Labor tariffs

Moscow almost lured Minsk and Astana into its customs space, but now risks falling out with the EU again

Almost ten years ago, the Kremlin discussed a project called "Kazakh underbelly". It was about the union state of Russia and Kazakhstan, and the real one, and not like with Belarus. They talked about a single currency and even common law enforcement agencies. The head of the presidential administration Alexander Voloshin traveled to Kazakhstan, and Kazakh "young reformers" came to Moscow. The necessary papers have been prepared. But Putin at some point changed his mind, deciding that Russia would push other CIS countries away from itself by such a tight link with Kazakhstan. Rapprochement did not work then, but the idea remained.

Last week, Russia, Belarus and Kazakhstan again knocked on the doors of the WTO. Now the position of the three - each will enter separately, but on the same terms. The main thing is that now the members of the union know which ones. Newsweek obtained documents agreed by the vice-premiers of the three countries at the end of September - a single customs tariff and tripartite agreements. The presidents will sign them in November. The West does not like the idea of ​​the union: the WTO secretariat in Geneva believes that Moscow has lost interest in it, and Brussels fears that the union will hinder economic relations between Russia and the EU.

FIGHT FOR INTEREST

The uniform tariff is based on Russian norms. 83% of the duties in force in Russia will not change after the creation of the union. But still, rates will increase for 350 types of goods, and they will have to be reduced for almost 1,500 types. This reduction will not affect the main consumer goods, so it will not become especially cheaper to live. Kazakhstan is even less fortunate - it will have to rewrite almost its entire customs tariff, duties will rise by 5,100 positions, which means that imports will become more expensive. It is not surprising that they decided to take Russian rates as a basis, says an employee of the Federal Customs Service: our market is the most capacious and in any case affects its neighbors.

“We are pleased with the result,” says Alexei Likhachev, director of the Department for Foreign Economic Affairs of the Ministry of Economic Development. He explains that the delegation from Moscow had three directives at the talks. First: stick to Russian rates. Second: if this does not work out, establish duties not for the sake of replenishing the budget, but to regulate the markets. Third: in case of disputes, make decisions based on the balance of consumption and production already in a single customs territory.

The main struggle unfolded around the cars, say the negotiators. The position of Russia won, for which it was fundamentally important to keep high duties on foreign cars.

So the duties will become high for the entire Customs Union. The rates adopted by Russia since the beginning of the crisis will be set throughout its territory: 30% for new cars, 35% for used cars. Belarusian and Kazakh motorists are not lucky. Neither country has tried to block foreign cars before - they have practically no production of their own. Russia is ready to saturate the Kazakh and Belarusian markets with locally produced cars, an employee of the Federal Customs Service assures.

Union governments run the risk of running into protests, the increase in duties on cars is perceived very painfully, says Oleg Datskiv, development director of the Internet portal Auto-Dealer.ru. Now it will definitely become more difficult for Kazakhstan and Belarus to join the WTO, especially to come to an agreement with Japan, which requires free access of its cars to all markets.

The Russian side did not limit itself to high duties. Foreign automakers will have to open production in Kazakhstan and Belarus according to Russian rules. They will receive tax breaks if they promise to produce at least 25,000 cars a year and buy at least 30% of auto components on the local market. This item was included at the initiative of the Russian side, so that a screwdriver assembly would not be organized in the territories of Belarus and Kazakhstan, says an employee of the FCS. China is ready to organize such production anywhere at any time. AvtoVAZ is a much better alternative, they are sure in Russia.

But Belarusians and Kazakhs fought for sugar with great success. As a result, a draw. “We have long-term contracts with Cuba and other Latin American countries to buy cane sugar,” explains Gulnur Rakhmatulina, chief researcher at the Kazakhstan Institute for Strategic Studies. Overseas sugar is not subject to duty and is cheap; Kazakhstan does not want to set a high duty after Russia. Therefore, Astana won time for adaptation - until 2019, import sugar in the same way as now. At the same time, Kazakhstan has no right to apply restrictive measures for the import of Russian or Belarusian sugar.

But the Allies have yet to ensure that the sugar stays in Kazakhstan and doesn't spill over into Russia and Belarus.

NOT THAT MORTADELLA

As for the concessions from Russia, there are no principal ones among them. For example, an increase in duties on sausage - the sausage market is almost entirely domestic. Finnish serverat - he's not Finnish. “We don’t eat any mortadella,” explains an employee of the Dymov sausage holding.

Reducing import duties on imported household appliances is also not the most important issue. Kazakhstan insisted on this. Mixers and irons are not made in Russia. But they are still a little cheaper. The vice-president of Technosila, Leonid Tyukavkin, promises that prices in stores will drop following duties.

But clothes will rise in price. The rate of import duty itself is reduced from 20 to 10%, but the minimum fee for each kilogram of imported clothing, set in euros, is increasing. More than 90% of imports go to Russia from Turkey and China, a government official explains, clothes are very cheap there, so it’s not the interest rate that is more important, but the fee - when it is increased, the clothes brought from there will rise in price. However, the Russian government, even without the Customs Union, tried to deal with shuttles and gray clothing imports.

The Allies have developed a procedure for the future: what to do if it is necessary to change the duty on one of the "sensitive goods". There are more than 2000 of them: milk, bread, alcohol, clothes, cars and so on. It will be possible to change them only by consensus - the three of us. In other cases, 75% of the votes are needed to change the fees. Belarus and Kazakhstan each have 22% of the vote, while Russia has 56%. To push through its initiative, Russia will simply have to come to an agreement with someone.

THE PROCESS IS ON

For the Customs Union to actually function, 26 agreements must be signed. So far, 16 have been signed. They will operate only in combination - if one is not signed, then the machine will not work. “A single tariff for pencils has not been approved, and that's all,” explains a source close to the presidential administration. In the EU, a single customs tariff has been developed for about ten years. Members of the Customs Union did it in three months. “The document will be signed in November, but how it will work is not clear. The main thing is to show the WTO that the process is underway,” says the source of Newsweek.

At the consultations held this week in Geneva, everyone just got confused, says Alexei Portansky, head of the information bureau on Russia's accession to the WTO. Representatives of about fifty countries asked the allies many questions about the structure of the Customs Union, about how decisions are made there. But it’s impossible to answer, since the union has not yet started working, says Portansky.

But Maksim Medvedkov, director of the Trade Negotiations Department at the Ministry of Economic Development, is an optimist. He told Newsweek that neither country would have to start negotiations over from the beginning. Belarus' negotiating positions do not differ much from those of Russia, with Kazakhstan the difference is more serious. In the course of negotiations, it will be necessary to come to a common denominator. Naturally, it is assumed that a single tariff is not yet the rates at which countries will live in the WTO. “This will be the basis, but as soon as we enter the WTO, rates will be adapted for a number of positions. For example, duties on foreign cars will have to be reduced,” Medvedkov explains.

But representatives of Kazakhstan doubt that they will be able to start negotiations where they left off. The harmonization of customs tariffs will force Kazakhstan to return to the issue of duties, which have already been discussed with WTO members, said Zhanar Aitzhanova, Kazakhstan's special representative in the talks.

Accession to the WTO is important for Russia, but a strategic, not a tactical task, says a source close to the Kremlin. She can be delayed. In addition, customs tariffs are just one of the areas that need to be negotiated within the WTO. There is no need to agree on all the other three states among themselves, so negotiations with the WTO can be conducted separately.

LETTER FROM BRUSSELS

At any moment, Belarus and Kazakhstan can revise the agreements. In early October, Kazakh Prime Minister Karim Massimov filed an appeal with the Constitutional Council on whether the Customs Union was legitimate at all. It is not entirely clear from the Kazakh constitution which is more important: international treaties or national legislation, the Russian official explains. According to him, Kazakhstan would like the decisions of the Customs Union to be non-binding and Astana to have the last word. Officially, the appeal to the court pursues purely technical goals - the Kazakhs need its formal interpretation, so that later lawyers would not have questions.

In addition, Kazakhstan has established a long list of tariff exceptions for which it wants to establish a transitional period. Including aluminum, nuclear reactors, plastic, wagons, furniture. For most of them, the rate will reach the single tariff only by 2014. This is only Kazakhstan's wish so far, says a government official who hopes the transition period will end sooner.

Belarusians do not ask for a transitional period. But the Belarusian leader is in his repertoire. In early October, Lukashenka accused Russian Prime Minister Vladimir Putin of all mortal sins: he cut off gas, undermines military cooperation, and does not give credit. In negotiations with the Belarusian leadership, nothing is ever known until a document is signed, Belarusian economist Yaroslav Romanchuk admits, and then nothing is known either.

Russia seems to have come out of the negotiations as a winner, but it may regret its victory. The customs union may once again drive a wedge between Russia and the EU. According to Newsweek, European Commission President Jose Manuel Barroso wrote a letter to Dmitry Medvedev last week about this.

Brussels has been negotiating a new partnership agreement with Moscow for years, to no avail. Now Brussels has come to the conclusion that it is pointless to continue them. According to a source in the Russian Foreign Ministry, the European Commission assumed that the agreement would be concluded after Russia joins the WTO. If this does not happen, then the Europeans will lose all interest in the agreement - it is economic cooperation that is important to them.

Barroso proposes that, since Russia is not joining the WTO, some of Russia's trade obligations should be written into a partnership agreement with the European Union. And then Russia will sort of enter into a mini-WTO, but only with Europe. But this will not suit Russia, the diplomat notes, it is unprofitable for Moscow to give certain preferences to Europe and at the same time remain cut off in these positions from other world markets. This means that the Customs Union puts an end to the negotiations between Russia and the EU. In addition, a source in the Foreign Ministry admits, the economic agreements with the EU expire on January 1, from the New Year in relations between Russia and Europe, the main trading partner, there will be a legal vacuum.

Mikhail Zygar, Yulia Taratuta contributed to the preparation of the article