and Reflections of Foreign Policy: Evidence from Turkish Foreign Policy. Procedia Economics and Finance. Vol. 38:468–475. 2016. Elsevier BV. [Cross Ref]

[6] Whitten Gregory, Dai Xiaoyi, Fan Simon, Pang Yu. Do political relations affect international trade? Evidence from China’s twelve trading partners. Journal of Shipping and Trade. Vol. 5(1)2020. Springer Science and Business Media LLC. [Cross Ref]

[7] Li Yuan-Na, Wu Hai-Long, Qing Xiang-Dong, Nie Chong-Chong, Li Shu-Fang, Yu Yong-Jie, Zhang Shu-Rong, Yu Ru-Qin. The maintenance of the second-order advantage: Second-order calibration of excitation–emission matrix fluorescence for quantitative analysis of herbicide napropamide in various environmental samples. Talanta. Vol. 85(1):325–332. 2011. Elsevier BV. [Cross Ref]

[8] Onwuegbuzie Anthony J, Johnson R Burke, Collins Kathleen Mt. Call for mixed analysis: A philosophical framework for combining qualitative and quantitative approaches. International Journal of Multiple Research Approaches. Vol. 3(2):114–139. 2009. Dialectical Publishing. [Cross Ref]

[9] Elvestad Christel, Isachenko Tatiana. Chapter 6: Russia’s Regional Free Trade Agreements and Agri-Food Trade After 2014Palgrave Advances in Bioeconomy: Economics and Policies. p. 167–193. 2022. Springer International Publishing. [Cross Ref]

[10] Baranovsky Vladimir. Russia: A Part of Europe or Apart from Europe? International Affairs. Vol. 76(3):443–458. 2000. Oxford University Press (OUP). [Cross Ref]

[11] Bassin Mark. Russia between Europe and Asia: The Ideological Construction of Geographical Space. Slavic Review. Vol. 50(1):1–17. 1991. Cambridge University Press (CUP). [Cross Ref]

[12] HATİPOĞLU Esra. EU - RUSSIA : PARTNERSHIP AND COOPERATION. Marmara Üniversitesi Avrupa Topluluğu Enstitüsü Avrupa Araştırmaları Dergisi. Vol. 5(1&2):199–210. 2015. ASOS Yayinevi. [Cross Ref]

[13] Lukyanov Fyodor. Russia–EU: The Partnership That Went Astray. Europe-Asia Studies. Vol. 60(6):1107–1119. 2008. Informa UK Limited. [Cross Ref]

[14] Reuveny Rafael, Kang Heejoon. International Trade, Political Conflict/Cooperation, and Granger Causality. American Journal of Political Science. Vol. 40(3)1996. JSTOR. [Cross Ref]

[15] Malle Silvana. Economic sovereignty. An agenda for Militant Russia. Russian Journal of Economics. Vol. 2(2):111–128. 2016. NP Voprosy Ekonomiki. [Cross Ref]

[16] Meissner Katharina. How to sanction international wrongdoing? The design of EU restrictive measures. The Review of International Organizations. Vol. 18(1):61–85. 2023. Springer Science and Business Media LLC. [Cross Ref]

[17] Hosoe Nobuhiro. The cost of war: Impact of sanctions on Russia following the invasion of Ukraine. Journal of Policy Modeling. Vol. 45(2):305–319. 2023. Elsevier BV. [Cross Ref]

[18] Cardwell Paul James, Moret Erica. The EU, sanctions and regional leadership. European Security. Vol. 32(1):1–21. 2023. Informa UK Limited. [Cross Ref]

[19] Bjoertvedt Erlend. Corisk Report Series No 1, 2022 Progress in European-Russian trade reductions by May, 2022. 2022. Unpublished. [Cross Ref]

[20] Cnossen Sijbren. Tobacco Taxation in the European Union. FinanzArchiv. Vol. 62(2)2006. Mohr Siebeck. [Cross Ref]

[21] Mostafa Golam, Mahmood Monowar. Eurasian Economic Union: Evolution, challenges and possible future directions. Journal of Eurasian Studies. Vol. 9(2):163–172. 2018. SAGE Publications. [Cross Ref]

[22] Mišević Petar. International trade of the Eurasian Economic Union (EAEU). Ekonomski vjesnik. Vol. 34(1):187–195. 2021. Ekonomski fakultet u Osijeku. [Cross Ref]

[23] Allam Zaheer, Bibri Simon Elias, Sharpe Samantha A.. The Rising Impacts of the COVID-19 Pandemic and the Russia–Ukraine War: Energy Transition, Climate Justice, Global Inequality, and Supply Chain Disruption. Resources. Vol. 11(11)2022. MDPI AG. [Cross Ref]