Description
At the Russian Cabinet meeting on 11 June 2009 the Minister of Economic Development, Mrs. Elvira Nabiullina, described a new trade policy strategy for Russia. She introduced a document titled “The Project of Main Directions of Customs Tariff Policy for the year 2010 and for the period 2011-2012”, which was developed jointly by the Ministry of Economic Development, the Ministry of Finance, and the Federal Customs Services of the Russian Federation. This strategy takes into account the main points of other major statements of Russian state policy, namely, “The Concept of Long-Term Social-Economic Development of the Russian Federation until 2020”, “The Main Directions of the Activity of the Government of Russia until 2020” and “The Main Directions of External Economic Policy of the Russian Federation until 2020.” This new perspective on the Russian trade policy also refers to the goal of creating a Customs Union of Belarus, Kazakhstan and Russia.
A page description of Russia’s new trade strategy is available on the cabinet office’s website. Two stages are planned for Russian customs tariff policy. The first stage (lasting until the end of the year 2010) is characterized as “softening the crisis” phase. In this stage “the customs tariff policy is a part of anti-crisis economic policy. Thus, the implementation of the customs tariff measures will be directed to the balanced protection of the interests of the state budget, domestic producers and consumers.”
“The second stage – 2011-2012 years – is characterized by stabilization of the Russian economy and the move towards sustainable development. The main objectives of that period are the restoration of the balance between protectionism and regulatory functions of customs tariff policy as well as the formation of the potential for the sustainable post-crisis economic development.”
While a complete statement of Russia’s new trade strategy has not been made public, the Ministry of Economic Development has posted on its website several newspaper articles referring to this new strategy. While these newspaper articles are not statements of Russian policy, and readers are cautioned accordingly. What follows is a summary of the main aspects of new trade strategy as reported in the newspaper articles that the Ministry has chosen to highlight (and therefore bring to the attention of others.)
An “attachment #1” to this new policy document described various aspects of customs tariff policy in 2010. According to this attachment all domestically produced goods in Russia will be divided into 5 groups according to their level of international competitiveness. The “stable competitive products at the internal market” are raw materials, preprocessed metallurgic production, chemical production as well as timber. The tariff treatment of these products will be “stable and allows solution for fiscal objectives.” The reference to fiscal objectives may mean resort to export taxes.
Rolled iron and steel pipes, plastic, paper, cardboard, tracks, railways equipment, cement, construction materials as well as some food items belong to the group of “middle level of competitiveness”. For these products temporary quotas and increased tariffs could be implemented.
Further restrictive measures are suggested for the following products: cars, car parts, engines, paints and varnishes, household chemistry, tires as well as some items of food (including meat). All of these goods could be subject to low import tariffs on associated materials, parts, and components used in production; higher tariffs would prevail on final goods . The attachment, however, also states that the import tariff on new cars could be lowered should there be gradual import substitution and high import tariffs retained on used cars.[1]
The new strategy calls for what might be called significant policy space.
Should the Customs Union of Russia, Belarus and Kazakhstan be created then there would be a partial transfer of the external economic regulation functions from the nation level to a supranational body of the Customs Union, principally to the envisaged Customs Union Commission.
[1] “Komersant” newspaper. “Tamozhnu berut za ruchagi: tamozhenno-tariffnaya politika budet uzhestochatsya po mere nadobnosti”, by Peter Netreba, #1101, 11.06.2009, p. 3. This article is taken from the official website of the Ministry of Economic Development of the Russian Federation (the Press overview on June, 11th 2009). Available atwww.economy.gov.ru/wps/wcm/connect/economylib/mert/resources/dba236004e6f643db6b8f70f83b501f9/obzor_smi_11062009.doc>