Data show that trade sanctions reduce commerce between the countries imposing them and their targets. But this bilateral success can conceal a wider failure if the sanctions induce the target to build stronger trade links elsewhere. This column uses sector-level trade data, including domestic sales, to estimate both the bilateral trade destruction and the third-country trade creation effects together. Across 22 sectors, complete sanctions usually promote trade between targets and third countries. Russia’s 2006 embargo on Georgia illustrates this fact: additional trade to third markets more than offset the estimated 57% decline in exports to Russia.



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