Assessing the Impact of Non-Tariff Barriers in the EEU: Results of Enterprise Surveys

16 March 2015

A large-scale poll of 530 enterprises in Belarus, Kazakhstan and Russia suggests that non-tariff barriers account 15% to 30% of the value of exports. Belarusian exporters estimate non-tariff barriers in their trade with Russia and Kazakhstan at 15% of the value of their exports, Kazakh exporters at 16% for exports to Russia and 29% for exports to Belarus, and Russian exporters at about 25% for exports to each of the two other countries.

In addition to these barriers, Belarusian companies incur significant costs because of measures taken by Kazakhstan and Russia to restrict access to public procurement, and because of sanitary and phytosanitary regulations. Kazakh and (especially) Russian exporters point out to significant costs they have to incur because of financial measures imposed by Belarus. This barrier is also often a problem for exporters to Kazakhstan.

Poll respondents estimated the barriers to mutual trade in financial services as a percentage of financial institutions’ costs. Respondents from Belarus estimated the barriers associated with accessing the markets and operations in Russia and Kazakhstan at a level of 10% of their costs. Kazakh companies believe that both groups of barriers account for 10% of their costs in Belarus and 15% in Russia. Russian companies in the financial sector estimate barriers at 13% and 15% in Belarus and at 15% and 10% in Kazakhstan.

The main barriers for Belarusian transport companies in the market in freight transportation by road in Russia and Kazakhstan are the non-refundable VAT on fuel, the limited «green card» insurance (up to EUR 3,000) in Russia, operational restrictions (for example, the standard axle load in Russia), restrictions on the transportation of large-size cargo (in Kazakhstan), and too many inspections (for example, of the drivers’ rest time) and penalties. Belarusian transport companies believe that the removal of barriers and restrictions in the transport sector (in particular, the permit system) would make it possible to double freight traffic over three years and expand the fleet of cars by 30-40% a year. Respondents from Kazakhstan believe that barriers and restrictions in Russia increase the cost of transport services by an average of 10-20%.

Estimating the Economic Effects of Reducing Non-Tariff Barriers in the EEU

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