Kazakhstan joins EAEU Free Trade Agreement
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Similar to the North American Free Trade Agreement (NAFTA), Europe and Asia have a free trade agreement of its own as part of its Eurasian Economic Union (EAEU). Kazakhstan has become the latest member of this treaty, having ratified the agreement between the Eurasian Economic Union’s (EAEU) member states and Vietnam on Wednesday.
Similar to the North American Free Trade Agreement (NAFTA), Europe and Asia have a free trade agreement of its own as part of its Eurasian Economic Union (EAEU). Kazakhstan has become the latest member of this treaty, having ratified the agreement between the Eurasian Economic Union’s (EAEU) member states and Vietnam on Wednesday.
The agreement was reached last year on May 29, 2015, but it has taken until now for the Kazakhstani government to ratify the agreement. The treaty creates favorable trade conditions for all parties to the agreement, encouraging international trade and investment. The treaty allows for duty-free trade between the EAEU member countries, Vietnam, and now Kazakhstan.
According to Kazakhstan’s First Deputy Minister of National Economy Marat Kusainov, the treaty also provides “a transitional period for cancelling the import customs duties…set for some product types…Some sensitive products have been withdrawn from the free trade regime and duties will be imposed on them in accordance with the sides’ import tariffs.”
Specifically, the agreement allows the nations to use special protective measures, creates antidumping rules, and provides for countervailing measures in accordance with the WTO rules.
Kusainov noted that the treaty “also provides the use of a protective mechanism in the form of customs duty at the level of the EAEU Common Customs Tariff, which will protect sensitive for EAEU textile products and furniture if the limit of the annual volume of imports from Vietnam is exceeded.”
The Kazakh Economy Ministry had previously outlined its priorities in implementing the trade agreement. Chief among its interests were the exports of food products, including flour, grain, alcohol, dairy products, and beef. “We immediately get the zero duty in the Vietnamese market for our grain and flour.
The duties will be also reduced to zero for other goods over certain transitional periods. Therefore, we have good prospects. We believe that we will be able to expand our exports,” Kazakhstan’s Deputy National Economy Minister Timur Zhaksylykov said.
Although the free trade agreement will naturally lead to a loss of income for Kazakhstan due to the removal of tariffs, the government believes the overall impact will be positive. “The economy in general will benefit because the duties are reduced also for our exports,” Zhaksylykov said. According to his calculations, trade between Kazakhstan and Vietnam accounted for $205 million in 2015.
