How does Kazakh business work under the EAEU?

Acting Deputy Chairman of the NCE RK "Atameken" - Director of the Department of Economic Integration Dana Zhunusova spoke about the problems of local entrepreneurs in doing business on the territory of the Member States of EAEU at the international conference "Advocacy of competition in the industry at the transboundary markets of EAEU".

First of all, the representative of NCE focused attention on the issues of competition, saying that without the "creation of a healthy competitive environment and equal conditions for business" integration will have some difficulties. As it is known, the market of the Member States of EAEU is 182 million consumers with foreign trade turnover of almost 1 trillion US dollars (937 billion US dollars).

"This is an incentive for realizing the potential of entrepreneurial initiatives of Kazakh business, it offers opportunities for attraction of investment, creation of new industries, as well as the access of domestic products on cross-border and foreign markets. In this context, the provisions of the EAEU Treaty on the general rules of competition are of particular importance ", - said the representative of the NCE RK “Atameken”.

However, as it was stated by Dana Zhunusova, during the analysis and assessment of the level of competition starting conditions of all participants should be considered objectively, as well as the capacity and interest of entrepreneurs of each of member state of the EAEU at cross-border markets.

The next question, which affects the interests of the business, it is barriers.

According to Dana Zhunusova, since the launch of the EAEU and application of practice laid down in the rules of cooperation of the Treaty, there have been detected gaps and imperfections of regulatory mechanisms in each sector, creating barriers to the efficient functioning of the freedoms of movement of goods, services, capital and labor. In this connection, EEC developed a list of barriers to mutual market access. Currently, the list includes 319 identified exceptions, barriers and other restrictions of mutual access.

In turn, as it was noted by Dana Zhunusova, NCE RK "Atameken" constantly registers the complaints of domestic entrepreneurs in the list of barriers for the Kazakh business.

Meanwhile, as it was announced by Acting deputy chairman of the NCE, today there are a number of issues that are crucial for domestic entrepreneurs that remain unresolved and constitute a serious barrier to the implementation of foreign economic activity.

According to her, the business of Kazakhstan has already faced a number of challenges that put in unequal competitive conditions, our business community with respect to our colleagues in the Union.

One of the most acute and painful issues for Kazakh business, the representative of NCE named the issue of transit of  Kazakh goods. According to Dana Zhunusova, "the problem is the result of a lack of monitoring and enforcement of supranational decisions of EAEU, as exemplified by the failure to implement the Decision of the Prime Minister of  EAEU on application of TIR Convention on the territory of the EAEU".

As it is known, the issue of the use of TIR Carnets for transit of goods through the territory of the EAEU has long remained unresolved. Thanks to the initiative of the Republic of Kazakhstan on May 29 this year, there has been signed an Order No.12 of the Intergovernmental Council of the EAEU on application of TIR Convention on the territory of the EAEU.

"However, the current problems with the transit and import of goods to Kazakhstan affect the interests of not only long distance truckers but rail carriers and importers", - said the Acting Deputy Chairman of NCE RK. What most of Kazakh businessmen may face? First - it is the non-use of TIR Carnets for transit of Kazakh goods through the territory of the Russian Federation, the second - a complete multiple customs clearance of Kazakhstani goods covered by the "sanctioned" list, and, third, the prohibition of Rosselkhoznadzor for the transit of Kazakh goods through the external borders of EAEU through checkpoints of the Republic of Belarus.

"As a result of measures introduced by the Russian side, domestic entrepreneurs are forced to pay as a third-party services for the delivery of imported raw materials for processing and additional services for the storage of goods at Russian TSW, loading and unloading of goods for inspection. Additional financial costs are included in the cost of the final product, but in practice there is a situation in which domestic entrepreneurs are in unequal competitive conditions with similar enterprises of the Member States of the Union", - said Dana Zhunusova.

NCE RK has repeatedly raised these issues at the level of public authorities of the EAEU, the Board of the EAEU, EEC and in the media.

"However, today the situation remains unresolved, which has a negative impact on the volume of traffic in Kazakhstan and in the future could lead to serious consequences such as the loss of the domestic market of international road transport and the reduction of transit of goods by rail", - said the representative of the NCE RK.

Another important point in terms of integration is the issue of state support. According to Dana Zhunusova, information on the volume of state support in the EAEU should be transparent.

According to her, today, in a world of negative factors, subsidizing of key industries as a tool of support of domestic producers is of particular importance.

"As experience shows,  there is no downward trend in the volume of subsidies provided under the adopted state programs of support and regulatory measures in the Member States of the Union. However, it can be assumed that different levels of subsidies directly affect the state of competition in different sectors of the economy ", - said the representative of the NCE RK "Atameken".

She noted that "the work in this direction is underway. So, now the approach to the development of criteria on the basis of which the Commission will decide on the admissibility or inadmissibility of specific subsidies, are being considered.

"Taking into account that, indeed, the volume of state support can significantly distort the possibility of competing at the cross-border markets, we believe that this information should be open, accessible and transparent. We hope that our partners from the EAEU are ready for equal and fair competition ", - summarized Dana Zhunusova.