Trade Regimes

Free Trade Regime

The free trade regime is one of the most effective forms of international economic integration. Establishment of this regime is carried out on a contractual basis between the states having a very high level of trade, economic and political cooperation.

The free trade regime provides for the abolishment of tariffs and quantitative restrictions in bilateral trade. Exemptions are possible in free trade regimes for extra sensitive products.

In 1992 the Republic of Belarus started concluding free trade agreements with trade partners. Nowadays there are bilateral governmental agreements on free trade with Azerbaijan, Armenia, Kyrgyzstan, Tajikistan, Kazakhstan, Moldova and Russia.

Belarus is also a member of the Agreement on free trade zone from April 15, 1994 (with alterations of April 2, 1999), signed by the CIS states.

On March 31, 2009 the intergovernmental agreement on free trade between Belarus and Serbia came into force.

In the framework of the Customs Union of Belarus, Kazakhstan and Russia all members work to harmonize trade regimes with third countries. Representatives of all member states of the Customs Union are members of a single negotiating delegation.

To date a unified trade regime was agreed with Serbia and Montenegro. Experts are working on harmonization of conditions of trade with the others CIS states and Georgia. They are also busy preparing a new multilateral treaty on free trade zone in the CIS.

Many states have expressed interest in establishing preferential trade conditions with the Customs Union — a free trade regime. For example, there are proposals from members of the European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein), New Zealand, Vietnam, Egypt and Syria. In November 2010 the negotiations with these countries were launched.

Most-Favoured-Nation Regime

Most-Favoured-Nation (MFN) treatment means the establishment in international treaties and agreements of provisions, whereby each contracting parties must provide to the other party the same favourable conditions in the field of economic, trade and other relations as it would do to any third state. MFN is exercised on a reciprocal basis through the conclusion of multilateral and bilateral treaties.

The MFN-treated countries for Belarus are listed in Appendix 3 of Presidential Decree No. 699 dated 31 December 2007 “On the establishment of import duties”.

Preferential Regime (System of Preferences)

Preferential treatment is provided by developed countries unilaterally and encompasses trade preferences (preferences) to developing and least developed countries on the principles of universality, non-discrimination and non-reciprocity.

From 1 January 2010 in connection with the Customs Union of Belarus, Kazakhstan and the Russian Federation to promote the economic development of developing and least developed countries in the customs territory of the Member States of the Customs Union applies a unified system of tariff preferences of the Customs Union.

According to the Protocol on the unified system of tariff preferences of the Customs Union on December 12, 2008, the Commission of the Customs Union specified a list of users entitled to the unified system of tariff preferences of the Customs Union and a list of goods originating from developing countries and least developed countries in respect of which the import to the customs territory of the Members of the Customs Union provides tariff preferences.

Decision of the Customs Union Commission No. 130 date dNovember 27, 2009 “On the unified customs tariff regulation of the Customs Union of Belarus, Kazakhstan and the Russian Federation” approved the following:

- list of developing countries — users of the system of tariff preferences of the Customs Union;

- list of least developed countries — users of the system of tariff preferences of the Customs Union;

- list of goods originating and imported from developing and least developed countries, which are granted import tariff preferences.

According to Article 7 of the Agreement on a unified customs tariff regulation on January 25, 2008, in respect of goods originating from developing countries, users of a unified system of tariff preferences of the Customs Union and imported into the customs territory included in “the list of goods”, the rates of import duties are 75 per cent of import customs duties of the unified customs tariff of the Customs Union.

In respect of goods originating from least developed countries, entitled to the unified system of tariff preferences and imported into the customs territory as included in “the list of goods”, the rates of import duties are zero.

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