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CIS free trade zone includes sugar import exemption with Ukraine

October 20, 2011, 9:55 UTC+3

The creation of a free trade zone in the Commonwealth of Independent States (CIS) envisages one waiver concerning sugar imports with Ukraine

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MOSCOW, October 20 (Itar-Tass) — The creation of a free trade zone in the Commonwealth of Independent States (CIS) envisages one waiver concerning sugar imports with Ukraine and the application of export duties according to the commitment on liberalisation fixed in the agreement, the Russian Economic Development Ministry told Itar-Tass commenting on a free trade agreement signed by the CIS member states on Monday.

“Parties to the free trade agreement do not apply import and export duties in mutual trade, except for the waivers,” the ministry noted. “When creating a list of waivers the sides were guided by the obligations laid down in the protocols on waivers to the bilateral agreements on a free trade zone, as well as by obligations on their cancelling.” The ministry also said that the parties “will not expand the list of waivers and will seek to phase them out.”

In addition, a ministry official explained that the contracting parties undertook not to establish any prohibitions or restrictions other than those permitted by the rules of the World Trade Organization (WTO) - restrictions relating to ensuring the balance of payments, health protection, etc. Also, the agreement provides for the application of “special protective, antidumping and compensatory measures.” The Economic Development Ministry did not specify the nature of these measures.

It is planned to ratify the agreement in late 2011 - early 2012. “It will come into force 30 days from the date of receipt by the depositary of the notification of the completion by the signatories of the internal procedures required for its entry into force,” the ministry explained.

On Monday, the heads of government of Russia, Ukraine, Belarus, Kazakhstan, Armenia, Kyrgyzstan, Moldova, and Tajikistan signed in St. Petersburg an agreement on a free trade zone. Russian Prime Minister Vladimir Putin said at a press conference after the meeting that Azerbaijan, Uzbekistan and Turkmenistan “will explore the possibility to join the agreement by the end of this year.”

The agreement on a free trade zone is intended to replace the outdated 1994 agreement, which was ratified not by all countries, including Russia.

The Commonwealth of Independent States is a regional organisation whose participating countries are former Soviet Republics, formed during the break-up of the Soviet Union.

The CIS is comparable to a very loose association of states and in no way comparable to a federation, confederation or supra-national organisation such as the old European Community. It is more comparable to the Commonwealth of Nations. Although the CIS has few supranational powers, it is aimed at being more than a purely symbolic organization, nominally possessing coordinating powers in the realm of trade, finance, lawmaking, and security. It has also promoted cooperation on democratisation and cross-border crime prevention. Some of the members of the CIS have established the Eurasian Economic Community (EurAsEC) with the aim of creating a full-fledged common market. The Eurasian Economic Community originated from a customs union between Belarus, Russia and Kazakhstan on the 29 March 1996. It was named the EAEC on 10 October 2000] when Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan signed the treaty. EurAsEC was formally created when the treaty was finally ratified by all five member states in May 2001. Armenia, Moldova and Ukraine hold observer status. EurAsEC is working on establishing a common energy market and exploring the more efficient use of water in central Asia.

The CIS consists of Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.

The agreement will abolish the export and import duties on many goods. However, the agreement makes certain exemptions - a number of products to which the contract will not apply. However, this is a temporary measure: the treaty establishes a specific time period during which all of these exemptions will be eliminated. Putin drew attention to the fact that in the first half of this year the trade turnover between the CIS countries increased by 48 percent and exceeded 134 billion dollars. “In 1994 a treaty on free trade was signed, but not all CIS countries, including Russia, have ratified it. In fact, it has never worked,” Putin recalled. “If today we are developing at such a pace without actually having this treaty, then just imagine how quickly our trade might be growing, if such a zone were operational,” he added.

The participants in the meeting were obviously pleased with the signing of the treaty. Ukrainian Prime Minister Nikolai Azarov expressed the hope the treaty would enter into force in January 2012, although the agreement still must be ratified at the national level in each country.

“It’s a great day, which confirms that the CIS is moving in the right direction,” said Armenia’s Prime Minister Tigran Sargsyan.

Belarussian Prime Minister Mikhail Myasnikovich called the agreement “a step towards the goals that Vladimir Putin identified in his article in the daily Izvestiya, dedicated to the integration of the former Soviet Union.”

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