The establishment of the Common economic space of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation and its implications for Russia’s global integration, including WTO accession Deputy Minister for economic development of the Russian Federation ALEXEY LIKHACHEV Washington, D.C. - May 23, 2011 THE MINISTRY FOR ECONOMIC DEVELOPMENT OF THE RUSSIAN FEDERATION

2 The main goals of the Customs Union Formation of the Common Customs Tariff and the system of non-tariff regulation Formation of the Common Customs Tariff and the system of non-tariff regulation Launching the common Customs code Launching the common Customs code Transfer of customs control to the external borders Formation of the common trade regulations with the third countries Creation of the framework of enrollment and allotment of customs duties, taxes and fees

Launching the common customs tariff and non-tariff regulation Launching the Customs code of the Customs Union Transfer of customs control to the external borders of Belarus Launching the framework of enrollment and allotment of import customs duties Transfer of customs control to the external borders of Kazakhstan Abolishment of customs clearance procedure of the goods in the mutual trade within Belarus, Kazakhstan and Russia Common tariff territory (stages) Launching the Common economic space

4 Common Customs Tariff For Russia For BelorussiaFor Kazakhstan Increased: ►individual meat items ►ready-made canned meat ►individual metal items ►passenger cars Decreased: ►clothing ►carpets ►leather and textile footwear ►electrical machinery and equipment ►pharmaceutical substances Increased: ►mutton, horsemeat, goat meat ►ready-made canned meat ►yeast ►individual items and clothing accessories Decreased: ►exotic fruit juice concentrates ►food for baby feeding ►materials for photographic purposes ►wool and fabric ►pharmaceutical substances ►parts for shoes ►electric equipment Increased: ►transport group (including cars) ►wood ►refrigeration equipment ►pharmaceuticals ►household appliances ►clothing and footwear Decreased: ►certain types of agricultural products ►skins ►optical, medical instruments and devices

5 Determination of strategy and the main directions of development of the Customs Union (solutions - consensus) Determination of strategy and the main directions of development of the Customs Union (solutions - consensus) Regulating authority of the Customs Union (solutions - 2/3 majority or consensus ) Regulating authority of the Customs Union (solutions - 2/3 majority or consensus ) Execution of decisions Supranational institutions The highest authority of the Customs Union at the level of heads of state and heads of government Court of the EEC* State executive authorities Secretariat of the Commission of the Customs Union Commission of the Customs Union deputy heads of government Dispute resolution Russia – 57% Kazakhstan – 21,5% Belarus – 21,5% Distribution of votes Organizing the activities of the Commission *Eurasian Economic Community

6 Implementation of "four freedoms“ (free movement of goods, services, capital and labour force) Harmonization and unification of the standards of economic regulation in the key areas (competition, subsidies, public procurement, technical regulation, natural monopolies, intellectual property, etc.) Formation of integrated markets Coordinated macroeconomic and currency policies Common economic space of Belarus, Kazakhstan and Russia

7 20 million km 2 (15% of the earth surface) 4% of world GDP (PPP) 9% of world proved reserves of oil 11% of world exports of raw materials 13% of world exports of energy resources 80% of foreign trade turnover of CIS* countries 70% of mutual trade volume of CIS countries CES 25% of world proved reserves of natural gas 80% of GDP of CIS countries 170 million population *Commonwealth of Independent States

8 Macroeconomy CES agreements Free movement of labour force Free movement of labour force Free movement of goods and services Free movement of goods and services Natural monopolies Competition Industrial subsidies Agricultural subsidies Intellectual property Currency policy Financial markets Electric energy Railway transport Gas transportation Markets of oil, oil products Illegal migration Status of migrant workers Technical regulation Trade in services + investments Public procurement Common market of CES Energy, transport Free movement of capital Free movement of capital Common economy policy Common economy policy

9 Technical regulation Migration policy Industrial subsidies Agriculture Key CES provisions common list of products in respect of which common technical regulations of the Customs Union are adopted simplified procedure for residence and labour activity coordinated policy against illegal migration November 18, 2010 August-September 2011 grants in accordance with WTO rules August-September 2011 state aid not exceeding 10% of agricultural production

10 Trade in services and investment activity Competition Intellectual property Macroeconomic stability rates August-September 2011 national treatment and MFN favourable conditions for expansion of mutual trade in services and investment activities Key CES provisions January 1, 2012 January 1, 2013 common principles and rules protection against unfair competition prohibition on abuse of dominance national treatment in the field of conservation and protection of intellectual property rights common international legislation (obligatory international treaties: the Singapore Treaty in 2006, the Rome Convention 1961) budget deficit not exceeding 3% of GDP public debt not exceeding 50% of GDP inflation not more than 5 percent points above inflation in the CES country with the lowest price growth

11 Key CES provisions Railway transport Currency and financial markets Public procurement January 1, 2013 December 31, 2013 July 1, 2014 unified tariff for the transportation of goods by different types of communication: export, import and domestic harmonization of legislation in accordance with international standards in: -the banking field; -the foreign exchange market; -the equity market; -the field of insurance. equal access to procurement in electronic format

12 New Zealand Commonwealth of Independent States (Free trade area) European Free Trade Association Common Economic Space