Possible Mechanisms of Value Chains Formations in Free Trade Zones with Russia Participation

Abstract: Value chains have a special place in the development of international economic relations related to trade in goods and services. Trade of intermediate goods and components has increased significantly over the past half century due to reinforcement of multinational corporation’s role. In an effort to benefit from economies of scale, by breaking down and shifting the stages of the technological process to countries with more competitive and cheaper factors of production, multinational corporations forced scientists and experts to look at trade policy measures differently. As a result, regional trade agreements (RTA) and, at the present stage, mega-regional agreements have become organizational formats for such interaction between countries. At the same time, the phenomenon of the chain could be seen as an opportunity for growth of the national and world economy. However, in order for firms to be able to integrate into the chain, it is necessary to know the factors contributing to the country's increased participation in the GVC. In this paper, it considered the factors that form the value chain in the free trade zones, assessed the factors using an econometric model with panel data on the example of the selected group of countries, assessed the success of the factor’s usage in Russia in the framework of the current free trade zone of the EAEU with Vietnam and planned for signing with Singapore; developed recommendations to improve the use of these factors. Key words: value chains, regional trade agreements, integration, free trade zones, Eurasian Economic Union, Russia