The establishment of the Common economic space of the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation and its implications for Russias global integration, including WTO accessionDeputy Ministerfor economic developmentof the Russian Federation ALEXEY LIKHACHEVWashington, D.C. - May 23, 2011

THE MINISTRY FOR ECONOMIC DEVELOPMENT OF THE RUSSIAN FEDERATION

*The main goalsof the Customs UnionFormation of the Common Customs Tariff and the systemof non-tariff regulationLaunching the common Customs codeTransfer of customs control to the external bordersFormation of the common trade regulations with the third countries

Creation of the framework of enrollment and allotment of customs duties, taxes and fees

*Launching the common customs tariff and non-tariff regulationLaunching the Customs code of the Customs UnionTransfer of customs control to the external borders of BelarusLaunching the framework of enrollment and allotment of import customs dutiesTransfer of customs control to the external borders of KazakhstanAbolishment of customs clearance procedure of the goods in the mutual trade within Belarus, Kazakhstan and RussiaCommon tariff territory(stages)Launching the Common economic space

*Common Customs TariffFor RussiaFor BelorussiaFor KazakhstanIncreased:individual meat itemsready-made canned meatindividual metal itemspassenger cars

Decreased:clothingcarpetsleather and textile footwearelectrical machinery and equipment pharmaceutical substances

Increased:mutton, horsemeat, goat meatready-made canned meatyeastindividual items and clothing accessories

Decreased:exotic fruit juice concentrates food for baby feedingmaterials for photographic purposes wool and fabricpharmaceutical substancesparts for shoeselectric equipmentIncreased:transport group (including cars) woodrefrigeration equipmentpharmaceuticalshousehold appliancesclothing and footwear

Decreased:certain types of agricultural productsskinsoptical, medical instruments and devices

1

82.1428571429

14.2857142857

3.5714285714

1

8350800205011200

51001100500011200

9200160040011200

74.67.118.3100.0

45.59.844.6100.0

82.114.33.6100.0

1

82.1428571429

14.2857142857

3.5714285714

2

0

0

0

3

0

0

0

2

45.5357142857

9.8214285714

44.6428571429

1

Not changedDecreasedIncreased

8350800205011200

51001100500011200

9300155035011200

74.67.118.3100.0

45.59.844.6100.0

83.013.83.1100.0

1

0

0

0

2

45.5357142857

9.8214285714

44.6428571429

3

0

0

0

1

74.5535714286

7.1428571429

18.3035714286

1

(FOB Rtdm)

2008653.0275.4

669.1333.8

728.4333.8

768.9340.1

866.9340.1

932.6398.1

946.9398.1

814.0495.9

708.1495.9

514.5372.2

373.0287.3

286.3192.1

2009312.5119.1

309.7100.9

329.9115.3

356.3110.0

415.6137.7

498.7152.8

471.9212.6

527.8222.0

490.2238.6

496.6240.7

1

00

00

00

00

00

00

00

00

00

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(FOB Rtdm)

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*Determination of strategy and the main directions of development of the Customs Union(solutions - consensus)Regulating authority of the Customs Union(solutions - 2/3 majority or consensus )Execution of decisions Supranational institutionsThe highest authority of the Customs Unionat the level of heads of state and heads of governmentCourtof the EEC*State executive authoritiesSecretariat of the Commission of the Customs Union Commission of theCustoms Uniondeputy heads of government Dispute resolution

Russia 57%

Kazakhstan 21,5%

Belarus 21,5%Distribution of votes Organizing the activities of the Commission *Eurasian Economic Community

*Implementation of "four freedoms (free movement of goods, services, capital and labour force)Harmonization and unification of the standards of economic regulation in the key areas (competition, subsidies, public procurement, technical regulation, natural monopolies, intellectual property, etc.)Formation of integrated markets Coordinated macroeconomic and currency policies Common economic space of Belarus, Kazakhstan and Russia

*20 million km2 (15% of the earth surface)

4% of world GDP (PPP)

9% of world proved reserves of oil

11% of world exports of raw materials

13% of world exports of energy resources

80% of foreign trade turnover of CIS* countries

70% of mutual trade volume of CIS countries

CES25% of world proved reservesof natural gas80% of GDP of CIS countries170 million population*Commonwealth of Independent States

*MacroeconomyCES agreementsFree movementof labour forceFree movementof goods and servicesNatural monopolies CompetitionIndustrial subsidies Agricultural subsidies Intellectual property Currency policyFinancial marketsElectric energyRailway transport Gas transportation Markets of oil, oil productsIllegal migrationStatus of migrant workersTechnical regulation Trade in services + investments Public procurementCommon market of CES

Energy, transport

Free movementof capital

Common economypolicy

*Key CES provisionscommon list of products in respect of whichcommon technical regulations of the Customs Union are adoptedsimplified procedure for residence and labour activitycoordinated policy against illegal migrationNovember 18, 2010August-September 2011August-September 2011grants in accordance with WTO rules August-September 2011state aid not exceeding 10% of agricultural production

TechnicalregulationMigrationpolicy

IndustrialsubsidiesAgriculture

*August-September 2011national treatment and MFNfavourable conditions for expansion of mutual trade in services and investment activities Key CES provisions2012-2013January 1, 2012January 1, 2013common principles and rulesprotection against unfair competitionprohibition on abuse of dominance national treatment in the field of conservation and protection of intellectual property rights common international legislation (obligatory international treaties: the Singapore Treaty in 2006, the Rome Convention 1961) budget deficit not exceeding 3% of GDPpublic debt not exceeding 50% of GDPinflation not more than 5 percent points above inflation in the CES country with the lowest price growth

Trade in services and investmentactivity

Competition

Intellectualproperty

Macroeconomicstabilityrates

*Key CES provisionsJanuary 1, 2013December 31, 2013July 1, 2014unified tariff for the transportation of goods by different types of communication: export, import and domesticharmonization of legislation in accordance withinternational standards in:the banking field;the foreign exchange market;the equity market;the field of insurance.equal access to procurement in electronic format

Railwaytransport

Currency andfinancial markets

Publicprocurement

*New ZealandCommonwealth of Independent States(Free trade area)European Free Trade AssociationCommon EconomicSpace

**