Analyzing The Trade Effects Of The Eurasian Economic Union On Its Members:A Gravity Model Approach

The EEU was created January 2012 with the objectives to reduce trade barriers between the member countries,has free flow of goods,services,labor and capital among its members and create a single market.The objective of this study is to assess the effects and extent EEU economic integration on its countries member trade flow in general and on Kazakhstan trade flow in particular through the gravity model.Taking advantage of Ordinary Least Square method(OLS),in panel data of 5countries(Armenia,Belarus,Kazakhstan,Kyrgyzstan,and Russia)from 2000 to 2015,the research carried out by means of secondary data and using the variables: Trade,GDP,Distance between EEU countries,Population,and Integration(Dummy variable which measure the effect integration).After the analyses using Eviews 7,the study showed that the integration have positive impact on Kyrgyzstan trade while it’s have negative impact on Armenia,Belarus,Kazakhstan and Russia trade flow.The variable distance was found to be insignificant.In other to come up with this and let all members benefit from that integration some relevant recommendations were made such as free movement of labor and the free movement of services in EEU.EEU members should find a way to reduce non-tariff barriers and improve trade facilitation.Some progress have to be made by EEU members inc limitations on the use of tradedistorting agricultural subsidies.