Socio-economic perspectives of Azerbaijan
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Socio-economic perspectives of Azerbaijan

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Socio-economic perspectives of Azerbaijan Socio-economic perspectives of Azerbaijan Presentation Transcript

  • FTA of EU- EaP countries vs Customs Union Socio-economic perspectives of Azerbaijan
  • Presenter • Ziya Alili; • CFA candidate; • Director of CESD School of European Studies; • Econometric-Researcher at Centre for Economic and Social Analysis; • Consultant on EaP at Centre for Economic and Social Development; • BSc in Financial Management; • MSc in Risk Management; • Mobile: 00994 50 684 0119; • Landline: 00994 12 497 5684; • Email: AliliZiya@CESD.Az • Email: Ziya.Alili@Gmail.Com
  • Agenda • EU –Azerbaijan cooperation within EaP; o Recent development • EU-Azerbaijan trade turnover; • Economic integration steps: FTA vs CU; • Global Simulation of FTA and CU: Wealth creation • EU-EaP FTA vs CU • Conclusion;
  • EU and Azerbaijan: Timeline
  • EaP and Azerbaijan No development in biopassports 3 rounds of suc’l disc-ns Agreement expected by end 2013 Visa Facilitation Diversification of oil supplies Current and future energy projects Energy Security Compliance with WTO policies 100+ policy amendments Policy Converges
  • Important meetings • S.Fule, may 2013; o Last round of visa negotiations: Agreement by end 2013 o Azerbaijan can be member of EaP and CU simultaneously; • V.Putin, august 2013; o No remarks on CU union accession; • Azerbaijani delegation trip to Brussels, august 2013: o Minister of Economic Development o Deputy Minister of MoFA; o Financing agreement: EUR 19.5 mln
  • EU-Azerbaijan Trade relations 63.8% 70.7% 71.0% 67.1% 54.6% 47.7% 57.3% 27.7% 56.7% 43.6% 47.3% 57.2% 46.9% 20.1% 19.6% 19.4% 32.4% 29.2% 25.4% 28.9% 26.7% 26.7% 25.2% 23.8% 29.6% 25.4% 6.0% 3.6% 4.9% 6.1% 6.1% 7.0% 7.1% 10.8% 1.8% 6.1% 3.9% 7.2% 4.3% 26.8% 18.0% 26.1% 20.1% 23.2% 19.1% 25.2% 22.8% 22.9% 20.8% 23.5% 19.7% 18.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% - 5,000,000.0 10,000,000.0 15,000,000.0 20,000,000.0 25,000,000.0 30,000,000.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Azerbaijani export to EU Azerbaijani imports from EU EU % in total Exports, 2nd axis EU % in total Imports, 2nd axis CU % in total Exports, 2nd axis CU % in total Imports, 2nd axis Oil 840%; Articles of iron and steel 460%; Edible fruit and nuts 23%;
  • Establishing the Economic Integration of EaP countries with EU Free Trade Zone assessment
  • Economic Integration Steps • Political Union o MU + common politics, etc. • Monetary Union o EU + common currency • Economic Union o CU + Common economic policy • Common Market o CU + free movement for factors of production • Customs Union o FTA + Common customs policy • Free Trade Agreement; o All products exempted • Preferential FTA; o Single product exempted EU-EaP FTA CU of Russia, Belarus, Kazakhstan Eurasian Economic Union
  • Assessing trade implications of EaP-EU FTA and CU GSIM: Global Simulation Analysis of Industry-Level Trade Policy
  • GSIM: the model • World Bank, UNCTAD • Available via WITS platform o Wits.worldbank.org • Trade Analysis and Information System • Partial Equilibrium Model o Imperfect substitution; o Demand inelasticity; o Supply inelasticity;
  • GSIM: Two Models Parameter Model 1 Model 2 Database TRAINS Reporter EU, EaP countries Customs Union, Azerbaijan Partner EU, EaP countries Customs Union, Azerbaijan Year 2012 Products Top 10 exports of Azerbaijan; Scenario Reporter EU. EaP CU, Azerbaijan Partner Azerbaijan Tariff Rates Cut by 100%; Products Top 10 exports of Azerbaijan; 271019 Petroleum oils and preparations 271121 Natural gas in gaseous state 170199 Refined sugar, in solid form, nes 81070 Persimmons 300490 Medicaments nes, in dosage 151620 Veg fats &oils&fractions hydrogenatd,inter/re-esterifid,etc,ref'd/not 760120 Aluminium unwrought, alloyed 151219 Sunflower-sed/safflower oil&their fractions refind but nt chem modifid 390110 Polyethylene having a specific gravity of less than 0.94
  • GSIM: Results Welfare creation Model 1 Model 2 Consumer surplus 0 0 Producer surplus 0 0 Trade creation 0 0 Trade diversion 0 0 Query ID 397826 397815 Why no effect? Model 1: GSP of EU; Model 2: CIS FTA;
  • Hedonic Estimation Model: Short term implication of CU
  • Azerbaijan and CU: long term implications Stakeholderanalysis International Partners Businesses Society Sectorialanalysis Energy Agriculture Construction, Tourism, Transp ort Non-oil production
  • FTA of EU-EaP or CU? • CU will impose common external tariffs; o Not a case in EU EaP FTA • CU has non-trade requirements: o Energy policy; o Line up with common domestic energy prices; o Not a case in EU EaP FTA • CU may hamper Azerbaijan’s relations with EU and Turkey; o EU EaP FTA will not damage Azerbaijan’s relations with Russia and other CIS members;
  • Questions? • Ziya Alili • Mobile: 00994 50 684 0119; • Landline: 00994 12 497 5684; • Email: AliliZiya@CESD.Az • Email: Ziya.Alili@Gmail.Com