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Interview with the Director of the Industrial Policy Department of the EEC Nikolay Kushnaryov with Rossiyskaya Gazeta: Goods will soon bear the label “Made in the EAEU”

Interview with the Director of the Industrial Policy Department of the EEC Nikolay Kushnaryov with Rossiyskaya Gazeta: Goods will soon bear the label “Made in the EAEU”

11/16/2016

Goods manufactured in the countries of the Eurasian Economic Union, will soon bear the label: “Made in the EAEU”. The Eurasian Economic Commission (EEC) has started defining the criteria for "Eurasian goods".

The new Director of the Industrial Policy Department of the EEC Nikolay Kushnaryov told RG all about it. He stated that, the transition from using the labels "Made in Russia", "Made in Belarus" or any other EAEU country to "Made in the Eurasian Economic Union" is an important stage of integration cooperation. The new labelling could be launched as early as 2017.

Work is currently under way to develop the “calculation” mechanism for technological operations when executing joint manufacturing products. As a result, enterprises will have preferential access to public procurement and promoting products on the markets of third countries. These are two effective instruments of state support and a strong incentive for the hundreds of enterprises in the Union to cooperate.

As for Russia, this kind of preference requires criteria approved by the Government of the Russian Federation, Kushnaryov reminded. Russian manufactured goods that adhere to them already have preferential access to public procurement. For example, since January 2014 Russia has limited the public procurement of imported products for the defense industry, machine building, medical devices, pharmaceuticals, and software.

"Despite the fact that the resolution of the Russian Federation concerns Russian products, the document also concerns integration regarding products made by the EAEU Member States. For example, in terms of machine building goods, it sets out a requirement for engine production in Russia, but there is also an alternative - engines produced in Belarus can be counted as Russian," said Kushnaryov.

He stated that the introduction of the concept of "Eurasian goods", on the one hand, will simplify support for EAEU industry and, on the other hand, will be a powerful instrument for the promotion of industrial goods on the common market, and furthermore, will stimulate demand for products labelled "Made in the EAEU.”

It is inevitable that competition between Member States currently occurs. It is inevitable, especially in industries such as construction material production, pharmaceuticals, light industry, metallurgy, automotive, and the production of agriculture and railway equipment, machines and equipment for mining and the petroleum industries. Meanwhile, the problem is not so much competition, but that national governments apply differing measures of support for their businesses and this puts them in an unequal position in relation to each other. Therefore, the EAEU’s number one topic is equalizing the conditions of support in terms of subsidies, and a departure from unilateral measures which leads to discrimination between companies or impairs healthy competition on the common market.

In this regard, the EEC is discussing two ways to solve the problems which lead to an either partial or full transfer of authority regarding the provision of subsidies to industry to the supranational level, i.e. under the purview and control of the EEC.

The first version, a softer version, presupposes that Member States retain autonomy over granting subsidies for the production of particularly sensitive goods. They agree them with the EEC strictly on a voluntary basis. In principle, the Union countries are now moving along this path. The list of “sensitive" goods was approved by the Member States and they include the products of leading sectors: the automotive industry, light industry, metallurgy, the production of machinery and equipment for agriculture and forestry, and construction materials.

"The second option is “harder" and presupposes that the Member States undergo mandatory harmonisation of all planned subsidies and other measures of support for industry with the Eurasian Commission. It is clear that this is more difficult, it leads to compromise, but it is also the more progressive option. Authority and responsibility in this case are fully transferred to the EEC at the supranational level. Moreover, a common information system on the Member States’ industrial enterprises and production will be created within the EAEU. The goal is to consistently apply financial support, thus creating better conditions for joint production and building manufacturing chains.

Everything is already in place for that. The most important strategic document - the Main Directions of Industrial Cooperation - has already been adopted in the EAEU. The Eurasian Network of Industrial Cooperation and Subcontracting, the Eurasian Machine Tool Engineering Center, and the Eurasian Technology Transfer Network are starting to operate.