A NEW ORDER OF GRANTING TARIFF PREFERENCES HAS COME INTO EFFECT
In March 2021, the Eurasian Economic Unit (EEU) revised the procedure of giving tariff preferences for developing and least developed countries. New rules come into effect from 12 October this year.
A single system of tariff preferences works in all member countries of the Eurasian Economic Unit: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. According to the system, importing particular goods from least developed countries is not subject to any customs duty whatsoever; duties for products imported from developing countries are cut by 25% from customs tariffs. The major share of granted tariff preferences falls on Russia. Among preferential goods are meat and meat co-products, fish, vegetables and fruit, as well as particular primary commodities and low-value products. This list was approved in 2017.
The list of countries enjoying tariff preferences had been adopted even earlier, in 2009, and has remained practically unchanged since. It included 153 countries, of which 103 were seen as developing and 50 as least developed.
The list of developing countries is now going to be reduced by more than three times; according to the new order, 75 states are no longer on the list: China, Singapore, Hong-Kong, the UAE, Korea, Malaysia, Argentina, and Brazil. Over the recent years, many developing countries have significantly increased the competitiveness of the produced goods and considerably improved economic welfare indicators. That puts these countries in a more economically favorable position as compared to EEU countries, which makes EEU support unnecessary.
The current list of least developed countries includes Angola, Chad, Ethiopia, Afghanistan, Cambodia, Nepal, and other countries with low living standards and unstable economy. This list has undergone changes, too, as decided by the EEU. Vanuatu, a republic in Oceania, will now be seen as developing, not least developed. The African Republic of Equatorial Guinea has been excluded from the list of least developed countries.
Expert opinions on the new order of granting tariff preferences vary. Some experts believe that such changes are likely to result in a significant increase of prices for goods from the countries that are no longer considered developing. Others think that no serious macroeconomic effect will follow. According to the statistics of the EEU foreign trade, overall tariff preferences for goods imported from developing countries are at $100 million. Introducing the new system will make it possible to keep these profits within state budgets of EEU members and direct them towards supporting national economies.