Belarus launches interagency group to protect domestic market
<p> An interdepartmental workgroup to develop and take measures to protect the domestic market held its first meeting on 11 March. </p> <p> The group, which includes 15 representatives of national ministries and departments, deputy chairmen of regional executive committees, and Minsk City Administration, was established by order of the Prime Minister on March 4, 2021, and is expected to meet on a monthly basis. </p> <p> According to MART chief Vladimir Koltovitch, the priorities of the group are to protect the interests of domestic producers in the external circuit and adopt comprehensive measures of tariff and non-tariff regulation within the EEU framework (Eurasian Economic Union - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia), stimulating and administrative measures in the domestic market, import substitution, formation of national brands. </p> <p> In addition, the group will propose specific solutions to stimulate sales of domestic goods in procurement, the development of technical regulations, sanitary, phytosanitary measures and control measures aimed at preventing and suppressing the circulation of dangerous, counterfeit and fake products. </p> <p> As a result of the first meeting of the group, instructions were given to simplify the access of import substitution products to the consumer, and it is also planned to develop regulations on the formation of stabilization funds for the off-season period and to improve the procedure for public procurement and procurement at their own expense. No further details were reported. </p> <p> <span style="color: #004a80;">Commentary</span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> Irina Tochitskaya, Deputy Director at the IPM Research Centre and lead researcher at the CASE Foundation - Centre for Social and Economic Research (Poland), believes that the interagency workgroup to develop and adopt measures to protect the domestic market is likely to focus its work on two areas. The first would try to stimulate sales of domestic goods and the second would try to encourage import substitution. Both have been repeatedly announced by the authorities recently. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> “In Belarus they have been combatting imports for a long time. Maybe now this urge has become concentrated due to the fact that the situation in the economy has aggravated,” Tochitskaya told PrimePress in a commentary. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> The Belarusian authorities are going to protect the domestic market with the same tools that are used all over the world: technical regulations, sanitary, phytosanitary measures and so on. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> At the time of economic crisis, a lot of countries seek to enhance their influence through non-tariff regulation of foreign trade. As a rule, such measures are established proceeding from considerations of state and public security of the country, fulfillment of international obligations, protection of economic basis of sovereignty, protection of domestic consumer market, and also as a response to discriminating or other infringing actions of foreign states. As a consequence, such measures increase the price of imported goods, which prevents them from being sold on the domestic market. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> “If the Belarusian authorities are going to use non-tariff regulation measures to reduce the turnover of dangerous, counterfeit goods, etc., such a message sounds nice. However, we should see how it will be realized in practice and which goods will be involved,” said Tochitskaya. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> As an example she referred to the state regulation of Belarus’ pharmaceutical market. Belarusian authorities had set a goal to increase the share of home-made pharmaceutical products in the domestic market up to 50% and the mission was accomplished. “This example shows that in an economy where the element of state regulation is very strong, it is possible to solve such problems,” the expert said. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> But for a country to use non-tariff barriers to protect against imported products, it must justify its decision. “You cannot just impose a ban - you have to justify that some imported products are a health hazard. But it is not easy to prepare a reasoned justification. In such a situation Belarus may try to formalize its decision to impose the ban as an exemption,” said Tochitskaya. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> All barriers on the EEU markets fall into three categories - barriers, restrictions and exemptions. Barriers are those obstacles that arise because an EEU member state violates the norms of the Eurasian Union law. Restrictions are those obstacles that arise due to gaps in regulation at the EEU level (and in this case the norms of national legislation, which may be different in different countries, continue to work), or when there is a conflict between the norms in the EEU law itself. Exceptions include obstacles that arise due to statutory exemptions, where a state, when signing the EEU Treaty, has provided for the possibility of exemptions in relation to certain goods. At the end of December 2020, there were 59 obstacles to trade between EEU countries: 11 barriers, 35 restrictions and 13 exemptions. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> However, the expert warned that it would be difficult for Belarus in the EEU to formalize the planned bans as exemptions. Especially since all the countries in the EEU, except for Belarus, are WTO members. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> “Belarus is not a member of the WTO. Belarus has accepted the Russian tariff, which Russia agreed upon WTO accession. It is known that when joining the WTO Russia stipulated its tariff caps. But if the actual tariff applied, for example, not 7%, but 5%, Belarus may technically increase the tariff by this 2%. But I don’t think it will really raise the tariff," said Tochitskaya. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> She says that even though Belarus is not a member of the WTO, but has actually agreed upon the tariffs with this organization under the procedure of accession, so it will not change them. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> “Given that Belarus is planning to join the WTO, I do not think it is possible to change anything much. It is unlikely there is much room for manoeuvre,” said Tochitskaya. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> The expert suggests that the proposals of the interagency workgroup established in Belarus will most likely relate to the measures of technical regulation, sanitary and phytosanitary measures. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> “There is only one question: how will Belarus coordinate this with the EEU, given that this area is primarily the prerogative of the EEU? In addition, one should understand that the EEU comprises five countries with different economies. And the desire of one country to protect its goods from imports must coincide with the desire of other countries. It is possible that for other countries this desire is not important,” the expert said. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> We should also note that the statements of the Belarusian authorities about their intention to take fundamental measures to protect the domestic market from competitors contradict the integration policy within the EEU framework. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> The latest example: in early March, the Eurasian Economic Commission (EEC) notified Belarus of the need to fulfill its obligations on the functioning of the Union's internal market in retail trade. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> In particular, “the Board of the Eurasian Economic Commission (EEC) recognized the requirement to maintain a compulsory range of Belarusian-made goods on the shelves of Belarusian retail shops in Belarus as a barrier in the internal market of the Eurasian Economic Union (EEU).” Belarus has been notified about the need to comply with the EEU law. The government of Belarus has been requested to eliminate the violations within 30 calendar days from the date of enactment of the decision and to inform the EEC about the measures taken. </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> It is worth noting that in February 2021, Belarus’ Ministry of Antimonopoly Regulation and Trade (MART) approved recommendations to ensure compliance with the provisions of the doctrine of national food security. Among other things, it was recommended that traders, when selling food products, including socially important essentials, should ensure that in 2021 the share of domestically produced food in the retail turnover should not be lower than 80-85% (in 2020 the figure was 77.1%). </span> </p> <span style="color: #004a80;"> </span> <p> <span style="color: #004a80;"> Belarus’ MART responded to the EEC notification. According to MART, Belarus is not in breach of its obligations to its Eurasian integration partners in terms of the application of assortment lists of goods. In this regard, the ministry is currently initiating the reversal of the decision taken by the Eurasian Economic Commission under EEU law.</span> </p>
2021-03-23
Primepress
Belarus launches interagency group to protect domestic market
An interdepartmental workgroup to develop and take measures to protect the domestic market held its first meeting on 11 March.
The group, which includes 15 representatives of national ministries and departments, deputy chairmen of regional executive committees, and Minsk City Administration, was established by order of the Prime Minister on March 4, 2021, and is expected to meet on a monthly basis.
According to MART chief Vladimir Koltovitch, the priorities of the group are to protect the interests of domestic producers in the external circuit and adopt comprehensive measures of tariff and non-tariff regulation within the EEU framework (Eurasian Economic Union - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia), stimulating and administrative measures in the domestic market, import substitution, formation of national brands.
In addition, the group will propose specific solutions to stimulate sales of domestic goods in procurement, the development of technical regulations, sanitary, phytosanitary measures and control measures aimed at preventing and suppressing the circulation of dangerous, counterfeit and fake products.
As a result of the first meeting of the group, instructions were given to simplify the access of import substitution products to the consumer, and it is also planned to develop regulations on the formation of stabilization funds for the off-season period and to improve the procedure for public procurement and procurement at their own expense. No further details were reported.
Commentary
Irina Tochitskaya, Deputy Director at the IPM Research Centre and lead researcher at the CASE Foundation - Centre for Social and Economic Research (Poland), believes that the interagency workgroup to develop and adopt measures to protect the domestic market is likely to focus its work on two areas. The first would try to stimulate sales of domestic goods and the second would try to encourage import substitution. Both have been repeatedly announced by the authorities recently.
“In Belarus they have been combatting imports for a long time. Maybe now this urge has become concentrated due to the fact that the situation in the economy has aggravated,” Tochitskaya told PrimePress in a commentary.
The Belarusian authorities are going to protect the domestic market with the same tools that are used all over the world: technical regulations, sanitary, phytosanitary measures and so on.
At the time of economic crisis, a lot of countries seek to enhance their influence through non-tariff regulation of foreign trade. As a rule, such measures are established proceeding from considerations of state and public security of the country, fulfillment of international obligations, protection of economic basis of sovereignty, protection of domestic consumer market, and also as a response to discriminating or other infringing actions of foreign states. As a consequence, such measures increase the price of imported goods, which prevents them from being sold on the domestic market.
“If the Belarusian authorities are going to use non-tariff regulation measures to reduce the turnover of dangerous, counterfeit goods, etc., such a message sounds nice. However, we should see how it will be realized in practice and which goods will be involved,” said Tochitskaya.
As an example she referred to the state regulation of Belarus’ pharmaceutical market. Belarusian authorities had set a goal to increase the share of home-made pharmaceutical products in the domestic market up to 50% and the mission was accomplished. “This example shows that in an economy where the element of state regulation is very strong, it is possible to solve such problems,” the expert said.
But for a country to use non-tariff barriers to protect against imported products, it must justify its decision. “You cannot just impose a ban - you have to justify that some imported products are a health hazard. But it is not easy to prepare a reasoned justification. In such a situation Belarus may try to formalize its decision to impose the ban as an exemption,” said Tochitskaya.
All barriers on the EEU markets fall into three categories - barriers, restrictions and exemptions. Barriers are those obstacles that arise because an EEU member state violates the norms of the Eurasian Union law. Restrictions are those obstacles that arise due to gaps in regulation at the EEU level (and in this case the norms of national legislation, which may be different in different countries, continue to work), or when there is a conflict between the norms in the EEU law itself. Exceptions include obstacles that arise due to statutory exemptions, where a state, when signing the EEU Treaty, has provided for the possibility of exemptions in relation to certain goods. At the end of December 2020, there were 59 obstacles to trade between EEU countries: 11 barriers, 35 restrictions and 13 exemptions.
However, the expert warned that it would be difficult for Belarus in the EEU to formalize the planned bans as exemptions. Especially since all the countries in the EEU, except for Belarus, are WTO members.
“Belarus is not a member of the WTO. Belarus has accepted the Russian tariff, which Russia agreed upon WTO accession. It is known that when joining the WTO Russia stipulated its tariff caps. But if the actual tariff applied, for example, not 7%, but 5%, Belarus may technically increase the tariff by this 2%. But I don’t think it will really raise the tariff," said Tochitskaya.
She says that even though Belarus is not a member of the WTO, but has actually agreed upon the tariffs with this organization under the procedure of accession, so it will not change them.
“Given that Belarus is planning to join the WTO, I do not think it is possible to change anything much. It is unlikely there is much room for manoeuvre,” said Tochitskaya.
The expert suggests that the proposals of the interagency workgroup established in Belarus will most likely relate to the measures of technical regulation, sanitary and phytosanitary measures.
“There is only one question: how will Belarus coordinate this with the EEU, given that this area is primarily the prerogative of the EEU? In addition, one should understand that the EEU comprises five countries with different economies. And the desire of one country to protect its goods from imports must coincide with the desire of other countries. It is possible that for other countries this desire is not important,” the expert said.
We should also note that the statements of the Belarusian authorities about their intention to take fundamental measures to protect the domestic market from competitors contradict the integration policy within the EEU framework.
The latest example: in early March, the Eurasian Economic Commission (EEC) notified Belarus of the need to fulfill its obligations on the functioning of the Union's internal market in retail trade.
In particular, “the Board of the Eurasian Economic Commission (EEC) recognized the requirement to maintain a compulsory range of Belarusian-made goods on the shelves of Belarusian retail shops in Belarus as a barrier in the internal market of the Eurasian Economic Union (EEU).” Belarus has been notified about the need to comply with the EEU law. The government of Belarus has been requested to eliminate the violations within 30 calendar days from the date of enactment of the decision and to inform the EEC about the measures taken.
It is worth noting that in February 2021, Belarus’ Ministry of Antimonopoly Regulation and Trade (MART) approved recommendations to ensure compliance with the provisions of the doctrine of national food security. Among other things, it was recommended that traders, when selling food products, including socially important essentials, should ensure that in 2021 the share of domestically produced food in the retail turnover should not be lower than 80-85% (in 2020 the figure was 77.1%).
Belarus’ MART responded to the EEC notification. According to MART, Belarus is not in breach of its obligations to its Eurasian integration partners in terms of the application of assortment lists of goods. In this regard, the ministry is currently initiating the reversal of the decision taken by the Eurasian Economic Commission under EEU law.