Diversification of Belarusian Exports: The Potential of the DCFTA-Countries Ukraine, Moldova and Georgia
Belarus is an open economy, with exports running at above 50% of GDP. The Russian Federation accounts for about half of Belarus’ total exports of goods. A diversification of Belarus’ exports to other markets would be a well-founded policy goal, increasing export sales and reducing the vulnerability to external shocks.
Apart from discovering new markets, traditional trade partners offer also new opportunities at comparatively low access costs. This is in particular true for Ukraine, Moldova and Georgia, which have all free trade agreements with Belarus, and which taken together are the destination of 12% of Belarusian exports. At the same time, these markets have newly established deep and comprehensive free trade agreements (DCFTAs) with the EU, which implies a changing competitive environment for Belarusian exporters to these markets over the short to medium term.
In this study, we look at the concrete export potential of Belarus on a product level to Ukraine, Moldova and Georgia. Our empirical analysis reveals there is export potential in each country case, as the export structure of Belarus and the import structure of these countries show a high degree of complementarity. On a (HS4) product level, we find that railway equipment, fertilizers and agro-food products are among the Top-10 products for which Belarus has the highest potential of exports to Ukraine. In the case of Moldova, the corresponding products are metal products, construction materials, fertilizers, and special vehicles. Wood products, chemicals, metal, food and equipment are among Top-10 products, for which Belarus has the highest potential of exports to Georgia.