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EAEU still in disagreement over distribution of import customs duties

Economy 06.12.2018 | 19:33

ST PETERSBURG, 6 December (BelTA) – The heads of state of the Eurasian Economic Union failed to reach an agreement on the distribution of import customs duties during the EAEU summit in St Petersburg on 6 December. Work on the matter will continue, BelTA learned from Chairman of the Board of the Eurasian Economic Commission Tigran Sargsyan on 6 December.

The sides discussed the matter rather thoroughly, but failed to come to a consensus. According to Tigran Sargsyan, several approaches to determining the standards for distributing the import duties are available. Reaching an agreement on the matter once and for all is one of them. “Because when a common market is evolving, it is very difficult to keep objective statistics of what each country imports for its own consumption,” said the official.

However, Belarus does not accept the approach. Belarus believes that the standards should not be set in stone for an indefinite period of time because the global economic situation is fluid and the countries should have the ability to regularly revise the distribution of import customs duties, for instance, every three years.

Belarus has several proposals on resolving the problem. Belarus suggests revising the current standards using statistics recorded in 2016-2018 and enforcing the new standards as from 2020. Anyway, the matter will have to be reviewed in 2019 since the current standards will expire by then.

For now the distribution scheme remains unchanged: Armenia – 1.22%, Belarus – 4.56%, Kazakhstan – 7.055%, Kyrgyzstan – 1.9%, and Russia – 85.265%.

Belarus would like to redistribute the import duties due to several reasons such as Russia's and Kazakhstan's WTO membership, the reduction of the universal customs rate, the presence and emergence of new exemptions, import reorientation and growth.

If the new standards are approved, Belarus' share will be raised by roughly 1%. During a recent session of the Eurasian Intergovernmental Council in Minsk Tigran Sargsyan suggested giving the 1% to Belarus by proportionally reducing the shares of the other countries. While Belarus is okay with the idea, the other countries refuse to do so for now.

Belarus would also like to increase its share by 0.75% by revising the shares of the Eurasian Economic Union's main economies – Russia and Kazakhstan. But apparently no consensus has been reached there either.

It is important for Belarus to resolve the problem because it needs to minimize its losses due to the negative balance of mutual transactions on import customs duties. In 2015 the losses totaled $44.7 million. In 2018 the figure reached $80 million.

Tigran Sargsyan said: “We will continue looking for a solution acceptable to all the five countries and will make a progress report during the next session.”

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