Borders Abolished, Trade Booms Within Customs Union, Hurts Outsiders
The Eurasian Customs Union eliminated internal customs controls, leading to a 65% increase in trade among its members. This change mainly affected non-tariff costs rather than tariffs, benefiting final goods trade within the union but hurting trade with other partners. Intermediates trade was less impacted, suggesting that global production fragmentation limits the diversion of trade from regional agreements.