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Free Trade Agreements Allow Intensifying Participation in Global Value Chains

Free Trade Agreements Allow Intensifying Participation in Global Value Chains

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9/6/2019

Veronika Nikishina, Member of the Board – Minister in charge of Trade of the Eurasian Economic Commission (EEC) told about the comprehensive task of the Eurasian Economic Union (EAEU), which implies identifying priority development areas and competitive advantages of national high-tech industries to be included in the most promising and rapidly developing global chains, as well as about pursuing a balanced foreign economic policy of the EAEU countries in relation to third countries for strengthening production relations and eliminating trade barriers during the discussion “Including the Far East in Global Value Chains: Effective Strategies”. The event was held as part of the Eastern Economic Forum 2019.

“We go on a premise that the conclusion of free trade agreements is neither a fleeting trend nor an attempt to catch up with other countries, but rather a purely conscious policy that helps to form cooperative connections, or, in other words, value chains with countries, whose markets are of specific interest to us in terms of export potential. Today, economic efficiency predetermines the cooperative process of creating a finished product, and our task is to eliminate as much expenses associated with cross-border trade as possible from the composition of the cooperative product cost”, - said Veronika Nikishina.

The EEC Minister in charge of Trade noted that a survey of the EAEU business community revealed a number of problems that most companies interested in entering foreign markets and participating in value chains face. In particular, such barriers traditionally include the need to liberalize customs tariffs, the complexity of product certification, and the lack of information about opportunities for establishing partnerships. Free trade agreements are intended not only to create conditions for increasing export trade by lowering tariffs and removing the above-mentioned barriers, but also to create favorable conditions for inter-corporate and cooperative deliveries.

As a result of the agreement with Vietnam, the trade turnover increased significantly from 4.3 billion US dollars in 2016 to 6.7 billion US dollars in 2018, while the commodity nomenclature of mutual trade grew by more than 10%.

“Liberalization of other procedures, for example, customs administration or technical barriers represents additional trade policy tools, which we intend to use to help businesses integrate into chains”, - Veronika Nikishina emphasized.