Trade policy of EAEU with third countries: NCE asks business to mobilize
Department of Economic Integration of NCE RK is working on identification of barriers and opportunities to trade with third countries
On 1st of January 2015, after the entry into force of the EAEC Treaty, the Union gained the status of an international legal personality and was entitled in consultation with Member States to exercise international cooperation and the ability to enter into international agreements with States, international organizations and integration associations (Clause 1, Article. 7 of the EAEU Treaty).
The Union is open to new participants, but the Department of Economic Integration of NCE RK notes that for the adoption of specific decisions it is required to conduct an appropriate analysis of the economic viability, taking into account all possible risks and benefits of joining one or another party to the domestic producers, importers and exporters .
One of the tools of foreign trade activities in the framework of trade policy is the creation of free trade zones. This form of cooperation with third countries has found practical application in the signing of the Free Trade Agreement between the parties of the EAEU and the Socialist Republic of Vietnam in May 29, 2015 in Burabay resort in Kazakhstan.
This document establishes the mutual obligations of the participants in a particular way to simplify access to their markets in the framework of bilateral trade for suppliers of goods and services from partner countries under the agreement.
The liberalization of conditions of access of goods of the EAEU countries to the Vietnam market will increase the competitiveness of already supplied domestic goods to the republic, as well as create conditions for the supply of new products, which prior to reduction or abolishment of import duties was not sufficiently competitive in price. On the other hand, due to the liberalization of access of Vietnamese goods to the EAEU market, the prices for these products will decrease, and they will become more affordable for the end user. These products include:
• in the agricultural sector: tropical fruits, nuts, vegetables, sauces and condiments;
• In the industrial sector: tracksuits, jackets, sports shoes.
Exporters and manufacturers of EAEU countries will have a unique opportunity to get an exclusive access to the Vietnamese market in respect of such items as:
• poultry (customs duty rate will be reduced from 20% to 0% over 5 years);
• alcoholic beverages (customs duty rate will be reduced from 10% to 0% over 10 years);
• tires (customs duty rate will be reduced from 5-30% to 0% over 5 years)
• bus (customs duty rate will be reduced from 30-40% to 0% over 10 years)
• passenger cars (down from 50-70% to 0% over 10 years).
In addition, according to the Eurasian Economic Commission, over 30 countries and regional organizations have recently addressed with a proposal to conclude a free trade agreement with the EAEU.
According to DEI NCE RK, formation of free trade zones is a very useful tool for the development of foreign trade. Conclusion of such agreements can eliminate unnecessary barriers to trade, but at the same time maintain the mechanisms to protect domestic industries.
Currently, the Commission of the Union, together with the parties, is working on several countries with different degrees of integration:
1. Countries under consideration for an agreement on an FTA - Iran, Israel, Serbia.
2. Countries, in respect of which is conducted analytical work on the feasibility of an agreement on free trade - Egypt, India, Korea, Singapore.
3. Countries considered for the conclusion of agreements on trade and economic cooperation: China.
Business involvement is crucial in the process of negotiating positions of the Union in the conduct of the dialogue between the two countries, the result of which is the Agreement on free trade zone. The Department of economic integration NCE RK "Atameken" calls on the representatives of Kazakhstani businesses to participate actively in this direction in order to protect their own interests and to maximize the benefits from trade agreements.
In this regard, Kazakhstan's offer to entrepreneurs who have or are planning to establish business relations (trade in goods, services) with the above countries, fill out questionnaires aimed at identifying barriers and potential opportunities in foreign trade activities. We note that on the basis of completed responses will form the negotiating positions of Kazakhstan’s business.
Please send the completed questionnaire to dei@palata.kz.
For further questions, please contact the Department of Economic Integration: 8 (7172) 919373.
Questionnaires:
• The Islamic Republic of Iran
• Israel
• People's Republic of China
• Serbia
• Egypt
• India
• Korea
• Singapore
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