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The report of the Minister of National Economy on the Government Hour on the implementation of the trade policy of the Republic of Kazakhstan in the Eurasian Economic Union in the light of the President’s Address to the People of Kazakhstan, 08.02.19

The report of the Minister of National Economy on the Government Hour on the implementation of the trade policy of the Republic of Kazakhstan in the Eurasian Economic Union in the light of the President’s Address to the People of Kazakhstan "Growth of the welfare of Kazakhstanis: increasing incomes and quality of life": "Measures to protect the domestic market and features of the foreign trade policy of the EAEU member countries"

Kazakhstan has been a member of the Eurasian Economic Union for the fifth year.

The implementation of the basic agreements on the free movement of goods shows positive results of the mutual trade of the states of the Eurasian Economic Union.

Thus, the trade turnover of Kazakhstan with the countries of the EAEU continues to increase and in the first 11 months of 2018 amounted to 17.1 billion dollars, an increase of 6.2%, including exports grew by 10% and amounted to 5.3 billion dollars, import - by 4.6% and amounted to 11.8 billion dollars

Reference: At the end of 2017, the trade turnover of Kazakhstan with the countries of the EAEU increased by 28.9% compared with 2016 and amounted to $ 17.8 billion, including exports - by 33.9% ($ 3.9 billion ), imports - by 26.9% ($ 9.9 billion).

Growing inflow of investments from the countries of the EEU. According to the results of three quarters of 2018, the inflow of investments from the EEU countries increased by 31% (from $ 941.5 million to $ 1.2 billion).

Reference: The inflow of investments from Russia in the third quarter of 2018 compared to the same period of 2017 increased by 34.4% (from $ 876.9 million to $ 1,178.7 million), from Belarus decreased by 11% (from $ 63.7 million to $ 50.8 million), from Kyrgyzstan increased 4 times (from $ 0.9 million to $ 3.6 million), from Armenia increased 5.2 times (from 27 thousand dollars to 142 thousand dollars).

In addition, the number of joint ventures is growing. Thus, the number of joint ventures with EAEU countries increased by 69.8%, from 6,272 enterprises as of January 1, 2015 to 10,654 enterprises as of December 1, 2018.

Reference: With Russia, the number of enterprises increased by 63%, from 5,649 to 9,028; with Kyrgyzstan - 2.5 times, from 364 to 921; with Belarus - 2 times, from 158 to 313; with Armenia - 2.1 times, from 101 to 212.

The participation of Kazakhstan in the Eurasian Union significantly increases the attractiveness of domestic industries for investors, who, in turn, creating production in Kazakhstan, can count on selling their own products on the market of all EEU countries.

Reference: The total volume of economies of member countries is about 1.8 trillion. US dollars c population in 183.4 million people.

I note that since the EAEU’s operation (2015), member states have significantly improved their positions in the world ranking Doing business-2019. Thus, Kazakhstan takes 28th place (+49 positions), Russia 31st place (+ 31 positions), Belarus 37th place (+20 positions), Armenia 41st place (+4 positions), Kyrgyzstan 70th place (+32 positions).

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In general, the Treaty on the Eurasian Economic Union provides for the basic conditions for interaction between countries, which are primarily aimed at the realization of the integration potential for all countries of the union.

In implementation of the Treaty, key program documents have been adopted that determine the main factors and conditions for cooperation in various sectors of the economy: industry, transport, customs administration, digitalization of the economy, etc.

So, on January 1, 2018, the new EAEU Customs Code came into force, which includes provisions on simplifying customs procedures. In addition, electronic declaration of goods was introduced based on the principle of shifting the emphasis from the customs clearance stage to the stage after the goods were released.

Consistently, work is underway to adopt technical regulations in order to remove technical barriers (differences in requirements) among members. Thus, 47 technical regulations have already been adopted. All this will allow to form a common market for goods with uniform requirements and, accordingly, will create conditions for the smooth movement of goods.

Programs have been adopted to formulate common markets for gas, oil and petroleum products of the EAEU.

The program to form a common gas market is aimed at developing competition, ensuring non-discriminatory access to gas transmission systems and the transition to market pricing.

The program for the formation of common markets for oil and petroleum products is aimed at creating a single exchange space, ensuring transparency of stock and over-the-counter price indicators, ensuring non-discriminatory access of economic entities of member states to exchange trading in oil and oil products, as well as defining the mechanism for executing transactions within a single exchange space .

In addition, in 2018, pilot projects on labeling of fur and tobacco products were launched, which will create equal conditions for doing business - to prevent incidents of unfair competition and to confirm the authenticity of goods.

Deeper integration is envisaged in those areas where we have agreed to implement unified regulation, including the conditions of product circulation. This applies to the areas of technical regulation, sanitary, phytosanitary, veterinary measures, foreign trade policy.

All this was done in order to create a single market, without barriers, with uniform access conditions in terms of requirements for the products to be traded and a desire for high-quality, efficient and easy for business regulatory practices.

This approach allows for the free circulation of products, while meeting all the requirements for safety in the general market.

Solving the issue of free circulation of goods within the EAEU, the parties are actively working together to eliminate barriers in the domestic market.

Agreed list consisting of 70 obstacles. Of these, 45 are used by more than 2 member states of the EEU, 9 - of the Russian Federation, 5 - Kazakhstan, 6 - Belarus, 3 - KR, 2 - RA.

In order to eliminate obstacles, a Roadmap was approved to eliminate exemptions and restrictions in the domestic market of the EAEU for 2018-2019. The implementation of roadmap activities stimulates entrepreneurial activity and will ensure the realization of the free movement of goods, services, capital and labor. The implementation of activities embedded in the Roadmap is one of our main tasks.

For example, this year, as part of the implementation of the Roadmap measures, the list of checkpoints through which goods can move using international road transport books (TIR) ​​has been canceled, decision making in the areas of the agro-industrial complex and technical regulation has been accelerated, and approaches and options have been developed measures to remove the remaining obstacles.

Reference: The roadmap for 2018–2019, at the suggestion of the Member States of the Union, includes 17 obstacles, of which: 2 exemptions, 15 restrictions. Of the 17 obstacles included, 12 obstacles are included in the roadmap from the agreed list, 5 obstacles are proposed by the EAEU member states as the most restrictive on the free movement of goods, services, capital and labor in the internal market of the Union.

These obstacles relate to the areas of labor migration, the agro-industrial complex of taxation, customs and technical regulation.

In addition, new areas of cooperation are being actively developed. This is a digital agenda of the EEU. We proceed from the assumption that the Digital Agenda should promote high-quality and sustainable economic growth, create a favorable environment for the development of innovations, form new industries and markets, as well as increase the competitiveness of the economies of the member states.

All this, together with the basic EAEU Treaty, allows achieving the main goal of the EAEU - ensuring four freedoms (freedom of movement of goods, services, capital and labor).

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In the face of the confrontation of the major world economies, it becomes very important to adequately respond to possible threats from the import of goods to the domestic market.

It should be noted that the competence to apply in relation to the import of trade measures, which are part of foreign trade policy, is transferred to the Board of the Eurasian Economic Commission.

Trade measures, namely, special protective, anti-dumping and countervailing measures, are applied after the conduct of relevant proceedings, the procedure for which is strictly regulated by the rules of the World Trade Organization. Such measures are aimed at protecting the manufacturers of the countries of the Eurasian Union from the unfair trading practices of importers, expressed in dumping, subsidized imports or from the growing imports that could cause damage to domestic producers.

Today, within the framework of the EAEU, we are applying 16 anti-dumping measures against manufacturers from China, Ukraine, Malaysia and India. The use of these measures has allowed Kazakhstan to increase exports of certain types of steel pipes by 60%, to increase the production of bearings by 11%, these are not the only positive results of joint protection of domestic producers of the EEU countries.

Referencegoods subject to anti-dumping measures: rolling bearings, some types of steel pipes, polymer-coated metal, graphitized electrodes, cold-formed seamless stainless steel pipes, enameled cast-iron baths, steel forged rolls for rolling mills, citric acid, kitchen tableware from corrosion-resistant steel, seamless steel pipes used for drilling and operating oil and gas wells, crawler bulldozers, truck tires, steel rolled coils wheels, seamless pipes of corrosion-resistant (stainless) steel with a diameter of up to 426 mm inclusive, rods, ferro-silicon manganese, steel corners.

In addition, there are four antidumping investigations in the active phase with regard to cast rims, seamless stainless steel pipes, galvanized steel and optical fibers from China, Ukraine, the USA and Japan.

The introduction in the United States last year of additional duties on imports of steel and aluminum prompted the largest producers of these goods to use retaliatory measures. For example, the EU, China, Canada, Mexico, India, Turkey introduced similar measures. Considering that these goods are sensitive and for our economy, Kazakhstan was among the initiators of a special protective investigation regarding the import of certain types of metal products from third countries.

In each case, the Ministry conducts an analysis of the situation on the market for goods subject to the proceedings. A study is conducted of the level of development of the domestic industry: production capacity, degree of workload of production, structure of domestic consumption. Also taken into account the interests of consumers of products, in terms of the possible impact on the price and volume of supply in the market. Based on the results of such an analysis, the position of our republic on the proposed measures is formed, which is not always expressed in support of the proposed measure.

For example, given the interest of domestic agricultural producers in the supply of imported herbicides, Kazakhstan has blocked the decision of the Eurasian Commission to apply anti-dumping measures in relation to herbicides supplied from the EU.

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In order to create favorable conditions for domestic producers, the Ministry is constantly working to revise the rates of import / export customs duties. Given the membership in the Eurasian Union, the decision on the change in import duties is taken by the Eurasian Commission in consultation with all the countries of the EEU.

In order to support domestic metallurgical enterprises, at the initiative of Kazakhstan, it was decided to reduce import customs duties on electrodes, in order to reduce the cost of finished products of the Kazakhstan enterprise Ust-Kamenogorsk Titanium and Magnesium Plant, we agree on an annual tariff quota for the import of necessary raw materials (vanadium aluminum master sheet) and other examples.

At the same time, a change in export duties is a national competence. It should be noted that today the Ministry is preparing a decision on exemption from the payment of export duties in respect of certain types of railway components, which is necessary to stimulate their exports.

The Government also uses non-tariff regulation of foreign trade to support Kazakhstan's business. For example, in September last year, the introduction of temporary bans on the export from Kazakhstan of waste paper, cattle hides and scrap of ferrous and non-ferrous metals was approved. Such a measure is necessary in order to provide Kazakhstani processing plants with raw materials.

At the same time, the EAEU countries apply a single list of goods to imports, to which measures of non-tariff regulation in trade with third countries are applied. It includes goods controlled for reasons of national security, ensuring international obligations in the field of environmental protection, combating illegal trafficking in narcotic and psychotropic substances, weapons, precious metals and precious stones.

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The participation of Kazakhstan in the EAEU creates favorable conditions for access of Kazakh producers to foreign markets. This is realized through the conclusion of preferential trade agreements with third countries. So, in 2015, we signed an agreement on a free trade zone with Vietnam, and in 2018 with Iran, which opened preferential access for our goods to a market with a population of about 180 million inhabitants.

Today, negotiations are underway to conclude similar agreements with Egypt, Israel, India, Serbia and Singapore.

Such agreements will also allow not only to improve the conditions for access of domestic goods to the markets of these countries, but also significantly simplify the trade procedures used and allow for greater transparency and interaction in all areas of trade cooperation.

I note that international activities are carried out in accordance with the provisions of the Treaty on the EAEU, which this year marks 5 years.

Thus, the heads of the EAEU Member States supported the proposal on the initiative of holding the anniversary meeting of the Supreme Eurasian Economic Council in Astana in honor of the 5th anniversary of the EAEU Treaty, as well as the 25th anniversary of the idea of ​​Eurasian integration.

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In 2019, the Government will continue to work on the implementation of existing agreements aimed at further developing cooperation within the EAEU. At the same time, we plan to place particular emphasis on:

1. Improving the provisions of the Treaty on the EAEU, by making the amendments developed to date in the field of customs and technical regulation, SPS, information interaction, transport and competition (62 amendments).

2. Removal of obstacles in the mutual trade of the EAEU in accordance with the adopted Action Plan (“road map”) to eliminate exemptions and restrictions on the internal market of the EAEU for 2018-2019.