“Despite the fact that a number of benefits that should come out from this Union haven’t appeared in practice yet, it is evident: introduction of the common customs tariff (CCT) and elimination of non-tariff barriers already influences inner trade relations between these three Union members, as well as outside relations with other world countries,” the EBRD study reports.

Economists of the international organization believe that previous efforts to reach economic integration at the post-Soviet level didn’t have any practical results. Moreover, creation of the Customs Union allowed to start up a mechanism of integration processes in trade sector. The EBRD executives assume that the Customs Union promises a number of perspective benefits as development of trans-border infrastructure and institutional mechanisms strengthening.

The business volume between three countries has doubled since the creation of the Union. This growth was mainly reasoned by economic renaissance of the countries after a crisis, as well as a decrease of non-tariff barriers, and, for some extent, by introduction of the CCT, the EBRD report says. According to the report’s authors, non-tariff barriers have traditionally been a serious obstacle on a way of trade development in the member countries of the Customs Union (in particular, time of passing customs formal procedures for products crossing the borders). Meanwhile, non-tariff barriers influence trade much more than traditional tariffs – for example, import tariffs. Moreover, the export structure of products from Belarus, Kazakhstan and Russia allows us to assume that the regional economic integration may become a platform for exporting products to other world countries.

“Increased value-added goods previously exported in frames of this regional block may be further exported to other destination points,” says the information message of the international organization. The report simultaneously notices that introduction of the Common Customs Tariff in Belarus and Kazakhstan has negatively influenced their trade volume with China, and, to a smaller extent, with the EU (volumes of imported goods that get under the tariff, have decreased by 2-3%). Kazakhstan has increased a volume of products imported from Russia as import of Chinese goods became more expensive for the Kazakhs. “Today, as it is assumed, only Russia feels that positive effect made by the Customs Union in terms of developing trade volume through introduction of the CCT; Russia got many import duties decreased as a result of the Customs Union creation,” the EBRD officers believe.

Project Group №4