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Agreement on Free Trade Zone between the EAEU and Socialist Republic of Vietnam signed according to the results of the second session of the Eurasian Intergovernmental Council

Agreement on Free Trade Zone between the EAEU and Socialist Republic of Vietnam signed according to the results of the second session of the Eurasian Intergovernmental Council

5/29/2015

On May 29, in Burabay village (Kazakhstan), the second session of the Eurasian Intergovernmental Council took place. The summit was attended by the Prime Minister of the Republic of Armenia Ovik Abraamyan, Prime Minister of the Republic of Belarus Andrey Kobyakov, Prime Minister of the Republic of Kazakhstan Karim Masimov, Chairman of the Government of the Russian Federation Dmitry Medvedev, Prime Minister of the Republic of Kyrgyzstan Temir Sariyev, and Chairman of the Board of the Eurasian Economic Commission Viktor Khristenko.

According to the results of the session, the Agreement on the Free Trade Zone (FTZ) between the Eurasian Economic Union (EAEU), its Member States and the Socialist Republic of Vietnam was signed. The Agreement is the first international document on FTZ between the EAEU and a third party. As the Chairman of the EEC Board Viktor Khristenko noted in his statement to the press following the session, signing of the Agreement on the Free Trade Zone between the EAEU, its Member States and Vietnam is a "historic act".

Viktor Khristenko reported that the Agreement would ensure free trade regime in respect of over 90 % of commodity items regulated by the EEC. "Moreover, zeroing of the duty, exemption regime of admission to the markets in respect of a half of these commodity items shall take place since the entry into force of the Agreement, and after a short transition period in respect of the other half of commodity items," reported the Chairman of the EEC Board Viktor Khristenko. As the EEC representative emphasized, "implementation of the Agreement in general is aimed at increasing the current volume of trade turnover between the EAEU states and Vietnam that amounts to 4 billion dollars up to at least 10 billion dollars by 2020."

According to him, the Agreement covers not only preferential trade treatment, but also issues of the management of intellectual property rights, and a whole range of other areas.

Viktor Khristenko noted that this Agreement opened an area of work not only with the entire Republic, but "with Vietnam as a regional centre, a greater region of ASEAN that has more than 600 million citizens. Therefore, the entry into force of this Agreement will allow participants of the economic life of the EAEU to enter new markets and obtain mutual benefits," he concluded.

A wide range of integration issues concerning functioning of the Eurasian Economic Union, development of the regulatory framework, and implementation of a number of specific cooperation projects were discussed at the session of the Eurasian Intergovernmental Council.

In particular, the draft decision of the Supreme Eurasian Economic Council "On the main areas of the economic development of the Eurasian Economic Union" was approved. The draft document identifies nine areas, which determine the competitiveness of the Member States of the Union and integration cooperation in which is appropriate. Since the areas are formed on the horizontal principle, their implementation will be carried out through the development and implementation of system-wide as well as industry-specific and sectoral integration measures and actions that will be reflected in the medium and short-term documents provided for by the Treaty on the EAEU. In addition, the draft document introduces scenarios of the Union's economic development, potential effects of integration till 2030, the criteria on the basis of which the Commission and the Member States will prepare proposals on the definition of areas of the economy that have potential for integration, as well as measures to use this potential on a regular basis.

Analysis of the reasons for changing dynamics of mutual trade of the Customs Union (CU) and the Common Economic Space (CES) Member States conducted by the Commission, as well as proposals on increasing the volume of mutual trade turnover were also introduced at the session. Establishment of the dialogue on strengthening cooperation in the areas of coordinated policy stipulated by the Treaty on the EAEU is crucial. Business community requests creation of an attractive business and investment climate in the Union, which is possible by removing barriers and minimizing exemptions and restrictions.

In addition, the Disposition on deepening cooperation between the EAEU Member States in the fields of macroeconomic, monetary and financial policy was adopted, under which the Commission jointly with governments, national (central) banks of the EAEU Member States must prepare a report on integration measures to increase sustainability of the States' economy in the Union.

In the course of the session, the Disposition on development of the Regulation on establishment and functioning of the Eurasian Technology Platforms (ETP) was approved. The Regulation on ETP will ensure a clear step by step algorithm of building mutually beneficial cooperation of the EAEU States in the field of innovations.

The Action Plan to ensure stimulation of production and application of motor vehicles with electric engines in the EAEU Member States for 2015-2017 was supported at the session. Implementation of the Action Plan will contribute to the increase of demand for electric vehicles by citizens of the Union States.

Decisions taken by the Eurasian Intergovernmental Council in production of vehicles and equipment for the agricultural industry will allow moving to practical establishment of cooperative chains and development of import substitution of components for agricultural machinery produced on the territory of the Union, increasing the added value, and providing national access to government (municipal) procurement of the agricultural machinery. In addition, it is expected that the practical mechanism for the support of agricultural machinery export to the third countries markets, as well as the legal framework for enhancing cooperation in agricultural machinery engineering in the framework of the Union, will be created.

The EEC approved the Action Plan on development of the light industry of the EAEU Member States for 2015 - 2016 at the session. The document contains a range of measures aimed at creating conditions for increasing investment attractiveness and competitiveness of the industry. Their implementation will allow transferring to practical establishment of cooperative chains and development of import substitution for several segments of the light industry, and mastering new technologies.

Documents signed following the results of the session of the Eurasian Intergovernmental Council

- On the reasons for changing dynamics of mutual trade of the Customs Union and the Common Economic Space Member States in 2010-2014, and proposals on increasing the volume of mutual trade turnover in the Eurasian Economic Union Member States.

- On activities to discover and eliminate the barriers for mutual access, which prevent the operation of the Eurasian Economic Union domestic market, and exemptions and restrictions with respect to the circulation of goods, services, capital and workforce.

- On the Draft Decision of the Supreme Eurasian Economic Council "On the main areas of the economic development of the Eurasian Economic Union".

- On deepening cooperation between the Union Member States in macroeconomic, monetary and financial policy.

- On the Free Trade Agreement between the Eurasian Economic Union, its Member States of the one part, and the Socialist Republic of Vietnam of the other part.

- On the Agreement on the movement of ozone-depleting substances and products containing them, and recording of ozone-depleting substances while implementing mutual trade of the Eurasian Economic Union Member States.

- On the Action Plan on development of the light industry of the EAEU Member States for 2015 - 2016.

- On creating conditions for the development of machinery and equipment production for the agricultural industry in the Eurasian Economic Union Member States.