Customs Union members team up to protect domestic manufacturers in WTO

Tariff protection plummets once a country joins the WTO. The liberalization of trade terms is the primary concern for economic operators because they are accustomed to working in conditions of high tariff protection, said the official. In this situation the Customs Union member states intend to take certain measures. Falling short of compensatory measures, the joint measures will be able to support domestic manufacturers and make them more effective on the market, BelTA reports.

Belarus will keep higher duties on mechanical engineering products - wheeled and transport vehicles - until it joins the WTO. "By doing it, we have left protection for MAZ and BelAZ in place. It is one of the things meant to support their competitive ability," said Alexander Guryanov.

Manufacturing cooperation projects are another means of support. "We should compete with each other less on the common market. We should create joint products that will compete with third-country products in the most effective way," said the Deputy Foreign Minister. Plans for the joint operation of Belarusian MAZ and Russian KamAZ are being discussed in view of this.

Government purchases are another part of the process. Aiming for the WTO, Customs Union member states do not fix an equal access of third countries to their market of government orders. It is also considered as "an additional element of protection for our enterprises". Belarus and Russia already have a national regime for access to government orders. "We can lose somewhere but we can win a lot on the multibillion market of Russia's government orders. It can be considered as an additional revenue for manufacturers," said Alexander Guryanov.

In addition, the three countries are discussing programs for the joint support of exporters. They are willing to tune the banking system and the tax system to favor domestic manufacturers. "It will give us an additional chance," stated the Deputy Foreign Minister.

Support and subsidizing programs are another way to aid domestic manufacturers. They remain in place but they will be limited by the arrangements of the three countries that disallow abuse of industrial and agricultural subsidies. The WTO has the same requirements, clarified Alexander Guryanov. "We can support exporters, give them loans and tax incentives but net subsidies will have to be limited to reasonable sums. As part of the WTO Russia has undertaken such an obligation. The three countries have agreed that the national measures to support manufacturers that Russia is working out will be discussed in Belarus or Kazakhstan and mutually tied," said the Deputy Foreign Minister of Belarus. In his words, by doing it the Customs Union members will be able to alleviate WTO entry consequences in order to avoid extra competition on the common market of the Customs Union.

Alexander Guryanov also said that the average tariff protection of the Customs Union members was about 10.5%. It is stipulated by the unified customs tariffs. In the future, in seven years from now, it will have to be gradually reduced as part of Russia's obligations to the WTO to reach 7.5-8%. It is not that low in comparison with other countries, believes Alexander Guryanov. As part of the WTO the European Union keeps the tariff protection at 4-5%, with the figure in Ukraine at 4.6%.

Read more here http://news.belta.by/en/