Preferential zone – unites all countries in whose mutual trade customs duties on imported goods have been reduced or eliminated.

What is a free trade zone?

What is the essence of such economic cooperation? Free trade zone countries create something like a single trade space, on the territory of which there are no customs tariffs, duties, or any other trade barriers. At the same time, the internal policies of the countries retain their independence - the only thing that unites them is a trade agreement. In addition, each country can establish its own rules for doing business with third countries - no one requires them to have a uniform policy.

Some components

Although the free trade agreement helps the participating countries strengthen relations among themselves, it also has some disadvantages. For example, the use of such agreements is not entirely suitable for states with a large area - nevertheless, additional profit could be obtained for the movement of foreign goods within the country. In addition, the removal of customs duties makes it possible to reduce the price of imported goods, and therefore make them a real competitor to domestic products.

The latter does not always withstand such opposition; sometimes it is almost completely forced out of the market. It will also be necessary to tighten controls at the borders of participating countries in order to avoid the import of goods from third countries, which could also become competitors with products produced within the association. A free trade zone means not only some economic advantages, but also vigilant control over the state of the world market and the activity of partners from third countries.

Preferential trade zone (preferential trade agreement)

An area with preferential trade treatment, within which countries reduce mutual tariffs on imports of goods, without changing them for other countries. All parties to the transaction independently determine the foundations and mechanisms of national foreign trade policy, an integral component of which is preferential treatment of partners under the agreement.

Finished works on a similar topic

Course work Levels of economic integration 420 ₽ Essay Levels of economic integration 270 ₽ Test work Levels of economic integration 240 ₽

Receive completed work or specialist advice on your educational project Find out the cost

Process of creation

And so the creation of a free trade zone begins. What measures need to be taken to ensure that it functions at full capacity, while respecting the interests of all participating countries?

We should start with the abolition of any mutual payments for the import and export of goods, for their transportation, and so on. Naturally, absolutely all participants in the integration association take part in the negotiations. The next stage is an agreement between states on how exactly indirect taxes will be collected. After this, the gradual elimination of any trade barriers and restrictions that still existed between the participants begins. During the integration process, special bodies are also created, on whose shoulders lies responsibility for the unification process, its regulating documents, the preparation of reports on the results of integration, and so on. One of the last stages of the unification is the establishment of measures to control re-exports to states that are not members of the free trade area.

All of the above measures will contribute to the creation of highly effective trade cooperation between states and, perhaps, under certain conditions, will contribute to further integration.

Levels of international economic integration

• transnational – characterized by the development of connections between national economies;
• transnational, which is characterized by ties between transnational corporations and banks;
• global – provides for the unification of countries within the global space.

Are you an expert in this subject area?
We invite you to become the author of the Directory Working Conditions In the European Union, there are two types of interstate economic integration:

1. “negative” (passive), which is understood as the process of eliminating discrimination in relations between business entities of the member countries of the integration association. In practice, this means the abolition of barriers to the movement of goods, services and factors of production.
2. “positive” integration, which provides for coordination of the structural policy for restructuring the economies of the countries of the economic union, its direction towards achieving common economic goals.

Note 1

Integration processes can be successful if these two types of integration are combined. The basis for integration at the international level is economic associations of countries (the phenomenon of economic regionalism).

Evolution

Preferential trade agreements, free trade area, customs union, common market, economic and political union - all these stages reflect the evolution of international economic cooperation. If at the first stage, preferential agreements, countries only give certain benefits to each other, then with each subsequent stage they begin to strengthen their ties.

In a free trade zone, member states get rid of internal barriers and customs controls in relation to each other. The transition to a customs union already obliges them to pursue similar, if not identical, foreign economic policies, that is, their attitude towards some third states will be absolutely the same. Economic union means the introduction of a common currency, as well as the transition to a common domestic economy. The last stage in the development of the integration association is a common constitution, a legal system, and the destruction of all possible borders. The most striking example of such an economic grouping is the European Union, which, having begun its history in 1958, over the course of more than half a century, was able to overcome many difficulties and reach an unprecedented stage of integration.

NAPHTHA

One of the first such integration associations in the world was NAFTA, also known as the North American Free Trade Area. Created in 1994, it united the United States of America, Canada and Mexico. Under NAFTA, there are no trade barriers to trade in automotive, textile, petrochemical, energy, agricultural, or telecommunications products. Patents, innovations and other results of intellectual activity are not subject to duties. The countries of the North American Free Trade Area also cooperate in the field of ecology - they all have the same nature due to the geographical location of the states. In addition, NAFTA also regulates labor migration between countries.

The problem with this unification is that the United States, as the center of this integration, especially stands out. Currently, thoughts are arising about revising the rules for the participation of this state in the association, but it is still difficult to say whether there will be a change in the order of America’s membership. The association does not plan to move to the next level, to a customs union, due to the difference in economic development of the member countries: while the United States and Canada are developed countries, Mexico is still developing. It is likely that only territorial proximity contributed to integration, since neither country particularly benefited from it.

Integration - what is it in simple words and how can you integrate something | Internet business

Hello, dear readers of the Goldbusinessnet.com blog. Today we have in turn the terms “integration” and “integrate”, which imply the activity of combining certain elements or the process of introducing individual components into a single whole.

These words are widespread and are used in a variety of fields (economics, politics, education, social sphere, modern technologies, etc.).

Below I will try to explain in more detail in simple words, using some examples, when the term we are considering is used and how it can be interpreted.

What does integration mean?

So, this concept comes from the Latin word “integratio” , which translated into Russian means “insertion”, “connection” (the opposite in meaning is “differentiation”, that is, dismemberment, division into fragments). I think this is already a step towards understanding its essence.

Integration is the combination of individual components using certain actions into a single whole or their integration into an already existing integral object.

Integrate - connect, unite, intertwine, solder, insert, implement.

Thus, based on the above, it is logical to conclude that the integration process can occur in two variations , which can be represented using simple examples:

1. Assembling puzzles, where the whole picture is made up of individual equivalent elements. Here, each of the parts is equally important for the solidity of the overall structure.
2. The proverbial “cherry on the cake”, which is integrated into the finished masterpiece. It does not greatly affect the appearance and taste of the composition, however, it gives it a certain charm and exclusivity.

Probably, we have the right to consider the integration of Belarus and Russia , which has not yet been fully completed, as a very clear example.

Its outcome could theoretically be any of the two options mentioned above: either the countries will form a political and economic union (they will merge to form a new entity in the form of the Union State) for the purpose of mutually beneficial cooperation, or Belarus will join the Russian Federation.

At the present stage, the first option of integration with the emergence of the Union State seems to be the most realistic.

But under different conditions and within the framework of a different era of human development, the second option could be more likely (as was the case during the formation of the Soviet Union, when the republics were gradually annexed).

Everything depends on the political and economic situation (in other words, the situation) prevailing at a particular moment.

Economic integration

Naturally, integration processes in each area have their own characteristics. The objects of international economic integration are countries united in a union that involves mutually beneficial cooperation in several areas or in one specific area. Here are examples of such communities in different parts of the world:

• The European Union (EU), which includes several European countries. A common economic system has been created here, and within some states there is a single currency;
• North American Free Trade Agreement (NAFTA), which includes the United States, Mexico and Canada. Free trade zones are created within the borders of these states;
• Asia-Pacific Economic Cooperation (APEC) is a forum established to increase economic growth and strengthen ties between countries in the region.

There are several forms of integration associations on an international scale (as integration increases):

1. Preferential zone - in trade between the states included in this association, customs duties on certain imported goods are canceled or reduced.
2. A free trade zone is the next stage of integration, enhanced compared to preferential relations. Here, within the participating countries, all customs duties and taxes are abolished, and all limits on trade between them are eliminated. At the same time, each state located in this zone is assigned the right to establish its own trade rules in relation to third countries.
3. Customs Union - not only are all restrictions on trade between the members of this association abolished, but also a single customs territory is created. At the same time, it is envisaged to create special bodies coordinating all communications.
4. The common market is a stage of integration that ensures the free movement of all goods and services, as well as production factors in the form of labor and capital resources.
5. An economic union is a complete unification of economic policy within the established community, which consists of the interpenetration of national production processes, optimization of tariffs and the emergence of a unified financial and social policy.
6. Economic and monetary union is the maximum degree of international integration, which, in addition to the above-mentioned points, also includes an interstate agreement on the interchangeability of currencies in internal payments.

If we move from the general to the specific, then within the framework of one state it is also possible to bring together different regions, entire industries and enterprises in the economic space. If we take into account enterprises as components of the economy, then there are some nuances here, one of which is that there are three types of their integration:

EAEU

The free trade zone of the EAEU (Eurasian Economic Union) no longer exists - it was replaced by a customs union, a new level of integration association. The EAEU Customs Union implies a unified foreign economic policy and the absence of internal barriers to trade; in addition, citizens of member countries of the association can apply for work in any other state of the union on the same conditions as citizens of this state.

Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia became members of the union; in addition, Syria, Tunisia and Turkey expressed their desire to join the union.

Application of prefatory amendments in public procurement

This material discusses issues related to the application of pre-admission amendments in the Republic of Belarus: the concept of pre-admission amendments, its size and confirmation procedure, the assessment by the public procurement commission of participants' proposals, taking into account the application of pre-admission amendments during open and closed tenders, the procedure for requesting price proposals, and an electronic auction.

1. The concept of pref amendment

The prefatory amendment is considered as providing an advantage to goods (works, services) offered by participants (paragraph 14 of article 1 of the Law on Public Procurement). Based on the definition of the pre-filing amendment, it is provided for the goods, work or service offered by the participant, provided that the relevant documents are submitted and a statement is made in the form of the ETP operator (or attached separately as part of the proposal, if competitive public procurement procedures are carried out, information about which is state secrets) . The essence of this advantage lies in the fact that the legislation establishes special rules for evaluating and comparing participants’ proposals based on the “price” criterion. The preliminary amendment is applied only when conducting open and closed tenders, electronic auctions, and procedures for requesting price proposals (part 1, subclause 1.5, clause 1 of Resolution No. 395).

The pre-amendment does not apply when carrying out the procurement procedure from a single source, even if any supporting documents are submitted and a corresponding statement is made by the potential supplier (contractor, performer). Also, the pref amendment does not apply when conducting exchange trading.

The pre-amendment does not apply in relation to (Part 5 Sub-Clause 1.5 Clause 1 of Resolution No. 395):

— parts of goods (works, services) that are the subject of government procurement, including its lot (part);

— goods (works, services) that are the subject of public procurement during tenders and procedures for requesting price proposals, in the case of submission of proposals only by participants entitled to apply prefatory amendments of the same size.

If, for example, in an open competition or in the procedure for requesting price proposals, one of the participants declared the right to apply a preffection amendment in the amount of 15%, and the second - in the amount of 25%, then the prefacility amendment is applied in the amount of 15% and 25%, respectively, subject to its confirmation properly.

2. The size of the pre-filing amendment and the procedure for its confirmation

The size of the pre-amendment is established in Part 1, sub-clause. 1.5 clause 1, and the list of supporting documents is sub-clause. 1.6 clause 1 of resolution No. 395:

The legislation requires that an application for the right to apply a pre-registration amendment be submitted in the form established by the regulations of the ETP operator (paragraph 6, part 1, paragraph 2, article 34, paragraph 3, part 2, paragraph 2, article 41, paragraph 6, p. 1 clause 2 article 47 of the Law on Public Procurement).

In relation to a certificate of own production issued by the BelCCI or its unitary enterprises, it is necessary to be guided by Regulation N 1520. Thus, a certificate of own production can be issued for several product names, which in this case are indicated in the appendix to such a certificate. In relation to works and services, a separate certificate is issued for each type (parts 1 and 2, paragraph 4 of Regulation No. 1520).

A certificate of own production extends its validity to the products (work, services) named in it, produced (performed, provided) during the period of validity of such a certificate by a legal entity, including its separate divisions specified in the certificate (Part 3, Clause 4 of Regulation No. 1520 ).

3. Actions of the public procurement commission when selecting the winning participant

Since the prefatory amendment is applied during competitive public procurement procedures (open and closed tenders, electronic auction, procedure for requesting price proposals), issues of its direct application are resolved by the public procurement commission (hereinafter referred to as the commission), whose functions include evaluating and comparing proposals, determining one or several (if the subject of public procurement is divided into parts (lots)) winning participants (paragraph 6, clause 13 of Regulation No. 7).

It is necessary to distinguish between the actions of the commission for the procedures:

1) open and closed competition and procedure for requesting price proposals;

2) electronic auction.

They will differ depending on the order of the procedure. Let's consider one by one what they are.

4. Application of prefatory amendments when conducting open and closed tenders, procedures for requesting price proposals

When conducting open and closed competitions, the procedure is carried out conditionally in two stages, each of which ends with the corresponding protocols:

1) opening, consideration of proposals and admission of participants to the evaluation and comparison of proposals (clause 5 of Article 35 of the Law on Public Procurement);

2) evaluation and comparison of proposals, selection of a winning participant or recognition of an open competition as invalid (clause 3 of Article 36 of the Law on Public Procurement).

Firstly, the application of the prefatory amendment is carried out at the second stage when comparing the prices stated in the participants’ proposals, when the customer (organizer) establishes in the tender documents such a criterion for evaluating and comparing proposals of the cost group as “offer price” (paragraph 3, sub-clause 1.1 p. 1 of Resolution No. 449).

Secondly, it is necessary to check which of the participants admitted to the evaluation and comparison of proposals has declared their right to apply the preliminary amendment (such a statement can be made by them when submitting a proposal through the ETP functionality, and the customer (organizer) can see the relevant information in “ .txt"/".xls" file generated by the ETP, and also take into account the size of the declared pre-fix).

Thirdly, it is necessary to analyze the documents submitted by the participants confirming the right to apply the pre-registration amendment. In particular, check:

1) their validity periods (for urgent documents - certificates of products of own production, certificates of origin of goods, form ST-1). We believe that such documents should be valid at the time of submission of the proposal;

2) check the validity of the documents:

— information about state registration, if a certificate of state registration of the subject is presented, can be checked through the portal of the Unified State Register of Legal Entities and Individual Entrepreneurs;

— if certificates of products (works, services) of own production and certificates of origin of goods of the ST-1 form issued by the BelCCI are presented, then through the service for checking certificates of origin of goods;

— if certificates of origin of goods issued by the Russian Chamber of Commerce and Industry are presented, then through the resource;

— if an extract is provided, then through the resource;

3) check whether the goods (work, service) offered by the participant in the proposal correspond to those specified in the certificate of products of own production, the certificate of origin of goods of form ST-1, an extract;

4) check the documents confirming the right to apply the pre-registration amendment in the amount of 25% (paragraph 10, subclause 1.6, clause 1 of Resolution No. 395):

- such a document must be signed by the head of an organization of the Republic of Belarus, in which the number of disabled people is at least 50% of the payroll number of employees, or by a person authorized by him;

- it must be dated no earlier than 5 working days before the date of submission of the proposal to participate in the public procurement procedure. The option to indicate in this document the phrase “valid on the date of submission of the proposal” cannot be accepted as appropriate, since the requirement for a specific date of issue is not met;

— it must indicate the total number of employees, the number of disabled people, numbers of certificates confirming disability, and their validity periods.

Fourthly, if the right to apply a preflight amendment has been declared, but documents confirming its application are not presented or do not meet the requirements for them, the commission does not reject such a proposal, but evaluates the participant’s proposal without applying the preflight amendment. This position was formed in letter MARCH N 14-01-10/1505.

The commission should also take into account which of the participants declared the right to apply the prefatory amendment. In particular, if proposals are submitted only by participants who have the right to apply a pref amendment of the same size, such a pref amendment is not applied (paragraph 3, part 5, subclause 1.5, clause 1 of Resolution No. 395).

If the prefatory amendment is documented, then the mechanism for its application is as follows: the price of the participant’s proposal is reduced by 15 or 25%, the proposal of such participant is compared with others at a price reduced by 15 or 25%, it is assigned a certain number of points (depending on the scoring conditions specified in the competition documents) (part 2, sub-clause 1.5, clause 1 of Resolution No. 395). Accordingly, the places of participants and their offers are ranked based on the price calculated in this way.

If the first place is awarded to the “preferential” participant, then the contract with him will be concluded at the price of his offer.

We recommend that the commission indicate the relevant information about the application of the prefatory amendment in the protocol for evaluating and comparing proposals, selecting a winning participant or declaring an open competition invalid (although this information is not available in the sample forms of protocols contained in the MART Resolution No. 56, nevertheless, for the transparency of the evaluation process and comparison, this information can be reflected).

The procedure for applying prefatory amendments for a closed competition .

As for the procedure for requesting price proposals , the algorithm for applying preflight amendments is the same as in the competition, but with the difference that in the procedure for requesting price proposals there is one stage of consideration and evaluation of participants’ proposals, which ends with a protocol for evaluating and comparing proposals and selecting a winning participant or recognition of the procedure for requesting price proposals as failed (clause 6 of Article 48 of the Law on Public Procurement). There is only one criterion for evaluating and comparing proposals - price; accordingly, when evaluating and comparing, the application of the pref amendment is carried out in exactly the same way as in the competition, with the exception that assigning points is not required. And also the agreement with the “preferential” participant is concluded at the price of its offer.

5. Application of prefatory amendments when conducting an electronic auction

When considering the first sections of the commission’s proposals, it is necessary to check the presence or absence of a statement of the right to apply the prefatory amendment from the participants, which can be made through the ETP functionality. In the first sections of the participants’ proposals, documents confirming the right to apply the pre-registration amendment are not presented; they must be submitted by the participant, if he declares to apply the pre-registration amendment, in the second section of the proposal (paragraph 4, part 4, clause 2, article 41 of the Public Procurement Law) .

The statement made by the participant regarding the right to apply the prefatory amendment is taken into account by the commission when drawing up the minutes of opening, consideration of proposals and admission to bidding (clause 5 of Article 42 of the Law on Public Procurement) as follows: if at least one participant or all of them declared their such right, the protocol indicates the initial price of the electronic auction, obtained through the following calculation: the estimated cost of the subject of public procurement, divided by 1.15 (1.25) (paragraph 2, part 3, subclause 1.5, clause 5 of Resolution No. 395). If any of the participants declared the right to apply a pre-facility amendment in the amount of 25%, then, regardless of the statements of other participants, the commission uses 1.25 when dividing.

For reference, the estimated cost of the subject of public procurement is indicated in the auction documents and is determined on the basis of MARCH Resolution No. 35.

Also, the protocol of opening, consideration of proposals and admission to bidding must reflect the registration numbers of proposals of participants who have declared the right to apply the pre-registration amendment (paragraph 4, part 1, clause 5, article 42 of the Law on Public Procurement).

After the completion of the electronic auction, the ETP operator will generate a bidding protocol with information about the participants who made the last and penultimate bids. The size of the bet for the “preferential” participant is indicated taking into account the size of the pre-fee amendment declared by him.

When considering the second sections of the proposals of the participants who made the last and penultimate bids, the commission analyzes the documents confirming the right to apply the pref amendment in the same way as in the competition.

However, if such documents by the participants who have declared the right to apply the pre-registration amendment are not submitted or are defective in content (format) then the actions of the commission, in the opinion of MART, are built according to the following algorithm (part 7 of section 4 of letter MART N 14-01-10/ 1505):

— if in the first section of the proposal the participant made a statement about the application of the prefatory amendment, but in the second section of the proposal there are no documents properly confirming the right to apply the preffection amendment, then in this case it should be said that the participant declared the right to apply it in bad faith. And since the prefatory amendment was applied (when determining the initial price) and influenced the course of the bidding, accordingly, the actions of such a participant should be qualified as providing false information (paragraph 4, paragraph 4, article 44 of the Public Procurement Law);

- if, for example, documents confirming the right to apply a preflight amendment are submitted, but they do not meet the requirements established for them, then the reason for rejecting the participant’s proposal is that the proposal does not meet the requirements of the auction documents for the second sections of proposals (paragraph 2 p 4 Article 44 of the Law on Public Procurement).

The rejection of the proposal in the two cases described above, in contrast to the actions of the commission during the competition and the procedure for requesting price proposals, is due to the fact that the statement made by the participant in the first section of the proposal about the right to apply the prefatory amendment had an impact on the course of the auction.

The protocol for selecting the winning participant or declaring the electronic auction invalid must contain, respectively, a decision on the selection of the winning participant with information about the contract price, including taking into account its reduction, if such a reduction took place, taking into account the application of the prefatory amendment, or a decision on declaring the electronic auction invalid with appropriate justification for this decision (paragraph 4, part 1, clause 6, article 44 of the Law on Public Procurement).

The agreement with the “preferential” participant is concluded at the price of the last bid of this participant, including taking into account adjustments in accordance with Part 4, Clause 5, Art. 43 of the Law on Public Procurement, increased by 15 or 25%, respectively (increased by 15 or 25% is reflected by the ETP operator in the tender protocol).

Read this material in ilex >>* *follow the link you will be taken to the paid content of the ilex service

Goals of creating the EAEU

Among the main goals of the integration association is the abolition of any customs duties within the union, which will reduce the price of manufactured goods and, therefore, increase their attractiveness to consumers. Member countries consider one of their main goals to protect domestic markets not only from competitors, but also from low-quality products - therefore, within the framework of the association, special standards have been established for all transported goods.

In addition, the customs union will contribute to the development of economic ties between member states, allowing any financial transactions to be carried out within the union much faster than with third countries.

Preferential systems

136. The preferential system can be understood in a narrow or broad sense. In a narrow sense, this is a system that in practice is limited to providing discounts or completely removing customs duties on imported goods and similar benefits.

Examples of such preferential systems are the Generalized System of Preferences for Developing Countries and the Global System of Preferences among Developing Countries.

Systems of this kind are based on international legal acts, including decisions of international conferences and organizations, without creating any organizational forms, and therefore there can be no talk of endowing such systems with any legal personality.

137. The general system of preferences was developed within the framework of UNCTAD in the second half of the 60s. XX century and was finally approved by the UN General Assembly, starting to operate in the 70s. The purpose of the system is to assist developing countries by facilitating the export of their goods to developed countries.

The system is unilateral: developed countries reduce or cancel their import duties for goods from developing countries, but on a particularly flexible basis - each developed country determines the scheme of customs benefits provided voluntarily and independently, possibly taking into account the wishes of developing countries.

The entire system is a typical example of the operation of a set of recommendatory norms, which combine, on the one hand, the optionality of choosing goods for the application of preferential duty rates or their abolition, the size of discounts, and on the other hand, a number of binding conditions:

preferences are provided to all developing countries, preferences are legally excluded from the most favored nation principle (preferences for developing countries provided by one of the developed countries do not apply, due to the said principle, to another developed country between which this principle applies).

Due to the system, the so-called least developed (developing) countries receive especially significant preferences; usually their goods are generally exempt from import duties in developed countries. The lists of countries enjoying the status of developing and least developed are determined by the UN depending, first of all, on average per capita income and other objective criteria.

The system, initially adopted for a 10-year period, was periodically extended. At the same time, the preferential schemes established by each developed country are not fixed and are modified from time to time both in connection with changes in the status of individual developing countries and in terms of the size of benefits.

Russia (formerly the USSR) provides developing countries with significant discounts from the general import tariff, and for goods from least developed countries up to complete exemption from duties. In this case, preferences may not apply to certain goods.

At the same time, in the early 90s. due to transitional difficulties, a number of developed countries (EU, USA, Canada) temporarily included Russia in their preferential schemes for certain goods it exports (fuels, metals, fertilizers, etc.).

138. The Global System of Preferences, like the Generalized System of Preferences, was developed by UNCTAD with the aim of promoting mutual trade in industrial products between developing countries. In 1988, 48 developing countries entered into an agreement to reduce duties on one and a half thousand commodity items, as well as to soften some non-tariff barriers.

But unlike the Generalized System of Preferences, which is unilaterally preferential to developing countries, the Global System of Preferences operates on the basis of reciprocity between participating states.

§ 139. Initially, on the basis of the General Agreement on Tariffs and Trade - GATT, the same, in principle, mutual preferential system was created in terms of the reduction and abolition of import duties.

But the GATT, in addition, provided for a number of other measures aimed at developing free trade: the abolition of quantitative restrictions on imports, restrictions on the use of export subsidies, non-customs barriers, etc., which turned the GATT/WTO system into a deeply echeloned specific preferential system special kind

Difficulties of unification

However, it is worth noting that integration, even at a fairly high level of the customs union, has not occurred to its full extent. From time to time, disputes arise between member countries (in particular Belarus and Russia) due to the fact that one of the parties considers the other's products to not meet the necessary standards. In addition, the difference in the level of economic development of Russia and other countries forces the latter to submit to the interests of a larger state, that is, there is no equality in the EAEU.

It is difficult to say that the member countries gained something from the conclusion of this agreement (the only thing that should be noted is the expansion of markets, since in some countries, due to their small size, there were not many opportunities to sell their products), but, with On the other hand, it is quite likely that if it were not for the customs union and the free trade zone existing within its framework, the consequences of the global financial crises would have been much more serious for the participants of the Eurasian Economic Union, and they were mitigated by interference in the internal economy of the Russian countries.

The most relevant areas of interaction in the field of international trade are globalization and regionalization. The creation of the World Trade Organization (WTO) provided additional impetus for the unification of international rules. However, the WTO does not prevent countries from concluding regional trade agreements (RTAs), and the increasing complexity of negotiations within its framework makes the conclusion of RTAs increasingly in demand.

The number of concluded preferential trade agreements (PTAs) is growing by an average of 8 per year. In July 2021, their total number exceeded 600, more than 400 of them are in force, which is 8 times more than in 1990. [3] According to WTO data, in 1990, countries participated in an average of 2 such agreements, in 2016 - already in 13. A feature of modern PTS is the transition from bilateral agreements to multilateral ones.

According to the traditional approach of J. Wiener [16], PTAs are considered as a tool for reducing tariffs and, as a consequence, reducing costs of entering the domestic market of a partner country. But, as Figure 1 shows, their relevance did not decrease, but, on the contrary, increased after the adoption by developed and developing WTO countries of an agreement to reduce the average level of tariffs within the framework of the most favored nation regime (hereinafter referred to as MFN).

Picture 1

Preferential and multilateral liberalization

Source: [20].

The average level of tariffs of WTO member countries in 2014 was 9.08% [21]. At the same time, the average level of tariffs in high-income countries from 1995 to 2014. decreased from 8.2% to 6.1%, low- and middle-income countries - from 15.7% to 9.5%. The number of PTS prisoners during the period under review increased almost 4 times. However, about 66% of tariff lines, the duties on which under MFN are above 15%, are not reduced under the PTS [20]. Thus, the most “sensitive” sectors of the economies of WTO member countries remain protected within the framework of the PTA.

Thus, if initial tariff rates are low enough to leave sensitive industries outside the scope of the agreement, the impact of the PTA on trade and the country's welfare becomes negligible. A natural question arises: what caused the increase in the number of PTAs in the context of a decrease in the overall average level of tariff protection, what in this case are the main effects of concluding a PTS?

Characteristics of modern PTS.

The peculiarity of the PTS is the limited number of participants who receive preferences for access to each other’s market. The discriminatory nature of such agreements distinguishes them from open membership agreements such as the WTO. Reasons for restricting the accession of new members may be regional (European Union, North American Free Trade Area, Eurasian Economic Union) or the level of income in member countries (for example, concessions within the Generalized system of preferences of EU countries apply only to developing countries) countries). The number of transcontinental trade agreements has been increasing over the past decade.

The purpose of the PTA – liberalization of mutual access to the internal markets of member states – distinguishes these agreements from agreements that affect trade but do not facilitate it (for example, the Montreal Protocol on the Ban of Substances that Deplete the Ozone Layer, or bilateral agreements to facilitate investment access or rights to intellectual property). PTAs may include agreements, the provisions of which apply not only to trade policy, but their goal must necessarily be to improve access to markets of at least one member state [13].

The discriminatory nature of PTAs is emphasized by their exclusion from the rules and regulations of the WTO, since under Article I “General Most Favored Nation Treatment” of the GATT, WTO members provide each other with uniform rates of customs duties and other charges. The exception is the preferential agreements indicated in Article XXIV “Territorial application. Cross-border trade. Customs Union and Free Trade Areas" GATT, which allow countries or customs territories to mutually establish tariffs below MFN rates [3].

PTAs include a large number of agreements, the peculiarity of which is that they extend beyond the norms and rules established at the international level. The conclusion of the PTA does not depend on whether all member countries are participants in the WTO, which is important since WTO membership has become widespread only in recent decades (back in 2010, 10% of the trade of countries participating in free trade agreements was with countries – not members of the WTO) [19].

The generally accepted [5, 6,8,17] classification of PTAs was proposed by Frankel et al. [9]. In general, all trade agreements can be divided into 6 groups:

1) Non-reciprocal PTS. The agreement creates unilateral tariff preferences: for example, the Generalized System of Preferences of the EU countries.

2) Mutual PTS. The agreement provides bilateral tariff preferences for some trade, such as the Latin American Free Trade Area in 1960.

3) Free Trade Zone (FTA). The agreement is based on bilateral liberalization of customs duties on most trade, such as NAFTA.

4) The Customs Union (CU) is an FTA with established uniform external tariffs on products, for example, MERCOSUR.

5) The Common Market (CM) is characterized by the functioning of a Customs Union with the free movement of goods, services, capital and labor between member states, for example the European Union.

6) Economic Union (EU) - an existing EO with in-depth integration of the economies of member countries, the creation of a common monetary and fiscal policy, for example, the economic and monetary union of Central Africa (1999) and the euro zone.

This classification characterizes increasing economic integration as it moves from non-reciprocal or mutual agreements on some issues to FTAs ​​and ORs. The share of mutual trade between PTA member countries increased from 22% in 1965 to 60% in 2010 [15].

Figure 2

Share of trade between PTA member countries of various levels in world trade

Source: [9]

The share of trade under non-reciprocal PTAs increased sharply in the 1970s, partly as a result of the implementation of special and differential treatment for least developed countries by the WTO [14]. Then it decreased from the 1990s. accounts for 10% of international trade. The share of trade flows within the FTA increased from 3.5% in 1965 to 22.5% in 2010. At the same time, the share of trade between parties to agreements at a higher level of integration is maximum (growth from 14% to 24% over the period under review), which is partly due to the large volumes of trade between EU countries. In general, since the mid-1980s, the participation of countries in PTAs of a “deeper” level has been growing sharply, which is partly due to their quantitative spread and increase in the number of members (for example, the EU expanded from 15 countries in 1995 to include 27 by 2010) . In general, the number of countries that participate in the PCP at any level has increased significantly: in 1985, every eighth country was a member of the PCP, in 2010 – every third [20].

This indicates an increase in the conclusion of trade relations, the purpose of which is to remove not only tariff restrictions, which are already being reduced thanks to the WTO, but also other barriers to access to the market of partner countries.

Detailed data on PTAs were originally collected by Horn et al. [12] to analyze 28 agreements signed before 2008 by the US or EU with WTO members under Articles XXIV of GATT or V of GATS. Subsequently, the list was supplemented by the WTO Secretariat with agreements of its members until 2011 [3]. Based on these data, Limao [13] characterized the depth of integration and breadth of agreements. Currently, the list of the WTO Secretariat includes 100 agreements. Some of their provisions are already enshrined within the WTO, but PTAs also include provisions that go beyond its framework (WTO+).

The most obvious parameter of trade agreements is the level of customs tariffs. The second important factor in concluding a PTA is the liberalization of non-tariff measures, especially the abandonment of protective measures (anti-dumping and countervailing) and simplification of customs procedures and technical barriers to trade. In addition, special attention in modern PTS is paid to measures related to the regulation of competition in domestic markets, for example, state support, government procurement, and competition policy.

Provisions on reducing duties on industrial goods contain 100% of agreements, and on agricultural products – 99%. As tariff protection declines, non-tariff barriers (NTBs) become increasingly visible. The most common NTBs are customs procedures and other formalities when crossing the border - more than 92% of PTS contain provisions on their simplification, but in practice only 85% of PTS simplify them. Provisions for regulating the application of anti-dumping measures between parties to agreements are included in 83% of PTAs (in practice, they are applied by 72%), and within 48% of PTAs, the parties have undertaken obligations to regulate subsidies. An important mechanism for limiting entry into the market is standardization and certification of products. The standards are aimed at ensuring safety, protecting the life and health of citizens, but the application of many of them is explicitly or implicitly aimed at discriminating against foreign products [15]. At the same time, it is difficult to determine from the content of a particular standard whether they limit the distribution of domestic and foreign products in different ways. In this regard, only 45% of PTS contain provisions related to product standardization.

A huge achievement of modern agreements is the reduction of NTBs related to internal competition policy. If previously countries within the framework of the PTA regulated mainly measures related to foreign trade, now states are making concessions in matters of their domestic policy. The main reason is that, despite the provisions of Article III “National Treatment” of GATT 1947 on non-discrimination of goods within states, after a foreign product undergoes customs procedures, restrictions are still indirectly applied to it. Enshrining non-discriminatory government competition policies within the framework of the PTA reduces projected producer costs and increases trade transparency. Therefore, provisions on non-discrimination of imported goods are included in 65% of PTAs.

Providing information on government assistance and regulation of government procurement also helps importers adjust their expectations when entering the market of a partner country; such provisions were recorded in 57% and 41% of PTS, respectively.

Trade cooperation agreements rarely include only one of the above issues. 100% of TCPs deal with tariff policy, 98% of TCPs contain provisions on the liberalization of tariff and non-tariff barriers, 89% of TCPs cover tariffs, non-tariff barriers and post-border government policies, almost 60% of TCPs address regional policy issues, and only 56% of TCPs include all of these questions. The deeper the integration within trade agreements, the more costs and uncertainty for importers are reduced, increasing their efficiency.

Although PTAs historically aim to facilitate trade in goods, about 54% of agreements include provisions to liberalize entry into the services market.[13] 41% of the PCA regulates investment activities within the framework of WTO TRIMS, 59% - the transfer of intellectual property rights (WTO TRIPS), including those for technology and innovation. In 51% of PTS, issues related to the protection of intellectual property are fixed, innovation policy is regulated within the framework of only 6% of agreements, and 10% of PTS are aimed at the development of research and technology between members. The main tools for implementing such provisions are joint research projects, exchange of researchers, and the creation of state-owned enterprises with the attraction of foreign investment.

To stimulate investment, 76% of PTAs included at least one of the provisions: liberalizing capital movements and prohibiting new restrictions in this area (57% of PTS) or eliminating requirements for the mandatory presence of local investment in projects (45% of PTS).

Only 58% of agreements address human capital issues, namely the regulation of illegal migration (4% of TCP), simplification of visas and asylum (25% of TCP), social security (24% of TCP).

Trade agreements also cover some non-economic issues: the environment (46% of the PTA), healthcare (10% of the TCA), citizens' rights (14% of the TCA), drug control (13% of the TCA), terrorism (6% of the TCA). In fact, these provisions are implemented only in 35% of cases, but some countries pay special attention to their presence when forming new PTS. Thus, the United States takes mandatory participation in agreements that set out obligations to improve the environmental situation, while paying less attention to the inclusion of investment provisions in agreements [20].

The scope of the agreements is expanding, and the cooperation of their member countries is deepening. The provisions of the agreements include more and more issues - from investment and migration to environmental improvements and health care. At the same time, liberalization covers more and more commodity items under tariff and non-tariff measures. By cooperating at the bilateral level, states seek to benefit from the openness of markets for certain members, while discriminating against others.

The variety of mechanisms for interaction between enterprises and states expands the list of issues that can be included in the PTS in the future. Currently, trade agreements are aimed at regulating trade in final goods. However, recently there has been an increasing share of trade in intermediate goods within global value chains that dominate trading blocs. Thus, in the EU, more than 75% of parts and components exported come from the union countries. Given the trend towards fragmentation of global production chains in order to increase economies of scale, facilitating trade in intermediate goods is a potentially important motive for entering into new PTAs or deepening existing ones, for example, in terms of simplifying investment and creating joint ventures on preferential terms. [2]

Also, the provisions of trade agreements may include issues of liberalizing government policy in the field of investment and creating incentives for long-term trade, in particular, establishing rules for transfer pricing, profit taxation, and creating a system for resolving disputes in the field of investment.

The main features of concluding preferential trade agreements between countries at the present stage:

1. Increasing the share of trade between participants in bilateral PTAs with a high level of integration in the total volume of world trade. The increase in the number of bilateral PTAs has led to an increase in trade between their members from 22% of world trade in 1965 to 60% in 2010. Since the mid-1980s. There is a noticeable tendency to conclude more “deep” agreements, such as FTA and CU and ES.
2. Increasing interdependence between PTS agreements. The share of WTO member countries that are members of the PCA increased from 2% in 1965 to over 25% in 2010, and the corresponding share of trade between PCP and WTO member countries increased from 30% to 60%. Many countries participate in several PTAs at the same time, which changes not only the countries' trade, but also the economy. Increasing the number of interaction mechanisms and their transformation within the framework of PTS. The provisions of modern PTAs go far beyond the mutual reduction of tariffs on goods. Integration between countries within the framework of the PTA is deepening, while the range of issues on which they are ready to cooperate is expanding; agreements have begun to include not only economic, but also political, social and other non-economic issues.
3. Legal enshrinement in PTS agreements of a more liberal regime than that applied in practice. States are striving to create more open trading conditions. However, a transition period is necessary to create a legal framework for the implementation of some provisions of the agreements, and national businesses often need a time lag to prepare for the removal of protective barriers. In this regard, approximately a quarter of the provisions of the PTS are enshrined only legally, but are not applied in practice.

These trends necessitate adjustments to theoretical approaches to studying the effects of concluding PTS. The classical theory of calculating the effect of concluding a PTA, for example, an FTA or CU, is based on the theory of J. Wiener [16] that trade deviations are caused by differences in tariffs. However, the emphasis of modern PTAs on the liberalization of non-tariff barriers forces us to reconsider approaches to calculating the effects of trade creation and diversion, based on an analysis of the effect of tariff reductions. [15, 20]

Russian participation in the PTS

Most countries participate in one or more regional integration agreements. Russia is new to this issue. According to the WTO, Russia has notified participation in 8 preferential trade agreements. Russia is a member of the Eurasian Economic Union (EAEU), the Union of Independent States (CIS) FTA, bilateral FTA agreements with Georgia, Azerbaijan, Serbia, Turkmenistan and Uzbekistan, and also, as a member of the EAEU, with Vietnam. Interestingly, some of the bilateral preferential trade agreements, such as those with Azerbaijan, Turkmenistan and Uzbekistan, are duplicated by the multilateral CIS FTA. This is primarily due to the fact that these countries did not ratify the CIS FTA Agreement, but the validity of this agreement with these countries was necessary for the Russian side [3].

Since the entry into force of the Treaty on the EAEU (January 1, 2015), the EAEU member states have a common customs territory, and therefore a common customs tariff at its border. The first and so far only Free Trade Agreement between the EAEU and a third country was concluded on May 29, 2015 and entered into force on October 5, 2016. This Agreement with Vietnam includes a standard set of tools for trade liberalization: reduction of tariffs on goods, simplification of customs procedures , liberalization of technical barriers, as well as sanitary and phytosanitary standards, unification of the application of trade protection measures, facilitating the movement of services, investments and individuals. In addition, the Agreement defines the obligations of the Parties regarding agricultural subsidies and establishes a mechanism for trigger protective measures [10].

However, part of this agreement goes beyond the “standard” framework. In conjunction with the Agreement, a bilateral protocol on cooperation in the field of motor vehicles was concluded, which involves the creation of joint ventures in Vietnam [4].

Negotiations are currently underway on concluding FTA agreements between the EAEU and several non-CIS countries; Each of these agreements has its own specifics [4]. Thus, when concluding an FTA agreement with China, consideration of the issue of reducing tariffs was postponed to the medium term. The main provisions of this agreement will concern the liberalization of non-tariff regulation measures, especially technical barriers to trade and sanitary and phytosanitary measures, and simplification of customs procedures.

On the issue of concluding an FTA with Iran, given that Iran is not a member of the WTO, it was decided to conclude a temporary agreement on limited commodity coverage. The main goals of the FTA with Iran are the liberalization of tariffs and some non-tariff measures.

Agreements with Israel, Egypt, India, and Singapore are at the initial stage of development, however, taking into account bilateral cooperation, it is clear that, for example, with zero duties on goods from Singapore, when concluding a corresponding agreement, issues of liberalization of non-tariff protection, cooperation in spheres of services and investments. Regarding the FTA with India, there are serious concerns about the infringement of the interests of Russian producers of industrial and agricultural products, and the basis of the agreement will most likely also be the simplification of non-tariff and other economic measures.

Thus, Russia is using a variety of instruments to expand cooperation. The political component of the choice of partners under agreements plays a role, however, enterprises of the main sectors of the Russian economy, including metallurgical, chemical, and agricultural machinery, receive significant preferences for access to the market of partner countries. When concluding the PTA, Russia is now using to a greater extent the basic mechanisms for liberalizing tariff and non-tariff protection, as well as the possibility of expanding investment cooperation. The issue of expanding cooperation in the non-economic sphere, including competition policy, state support, and the social sphere, is currently not so relevant for Russia; in this regard, these areas are not included in the provisions of the agreements.

Literature:

1. Alikhanov A.A., Skryabina V.Yu., Tarasyuk E.V. Liberalization of trade relations between countries: assessment and consequences // International trade and trade policy. 2015. No. 3. P. 3-26.
2. Kukushkina Yu.M. The relationship between regional integration and GVCs // International trade and trade policy. 2021. No. 4 (8). P.66-82.
3. Official website of the World Trade Organization. – https://wto.org (access date: 04/20/2017).
4. Official website of the Eurasian Economic Commission. – https:// eurasiancommission.org (date of access: 03/30/2017)
5. Remchukova V.K. On the characteristics of modern forms of preferential cooperation between states // Russian Economic Journal. 2015. No. 5. P. 101 – 106.
6. Timofeev A.V. Theoretical aspects and trends of modern regional economic integration // Bulletin of SGSEU. 2012. No. 3. P. 58 – 63.
7. Baier S., Bergstrand J, Feng M. Economic integration agreements and the margins of international trade // Journal of International Economics. 2014. Vol. 93, pp. 339-350.
8. Baier S., Bergstrand J. Economic determinants of free trade agreements // Journal of International Economics.2004. Vol. 64, pp. 29-63.
9. Frankel J., Stein E., Wei S.-J. Regional Trading Blocks in the World Economic System // Peterson Institute for International Economics. 1997. Vol. pp.

10. Free Trade Agreement between the Eurasian Economic Union and its member states, of the one part, and the Socialist Republic of Viet Nam, of the other part. – https:// eurasiancommission.org (date of access: 03/30/2017).

11. Grossman G. The purpose of trade agreements. Handbook of Commercial Policy/Ed. by Bagwell, K., Staiger, R.:. Elsevier, Amsterdam, North-Holland, 2021.

12. Horn, H., Mavroidis, P., Sapir, A. Beyond the WTO? An anatomy of EU and US preferential trade agreements // World Economy. Vol. 33(11), pp. 1565–1588.

13. Limao N. Preferential trade agreements // Handbook of Commercial Policy / Ed. by Bagwell, K., Staiger, R.:. Elsevier, Amsterdam, North-Holland 2021.

14. Ornelas E. Special and differential treatment for developing countries // Handbook of Commercial Policy / Ed. by Bagwell, K., Staiger, R.:. Elsevier, Amsterdam, North-Holland, 2016.

15. UNCTAD Report. Non-tariff measures to trade: economic and policy issues for developing countries. – https://unctad.org (date of access: 04/03/2017).

16. Viner J. The Customs Union Issue // New York, Carnegie Endowment for International Peace. 1950. 117 rub.

17. Witkowska J. Integration process in the global economy: current state and prospects. The cases of the European Union, ASEAN Economic Community, and NAFTA // Comparative Economic Research. 2021. Vol. 19, pp.

18. World Bank Report 2000. Regional Integration Agreements. – https://siteresources.worldbank.org (access date: 04/10/2017).

19. World Bank Report 2005. Global Economic Prospects 2005: Trade, Regionalism, and Development. – https://siteresources.worldbank.org (access date: 04/10/2017).

20. World Trade Organization report 2011: The WTO and preferential trade agreements: from co-existence to coherence. – https://wto.org (date of access: 04/10/2017).

21. World Trade Organization report 2021: World tariff profiles. Applied MNF tariffs. – https://wto.org (access date: 04/10/2017)