Agreements on free trade in goods
1.1. Agreements on free trade in goods
The Republic of Belarus successfully uses various tools to expand its foreign trade, especially integration processes that represent an integral part of the modern international trading system.
The Republic of Belarus has bilateral free trade zone agreements with Azerbaijan, Armenia, Kyrgyzstan, Tajikistan, Kazakhstan, Moldova, Russia, Uzbekistan, Turkmenistan, Ukraine and Serbia.
On October 18, 2011 the CIS Free Trade Agreement was signed, its participants include Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Ukraine.Uzbekistan acceded to the Treaty separately.
The Republic of Belarus is also a party to the
Agreement on the Establishment of a Free Trade Zone dated April 15, 1994.
(as amended on April 2, 1999), signed within the framework of the CIS.This agreement shall apply in mutual trade between Belarus and Georgia(after the latter's withdrawal from the CIS).
With the establishment of the Eurasian Economic Union, agreements on free trade in goods can only be concluded in the format "EAEU (as a Union) + third party" (Article 35 of the Treaty on the EAEU). In this respect, in collaboration with the Eurasian integration partners, the Republic of Belarus is working actively to create free trade zones between the EAEU and third countries for its exports geographical and product diversification.
On May 29, 2015, the Free Trade Agreement was signed between the EAEU, its Member States of the one part, and the Socialist Republic of Vietnam of the other part. The agreement entered into force on October 5, 2016. This international agreement provides for the removal or significant reduction of import duties on almost all key Belarusian exports to Vietnam.
On October 25, 2019, the Agreement on Trade and Economic Cooperation with China dated May 17, 2018 entered into force. The agreement does not provide for the creation of a free trade regime, at the same time it is aimed at eliminating sanitary and technical barriers to trade, developing sectoral cooperation with China in the areas of advanced technologies, innovations, transport and logistics infrastructure.It provides for the rules on ensuring freedom of transit, which creates favorable conditions for Belarusian enterprises’ participation in production and transport chains as part of the Chinese leadership's "One Belt, One Road" initiative.
On October 27, 2019, the Interim Agreement leading to formation of a free trade area between the Eurasian Economic Union and its Member States, of the one part, and theIslamic Republic of Iran, of the other part, dated May 17, 2018 entered into force. According to the terms of the Interim Agreement, import customs duties in trade between the EAEU countries and Iran are reduced or eliminated at the limited coverage. In accordance with the Decision of the Supreme Eurasian Economic Council dated December 11, 2020 No. 16, the EAEU member states have begun negotiations with the Iranian side on conclusion of a full-length free trade agreement.
Negotiations with the Republic of Singapore on trade in goods have been completed. Free Trade Agreement between the Eurasian Economic Union and its Member States, on the one hand, and the Republic of Singapore, on the other, and the Framework Agreement on Comprehensive Economic Cooperation between the Eurasian Economic Union and its member states, on the one hand, and the Republic of Singapore, on the other, were signed at the meeting of the Supreme Eurasian Economic Council on October 1, 2019. Currently, efforts are being made to ratify the agreements (the Republic of Belarus has completed the relevant procedures).
Negotiations on the unification of the trade regime with Serbia in connection with the accession to the EAEU of Armenia and Kyrgyzstan, which do not have a free trade regime with Belgrade (only Belarus, Kazakhstan and Russia have bilateral agreements on a free trade zone with Serbia) have been completed. Free Trade Agreement between the Eurasian Economic Union and its Member States, of the one part, and the Republic of Serbia, of the other part, was signed on October 25, 2019 and entered into force on July 10, 2021.
In order to further liberalize the conditions for the access of goods of the Member States to the markets of third countries of the EAEU, the creation of free trade zones for goods with Egypt, Israel and India is currently negotiated.
In accordance with the reports of the Joint Feasibility Study groups, it is expected that the conclusion of free trade agreements with the above-mentioned countries will allow the Republic of Belarus to increase the export of the following goods:
Egypt - dairy products, mineral fuels, vehicles, products of animal origin, tobacco products, alcohol, sugar, meat;
Israel - flour, dairy products, meat products, oil, fertilizers, mineral fuels, vehicles;
India - ferrous metal products, paper and cardboard, plastics, oil and fuel, electrical machinery and equipment, vehicles, fertilizers.
According to the results of econometric modeling, in case of full trade liberalization without trade exceptions, the conclusion of free trade agreements with Egypt, Israel and India will increase the export of Belarusian goods to these countries by 17.5%, 17.3% and 20.0%, respectively.
The EAEU Member States, together with the EEC, have identified the following countries as representing the greatest economic interest for concluding free trade agreements in the medium term: UAE, Indonesia, Mongolia.
1.2 Agreements on free trade in services and investment
With the deepening of the internationalization and globalization processes, the areas covered by these processes have expanded, including the service sector. The result was the acceleration in the growth of international trade in services, as well as the need to undertake measures for trade in services liberalization.
However, trade in services liberalization, in contrast to trade in goods, is carried out not by lowering customs tariff barriers, but by changing national regulations and removing restrictions on the movement of foreign investment.
The form of realization of the trade in services liberalization process is the conclusion by states of agreements on free trade in services, which are a kind of regional trade agreements (RTAs), and their performance corresponds to Article V of the General Agreement on Trade in Services (GATS).
World practice confirms that at the turn of the XX-XXI centuries the conclusion of the RTAs has intensified, including in the service sector. Thus, according to the WTO, as of 1 February 2022, 353 regional trade agreements were notified, including: 170 relating exclusively to trade in goods, 181 relating to trade in goods and services, 2 agreements covering only trade in services. This leads to the conclusion that 51.8% of all notified regional trade agreements affect liberalization of trade in services.
To date, the Republic of Belarus has only one preferential agreement in the service sector, which is the agreements on trade in services within the framework of the Eurasian Economic Union (Section XV "Trade in Services, Establishment, Activities and Investment" and the Protocol on Trade in Services, Establishment, Activities and Investment (Appendix No. 16 to the Treaty on the EAEU).
The Republic of Belarus, like all Members of the Union, retains autonomy (i.e., national competence) in matters of concluding agreements on free trade in services and investments. The process of concluding such agreements with third countries is carried out independently of the partners in the Union. The only condition prescribed in the Treaty on the EAEU is the obligation of the Republic of Belarus to provide to the Member States of the EAEU the same concessions, which are granted to the partner (partners) under that agreement (Article 38 of the Treaty and section 6 of Annex No. 16 to the Treaty).
In this respect, currently the several steps are taken to conclude new preferential service agreements. The coordination of work on the preparation of international agreements in the field of trade in services is carried out by the Ministry of Economy of the Republic of Belarus.
The Ministry of Economy of the Republic of Belarus, together with interested governmental bodies, is working to conclude agreements on free trade in services and investment with Singapore, Turkey (without an investment chapter), China, as well as within the CIS.
In 2022, it is planned to complete the negotiations started in 2017 on a service-investment agreement with Singapore. The EAEU Member States' bilateral agreements in trade in services are complementary to the Free Trade Agreement on Goods, concluded on October 1, 2019 in order to create a comprehensive free trade zone between the EAEU and Singapore.
In accordance with the Memorandum of Understanding between the Ministry of Economy of the Republic of Belarus and the Ministry of Trade and Industry of the Republic of Singapore of June 4, 2019, the level of obligations of Belarus for Singapore under the Agreement should be generally higher than the level of obligations in the WTO (the so-called "WTO plus").
In 2020, negotiations on agreement on free trade in services with Turkey have started. On June 10, 2020, the Statement of work for the negotiations on the Agreement on Free Trade in Services between Belarus and Turkey were signed. This agreement covers only issues of trade in services (without an investment chapter) and is based on the classic GATS model. In addition, the agreement includes a variety of chapters relating to specific rules for regulating and establishing cooperation in sectors of mutual interest (educational services, healthcare services, transport and logistics, telecommunications and financial services, etc.).
On December 14, 2020, the Joint Statement between Belarus and China was signed, which began the negotiations on concluding an agreement on free trade in services and investment. In April 2021, the parties approved the Statement of work for the negotiations,that defines approaches to the architecture of the agreement, its content and procedural aspects of the negotiation process. The parties intend to complete negotiations on the agreement in 2023.
Within the framework of the Commonwealth of Independent States, the work on the Agreement on free trade in services, establishment, operation and investments has been underway for almost 10 years (since November 2012).
As a result of the mutual efforts, it is highly likely to complete negotiations on the Agreement and sign it in May 2022, which will create more opportunities for increasing economic cooperation between the CIS countries and will increase the share of trade in services in the total trade volume of the CIS countries up to 25%.
The conclusion of these agreements will allow the Republic of Belarus to remove obstacles to Belarusian exports of services to foreign markets, increase the turnover of cross-border trade in services with partners under agreements, signal the potential investors about the Belarusian economy specific sectors access conditions, thereby facilitating the FDI inflow, stimulating the development of trade and economic cooperation with these countries through the creation of a transparent and predictable environment.
The conclusion of regional trade agreements in the service sector as a full-length instrument of foreign trade policy of the Republic of Belarus for the first time has been indicated in the planning and program documents of the country.
Thus, the implementation of this goal is provided for by Chapter 10 “Development of foreign economic activity” of the Program of Activities of the Government of the Republic of Belarus for the period up to 2025, approved by the Resolution of the Council of Ministers of the Republic of Belarus dated December 24, 2020 No. 758. This approach also confirmed in the Program of Socio-Economic Development of the Republic of Belarus for 2021-2025 (Chapter 8).
At the same time the Ministry of Economy continues analysis to identify promising partners for concluding service-investment agreements in the medium term. If You are aware of any obstacles to access to foreign markets for services and investments, or there is an interest in obtaining preferential conditions for access, You are welcome to leave your suggestions (firstname.lastname@example.org).