WPS7748


Policy Research Working Paper                         7748




    Russian Federation, the World Trade
Organization, and the Eurasian Customs Union
              Tariff and Non-tariff Policy Challenges

                              Michael J. Ferrantino
                                  Ian Gillson
                               Gabriela Schmidt




Trade and Competitiveness Global Practice Group
July 2016
Policy Research Working Paper 7748


  Abstract
 This paper assesses issues relating to tariffs and nontariff                       measured against a 2008 baseline. The impact of NTMs
 measures (NTMs) in relation to Russia’s World Trade                                in Russia and the ECU, though difficult to quantify, is
 Organization (WTO) and Eurasian Customs Union                                      potentially more important for the market than tariff
 (ECU) commitments. The analysis finds that full imple-                             changes, because of the significant divergence between
 mentation of Russia’s WTO tariff schedule through 2020,                            the historical GOST standards and standards prevailing in
 would raise goods imports by about $3.5 billion (1.1 per-                          most of Russia’s trading partners. Formation of the ECU
 cent) compared to 2012, with estimates of welfare gains                            and its associated bodies in 2010 has tended to perpetu-
 to Russian consumers equal to approximately $370 mil-                              ate regional methods of standard setting, and by extension
 lion. Russian exports to members of the ECU, primarily                             NTM policies, that are closely aligned with older models.
 Kazakhstan, would increase by an estimated $194 million,




  This paper is a product of the Trade and Competitiveness Global Practice Group. It is part of a larger effort by the World
  Bank to provide open access to its research and make a contribution to development policy discussions around the world.
  Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted
  at mferrantino@worldbank.org.




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                                                       Produced by the Research Support Team
     Russian Federation, the World Trade
    Organization, and the Eurasian Customs
      Union: Tariff and Non-tariff Policy
                  Challenges
                                             
                 Michael J. Ferrantino, Ian Gillson, and Gabriela Schmidt


	

	

	

	




	

JEL	Classifications:		F13,	F13	
     1. Introduction1

For the Russian Federation, the environment post-World Trade Organization (WTO) accession has
created both challenges and opportunities. Under its Accession Protocol, Russia’s trade-weighted average
most-favored nation (MFN) tariff—including specific tariffs—is scheduled to drop substantially, from 7.8
percent in 2012 to 5.6 percent in 2020, and its nontariff measures (NTMs) will be subject to WTO
disciplines, such as the SPS (Sanitary and Phytosanitary) and TBT (Technical Barriers to Trade)
agreements. At the same time, since 2011, Russia has been active in the Eurasian Customs Union (ECU)
with Kazakhstan and Belarus, which has removed most duties on Russian exports to the ECU but also
extended the use of Russian NTMs, particularly technical regulations, to the other ECU countries.

Russia’s WTO commitments and the ECU provisions are uniquely linked. The WTO commitments in
effect become part of ECU regulation as the result of a 2011 agreement. The intertwined status of Russia
and the ECU bodies is now a regular issue for WTO members engaging with Russia; some have
expressed concerns about the transparency of the ECU and related bodies. In a post-WTO environment,
Russia must therefore balance the policy challenges of pressures on import-competing industries with
new opportunities to export to its neighbors and for Russian producers to enhance productivity by
importing.

The parallel accession of Russia to the WTO in 2012 and the establishment of the ECU have had an
impact on Russia’s NTM policies. Russia’s accession agreements before joining the WTO implied far-
reaching reform of NTMs; particularly, regulations that apply to both imported and domestically
produced goods. However, formation of the ECU and its associated bodies in 2010 has tended to
perpetuate regional methods of standard setting, and by extension NTM policies that are closely aligned
with older models. This process has created significant tensions related to Russia’s NTM policies. Almost
all goods imported into Russia are covered by some kind of NTM. In most of the 16 sections of the
Harmonized System of tariff nomenclature, NTMs apply to over 90 percent of tariff lines and over 80
percent of imports. Such high coverage is not unusual for large economies with fully elaborated
regulatory systems. However, Russia’s use of such formalities as pre-shipment inspections is high by
international standards, as is its use of price-control measures. SPS measures in Russia and the ECU
extend well beyond agriculture to cover chemicals, plastics, leather, wood products, and textiles.

This paper assesses the effect of Russia’s recent WTO and ECU commitments on import tariffs and
nontariff measures (NTMs) on Russia’s competitiveness and trade position.

Namely, we consider three issues jointly: (i) the impact of Russia’s tariff concessions under its WTO
accession on Russia’s imports, (ii) the impact of imposing the ECU’s common external tariff (CET) on
Russia’s exports to Kazakhstan and Belarus, and (iii) the impact of the Russian/ECU regime of non-tariff
measures on Russia’s competitiveness and trade position. These issues, particularly the first two, have not
been considered jointly before.

1
  This paper is part of the research project on Trade and FDI Competitiveness Across Russia’s Regions in the post-WTO Accession and Eurasian
Customs Union Environment, prepared under the guidance of Birgit Hansl, who provided valuable comments throughout. We would like to thank
the peer reviewers Ben Shepherd and Michele Ruta as well as Amir Fouad and Patrick Ibay for additional support.

                                              RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                           2
The rest of this paper proceeds as follows. Section 2 presents our results on a) the impact of Russia’s
WTO commitments on Russian imports from WTO members, ECU members, other Commonwealth of
Independent States (CIS) countries and beneficiaries of the ECU’s Generalized System of Preferences
(GSP) and b) the impact of the ECU CET on Russian exports to Belarus and Kazakhstan. Section 3
investigates the impact of the WTO membership and the establishment of the ECU on Russia’s non-tariff
measure (NTM) policies. Section 4 concludes.

     2. How Does Russia’s WTO Accession Protocol Affect the ECU?

Russia’s accession to the WTO will benefit Russian market participants, consumers, and producers alike.
Households will benefit from lower prices as import tariffs fall in line with Russia’s WTO bindings.
Firms importing intermediate goods and equipment also benefit from greater certainty that tariffs on their
consignments should not rise above bound rates. Accession will also provide trade opportunities for other
WTO members, especially countries that are not part of the Commonwealth of Independent States (CIS).2
While introduction of the higher ECU Common External Tariff (CET) originally increased Russian
exports to Kazakhstan and Belarus due to trade diversion, reduction in the CET, which is scheduled
pursuant to Russia’s WTO accession commitments, will cause these exports to moderate over time. The
full impact will depend on the extent to which Russia’s commitments affect products that Belarus and
Kazakhstan import from Russia and the extent to which those commitments affect what CIS countries
export to Russia.

The objective of this analysis was to assess the extent to which better market access for Russian exports
through the ECU might be offset by competitive pressures in both its domestic market and its exports to
ECU markets as the CET falls because of Russia’s WTO commitments. The likely impact of Russia’s
WTO commitments on trade was therefore investigated, specifically trade with WTO members, ECU
members, other CIS countries, and beneficiaries of the ECU’s Generalized System of Preferences (GSP).3

The likely change in Russian trade was evaluated through a series of simulations organized in two parts:

a) The first part assessed the expected change in Russian imports from (1) CIS countries, (2) GSP
    countries, and (3) WTO members through 2020 as a result of the WTO tariff bindings, and how that
    will affect the ECU’s CET.
b) The second part assessed the expected changes in Russian exports to ECU partners (Belarus and
   Kazakhstan) as a result of (4) implementing the original CET, and (5) the implied reductions in the
   CET because of Russia’s WTO commitments. It also took into account the phase-out of product
   exclusions to the CET that Kazakhstan negotiated for 2010–19.

2
  In 1994, the CIS countries (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan, Turkmenistan,
and Ukraine) agreed to create a free trade area (FTA, but the agreements were never signed. The 1994 agreement would have covered all the then
12 members (Georgia left the CIS in 2009) except Turkmenistan. However, in 2009, there was a new agreement to create the CIS FTA. In
October 2011 the new FTA was signed by Armenia, Belarus, Kazakhstan, Moldova, Russia, Tajikistan, and Ukraine. To date, it has been ratified
by Ukraine, Russia, Belarus, Moldova, and Armenia, which are the only countries where it is in force. Intra-CIS import value was $12 billion in
2009, or about 43% of the total import value. Russia and Belarus accounted for more than three-quarters of total CIS imports.
3
  Russia's GSP for developing and Least Developed Countries was implemented in 1992 as a part of an effort to expand their exports to Russia. It
grants nonreciprocal tariff preferences on specified products from 147 beneficiary countries and territories (listed in Annex A). The ECU
countries agreed to extend the GSP to the customs union in 2008. Imports from LDCs enjoy zero tariff rates.


                                                RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                            3
In modeling the impact of the ECU adopting a CET that mirrors Russia’s WTO commitments through
2020, it was assumed that those commitments would be fully implemented4; for example, if the current
CET for a product is higher than Russia's bound commitment for any given year, the applied CET would
fall to the lower bound rate. Conversely, if the current CET were below the bound rate, presumably there
would be no change in the tariff.

The results suggest that full acceptance of Russia’s WTO tariff bindings through 2020 would increase
goods imports by about $3.5 billion (1.1 percent of total imports), measured against a 2012 baseline.
Lower prices for these imports as a result of tariff cuts in affected sectors would benefit Russian
consumers by some $371.39 million. The largest increases in import values are estimated for electrical
and electronic equipment ($592 million, 1.7 percent increase); pharmaceutical products ($365 million, 2.7
percent); meats ($248 million, 3.4 percent); plastics and plastic products ($238 million, 2.1 percent);
machinery ($151 million, 0.3 percent); iron or steel products ($139 million, 1.8 percent); aircraft ($132
million, 3.8 percent); footwear ($116 million, 2.7 percent); and cosmetics ($112 million, 3.1 percent).

While these tariff cuts would benefit Russian consumers, the associated increase in imports would also
put competitive pressures on Russian producers. The latter would be very modestly offset by increases in
Russian exports to ECU members, primarily Kazakhstan. These increases would result from increases in
Kazakhstan’s import tariffs on imports from non-ECU sources once the CET is adopted, since there are
many cases in which Russia’s tariffs, the basis of the CET, are higher than Kazakhstan’s pre-ECU tariffs.
However, the effect would be temporary, because higher tariffs on non-ECU imports would eventually
fall as a result of changes in the ECU tariff through 2020 that is implied by the fall in Russia’s bound
WTO tariffs.

It is estimated that increases in Russian exports to Kazakhstan and Belarus would be very low—just $194
million—as a result of adopting the initial ECU CET (measured against a 2008 baseline). These effects
will primarily be observed in the Kazakhstan market. The estimated increase in exports due to adoption of
the CET would be less than 8 percent of the estimated increase in imports as the CET adapts to WTO
tariff bindings through 2020. The estimated short-run effect is fairly consistent with the actual
performance of Russia’s exports in Kazakhstan’s market over the period in question.5 The largest
increases in Russian exports to the ECU in the short run would be motor vehicles and parts ($56 million);
electrical and electronic machinery ($29 million); other machinery including computers ($21 million);
iron and steel products ($19 million); and plastics and plastic products ($9 million). As the CET declines
as a result of Russia adopting WTO tariff bindings, by 2020, total Russian exports to the other two ECU
countries are expected to decrease by $211.84 million (0.6 percent). This would eliminate the temporary
gains in Russian exports during the early years of the ECU. Russian exports to Kazakhstan and Belarus

4
  There have been concerns that introducing compound tariffs into the CET, adding a specific duty to ad valorem rates, may exceed Russia’s
bound rates in products such as large-capacity refrigerators. The EU Market Access Database (MAD) also suggests that a total of 1,576 product
lines have been “corrected” by Russia (abolished or introduced) relative to its 2007 tariff schedule, including tariff sub-codes (presumably
national tariff lines below the HS-6 level). This could be characterized as “manipulation” to avoid implementing the tariff commitments. EU
MAD also states that Russia’s import duties on coated paper and cardboard in the Single Customs Tariff were three times higher than its WTO
commitment (15 percent instead of 5 percent).
5
  Kazakhstan’s imports from Russia, as a share of its total imports, went up from 37.3 percent in 2007-08 to 42.2 percent in 2011-12. A portion of
this increase is likely due to Kazakhstan’s adoption of the CET after Kazakhstan joined the ECU in 2010.

                                                RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                              4
would suffer the largest decreases in the same technology-intensive products that had gone up when
sheltered by the artificial competitive advantage granted by the CET. Thus, this result mainly reflects the
elimination of trade diversion as competitive pressures emerge from more efficient third-country suppliers
of the goods for which the previous tariffs in ECU markets would drop; the tariffs Russian exporters face
would be unchanged at zero.

The fact that Russia’s trade outcomes depend much more on the WTO than on the ECU follows directly
from Russia’s geographic pattern of trade. Only 8 percent of Russia’s exports are destined for Belarus and
Kazakhstan (Error! Reference source not found.). Even if the ECU were to expand to all 12 CIS
members, it would still account for just 14 percent of Russia’s exports. Thus, Russia’s ability to be
competitive in the entire world market will always be more important than its ability to take advantage of
opportunities afforded by the special circumstances of the ECU. When considering non-oil exports, the
role of the CIS is somewhat more important. In total, 15 percent of Russia’s non-oil exports are destined
for Kazakhstan and Belarus, while the entire CIS absorbs 28 percent of Russia’s non-oil exports (Figure
2).
Methodology, Data and Baseline


The analysis was based on the SMART model—a market access simulation package included in the
World Integrated Trade Solution (WITS) software. As a partial equilibrium tool, SMART considers the
effect of a given policy in the market that is directly affected and ignores what happens in other markets
(see Annex B for a description of SMART). Consequently, to obtain simultaneous impacts of various
policy reforms in different markets the estimations from each simulation must be summed up. Throughout
the analysis, we decomposed trade effects into trade creation and trade diversion. Trade creation in
SMART is defined as the direct increase in imports following a reduction of the tariff imposed on good i
from country j. If the tariff is a preferential reduction then imports of good i from country j will increase
due to the substitution away from imports of good i from countries that become relatively more expensive
as a result of the preferential tariff. SMART defines this as the trade diversion effect.

To perform the simulations we used the Harmonized Commodity Description and Coding System (HS)
product classification at the 6-digit level using bilateral import data from United Nations Commodity
Trade Statistics Database (UN Comtrade) for Russia, Belarus, and Kazakhstan. Although Russia’s bound
tariff commitments are specified at the HS 10-digit level, averages are taken across HS 6-digit product
groups. Whenever information on applied MFN tariff rates was missing at the 6-digit level,6 MFN rates
based on the average of the HS 4-digit group to which 6-digit products belong were used as proxies for
missing values. Information on the applied CET and Russia’s schedule of accession commitments (tariff
bindings) was taken from Shepotylo and Tarr (2012). Information on Russia's tariff preferences on
imports from CIS countries and GSP beneficiaries was taken from the United Nations Conference on
Trade and Development (UNCTAD) Trade Analysis and Information System (TRAINS).

The study makes use of two baselines. A baseline of 2012-20 is used for the analysis of Russia’s tariff


6
    This is the case in 3,047 partner-product flows representing 2.87 percent of total observations in a given year.

                                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP            5
accession protocol to the WTO, representing the period during which the WTO commitments were
phased in. These results reflect the impact of the tariffs as fully phased in by 2020, as if they were
imposed on Russia’s trade patterns in 2012. For the ECU, a baseline of 2008-12 is used, since the changes
to tariffs in Kazakhstan and Belarus are phased in over 2010-2012. 2008 is chosen as the initial year
instead of 2010 both because of availability of annual tariff data in Kazakhstan and Belarus and because
2008 represents a more normal set of conditions than 2010, which is immediately following the Great
Recession of late 2008-09.7


2.2 Main Results
a) Assessment of the change in Russian imports from CIS and GSP countries and WTO members
        after Russia implements its WTO commitments and the effect on the ECU CET.

As a result of tariff cuts related to Russia’s WTO Accession Protocol commitments, to be reached by
2020, the total value of Russia’s imports compared to 2012 is projected to go up from $314.8 billion to
$318.3 billion (a 1.1 percent increase), across all products and trading partners. This is a relatively small
impact. Nevertheless, imports of nearly 60 percent of Russia's product lines are expected to rise. Welfare
gains arise from a projected increase in consumer surplus of $371.39 million (0.02 percent of Russia’s
GDP in 2012).8 This estimate of welfare gains appears relatively small. It is important to bear in mind that
the estimate reflects only the static efficiency gains from removing the tariffs. They do not count dynamic
gains, e.g. from technological spillovers associated with imported intermediate goods, nor do they take
into account the effects of trade facilitation or other provisions of the ECU. Nor do they include inter-
industry effects. For example, cheaper imports of intermediate goods may make exports of final goods
more competitive on the world market.

Estimates of the gains of tariff liberalization on a static efficiency basis tend to be small in the literature,
so the result presented here is not surprising. Nonetheless, the results of the model pertaining to relative
effects on different sectors are likely to be robust to an approach that considered other sources of potential
gains, and produced thereby larger estimates of aggregate welfare effects.

Analysis By Imported Product:
Trade-weighted average tariffs for all imported products are projected to drop by 2.2 percentage points
(from 7.8 percent of the average duty to 5.6 percent) once Russia fully adopts its WTO tariff bindings.
For products whose tariffs will go down, trade-weighted average tariffs are projected to decrease from an
average of 11.4 percent to 6.9 percent.9 The 10 HS 2-digit chapters (products) predicted to see the largest
increase in import values after the expected tariff cuts explain 63.3 percent of the total change in import
value. The predicted change in imports corresponding to these products alone is an increase of $2.2
billion (Table 1).


7
  Readers wishing an estimate of the joint effect on Russian sectors of the WTO tariff cuts and the changes in the ECU tariff jointly may consider
the estimates in percentage terms, when added, to constitute a very rough estimate of changes in Russian output, which leaves out general
equilibrium (inter-industry) effects.
8
    This static increase excludes any welfare gains for producers having access to cheaper intermediate inputs.
9
    It is predicted that 2,447 products at the HS6-digit level of aggregation will face a tariff cut.

                                                      RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                         6
The 15 countries expected to see the largest increase in exports to Russia by 2020 together account for
91.6 percent of the total net change in import value, and 74.8 percent of the total rise in import value.
Nine of these are European Union (EU) members; the top five are China, Germany, France, Italy, and
Poland. Furthermore, the EU-27 as a whole would be responsible for nearly half the increase in Russian
imports after 2020 (Table 2).

The 15 trading partners likely to experience the largest drops in their exports to Russia by 2020 account
for a combined reduction in import value of $0.79 billion (99.8 percent of total decreases in import value).
Decreases in import values are highest among the CIS economies, especially Ukraine and the two ECU
member countries, Belarus and Kazakhstan, whose preferences in the Russian market will erode after
Russia’s WTO accession commitments are reflected in the CET. Also adversely affected are four Least
Developed Countries (LDCs) (Malawi, Mozambique, Ethiopia, and Tanzania), which in 2012, had duty-
free access to the Russian market under its GSP (Table 3).

Analysis by product/country combinations:
Analyzing the change in Russian imports by main product/country combinations gives a clearer picture of
which partners will become more relevant and which less (see Annex 3, Table 1). The main displaced
import sources predicted are Belarus, losing out on 10 of the top 20 products, and Ukraine, losing out on
6. This is in line with expectations: these are geographically proximate countries with close commercial
links with Russia, which were reinforced by the preferential treatment granted to CIS and ECU countries.

On the other hand, in 9 of the 20 most affected products China’s exports to Russia are predicted to
increase the most. In addition, several advanced economies are among those predicted to expand exports
to Russia the most, including several EU countries, in the most technology-intensive categories (HS
Chapters 85, 87, and 88). China again dominates in 4 of 7 nested HS 6-digit products. Summing up, the
changes in Russian imports after the predicted change in the CET by 2020 because of Russia's WTO
commitments are expected to bring about static gains from trade in the form of a trade creation effect that
explains all the total increase in trade and an increase in consumer surplus of $371.9 million. However,
larger gains could come from dynamic effects brought about by heavier trade flows from advanced and
other emerging countries.

b) Assessment of the expected change in Russian exports to Belarus and Kazakhstan as a result of
        implementing the original ECU common external tariff (CET) and the implied reductions in the
        CET due to Russia’s WTO commitments.

To simulate the effect of the original ECU CET on Russia’s exports to Belarus and Kazakhstan, the
change in Russian export value is measured against a 2008 baseline of $35.82 billion, of which 64.2
percent are destined to Belarus and 35.8 percent to Kazakhstan. Total Russian exports to the combined
market are simulated to have increased by $194 million in 2012 (0.5 percent) across all products and
trading partners because of Belarus and Kazakhstan abandoning their MFN tariff and adopting the CET.10
Russia’s exports of technology-intensive products such as motor vehicles and electrical machinery to the


10
     Belarusian tariffs became closer to Russian than Kazakhstan’s because of CET exceptions introduced by the latter.

                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                7
ECU, top the list of products whose exports went up the most, reflecting a trade diversion effect from
competitive external sources and toward Russia. The estimated increases are mainly the result of changes
in tariffs charged to third countries targeting the Belarusian and Kazakh markets, since in 2008 tariffs
imposed on Russian products were already zero in all chapters, and remained so throughout the period
analyzed.

Russia’s exports to Kazakhstan increased the most in value terms—equivalent to $205.4 million—after
the latter adopted the CET. This increase accounts for 1.6 percent of Kazakhstan’s total imports from
Russia relative to 2008. It is worth noting that the top five trading partners whose exports to Kazakhstan
increase the most are all CIS members (Table 5). Meanwhile, the 15 countries—9 of them EU members—
whose exports to Kazakhstan drop the most, due to trade diversion resulting from Kazakhstan’s adoption
of the CET, together account for 87.5 percent of total decreases in import values. Moreover, the EU-27 as
a whole suffers 34.5 percent of the total decrease; the other six countries are China, the United States,
Turkey, the United Arab Emirates, the Republic of Korea, and Japan (Table 6).

The outcome for Russian exports destined for Belarus is different: total Belarus imports from Russia are
predicted to drop by net $11.8 million (0.05 percent of Russian exports to Belarus in 2008). This is a
result of tariff decreases for third countries after Belarus adopted the CET: trade formerly diverted to
Russia because of the CIS Free Trade Area (FTA). Conversely, Belarusian imports from China are
predicted to increase the most in value terms ($7.28 million, about 0.5 percent of total imports from China
in 2008). Among the top 15 trade partners whose exports to Belarus increase the most because of the
CET, only Uzbekistan and Moldova are members of the CIS; six are EU countries (Table 7). At the same
time, the 15 countries—7 of them EU members—that see the largest drop in exports to Belarus together
account for 45.4 percent of the total decrease in Belarus import value (Table 8). Georgia is likely to see
the largest drop: its exports to Belarus will go down by $2.5 million (22 percent of its exports to Belarus
in 2008).

Apart from the specific effects on Russian exports to the rest of the ECU to provide a context, it is worth
looking at some general results for imports after Belarus and Kazakhstan adopted the CET.

For Kazakhstan, using tariff data for 2008 and 2012, the change in the total import value is measured
against a 2008 baseline of $35.4 billion, from which imports from all partners are simulated to have
declined to $34.6 billion (2.3 percent) as a result of adopting the CET (combined with Kazakhstan’s
negotiated exceptions to it). Welfare losses arose from a $71.4 million decline in consumer surplus. As
adoption of the CET replaced the MFN tariffs Kazakhstan had applied in 2008, it appears that there was a
decrease in imports for 65.9 percent of Kazakhstan’s product lines and an increase for 5.5 percent, with
trade unchanged for 28.6 percent. For products affected by a tariff increase between 2008 and 2012, the
trade-weighted average tariff increased by 6.0 percentage points from 3.8 to 9.7 percent. Ten of the top 20
products whose import values dropped are meats; 5 are vehicles for the transport of people; and 2 relate to
pneumatics. Meanwhile, for products whose tariffs were reduced, trade-weighted average tariffs went
down by 2.9 percentage points, from 6.5 to 3.6 percent. Five of the top 20 products whose import values
went up are meats and other edible animal products and another 4 are types of furniture.


                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP        8
The simulated change in the total value of Belarus imports from all sources measured against a 2008
baseline amounts to $38.0 billion, from which the country’s total imports are simulated to have declined
by just $86.8 million (0.2 percent). A decrease in imports of 8.7 percent of product lines is accompanied
by an increase in imports of 27.9 percent of product lines as a result of the CET. Meanwhile, trade in 55.1
percent of Belarus product lines is unchanged—mainly because the MFN tariffs previous applied were
very similar to Russia’s, upon which the CET was largely based.

Analysis by Product/Country Combinations:
Analyzing the changes in Belarus and Kazakhstan imports by main products affected offers insight into
how introduction of the customs union affected Russian exports to both countries.

According to the simulation, Russia experienced the largest decrease in the export value of 19 of the top
20 products at HS 6-level that Belarus imports from all sources, which had actually grown when some of
its import tariffs were reduced after adoption of the ECU CET. Among these products are trailers,
engines, pipes and valves, air conditioners, medical appliances, sewing machines, and antibiotics, with
Russian export declines ranging from 3 percent to over 20 percent of 2008 base values. Germany was the
main beneficiary of lower import tariffs for these products, increasing its exports to Belarus, followed by
China. Russia, of course, fares better with regard to the top 20 products for which Belarusian imports
from all sources declined as a result of Belarus adopting the higher CET tariffs for certain products from
other countries. For 14 of those 20 products, Russia is simulated to have experienced the largest increases
in exports to Belarus. However, the magnitude of these higher exports is overshadowed in value terms by
the steep decreases in Belarus imports as a result of trade diversion of the same products from Japan,
Germany, the Netherlands, and others of the same products (see Annex 3, Tables 2a and 2b).

While the proportional decrease in Kazakhstan’s total imports because of the CET adoption is estimated
to have been 2.3 percent, analyzing the changes by main products affected clearly shows that Russia saw
the largest export decreases in all the top 20 products for which imports from all sources expanded as a
result of Kazakhstan adopting a lower CET for these products than the pre-existing tariff (Annex 3, Table
3), with exports of the most-affected products declining 1.3–11.3 percent. China is the main beneficiary
of trade creation for these products; it has the largest increase in exports to Kazakhstan in 8 of the top 20
products that have the largest import value increases. Germany comes in second with the largest increase
in 3, and the U.K. third with 2. For the top 20 products for which imports from all sources declined as a
result of Kazakhstan adopting a higher CET, in most there is trade diversion in favor of Russia.

The projected change in Russia’s exports to both Belarus and Kazakhstan after full implementation of its
WTO commitments through 2020 is measured against a 2012 baseline of $37.76 billion. The projection is
based on 55 percent of the exports being destined for Belarus and 45 percent for Kazakhstan.

Total Russian exports to the two markets by 2020, are simulated to decrease by $211.84 million (a 0.6
percent decrease). The exports to the ECU suffering the largest decreases are the same technology-
intensive products whose exports had gone up when they were sheltered by the artificial competitive
advantage granted by the originally higher CET preference. Thus, these results reflect mainly elimination
of trade diversion as competitive pressures emerge from more efficient third-country suppliers of these
                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP         9
goods who see their previous tariffs in these markets drop, while tariffs for Russian exporters remain
unchanged at zero.

Due to preference erosion, Russia is likely to experience the largest decrease in value terms in exports to
Belarus, down by $61.3 million, and Kazakhstan, by $150.6 million. For 2012, this represents just 0.3
percent of Russia’s exports to Belarus and about 1 percent of exports to Kazakhstan. This implies, for
Russia, that the impact of its WTO commitments on Kazakhstan’s applied MFN tariffs, though small, is
greater than the phase out of Kazakhstan’s CET exemptions. Russia, Georgia, Kazakhstan, and
Azerbaijan account for the entire total decrease in import value across all trading partners and products
for Belarus. As expected, three of these are CIS members; Georgia is a former member. Meanwhile, CIS
members collectively account for most of the total decrease in import value across all trading partners and
products, with Belarus, Ukraine, Kyrgyz Republic, and Uzbekistan joining Russia in rounding out the top
five (Tables 10 and 11).

The 15 countries predicted to experience the largest increase in exports to both markets by 2020, jointly
account for 92 percent of the total change in import value for Belarus, and for 78 percent of the total
change in import value for Kazakhstan. In both cases, most of these countries are EU members.
Furthermore, the EU-27 as a whole is predicted to account for 79 percent of the increase in Belarus’s
imports and 36 percent of the increase in Kazakhstan’s imports after the reductions in the ECU CET
necessitated by adoption of Russia’s 2020 bound rates. The remaining economies predicted to witness an
increase in their exports to both markets include China, Turkey, and Brazil for both, Hong Kong SAR,
China and Serbia in the case of Belarus, and Korea, Rep. and Japan in the case of Kazakhstan (see Tables
12 and 13).

Apart from the specific effects of these changes in Russian exports to other ECU members, both countries
will experience general increases in total import values and decreases in average tariffs, which are
conducive to welfare gains in both Belarus and Kazakhstan.

In general terms, total Belarus import value measured against a 2012 baseline is projected to increase only
very slightly, from $31.7 billion to $31.8 billion (0.3 percent) as a result of the tariff reductions
anticipated by 2020. Welfare gains arise from a projected increase in consumer surplus of $8 million.
Higher imports are predicted for 38 percent of Belarus product lines. Trade-weighted average tariffs for
all imported products are projected to decrease by 1.3 percentage points (from 4.9 to 3.6 percent) as a
result of the new tariff bindings. For products affected, trade-weighted average tariffs are projected to go
down by 3.4 percentage points, from 8.8 to 5.4 percent. After the reductions to the CET expected to take
place by 2020, the 20 HS 6-level products predicted to show the largest increases in import values explain
36.7 percent of the total change in import value for Belarus. The predicted change in imports
corresponding to these products alone is an increase of $36.3 million (0.8 percent).

Total import value for Kazakhstan measured against the 2012 baseline is also projected to increase, from
$44.4 billion to $44.6 billion (0.6 percent) across all products and trading partners as a result of the
reductions in the CET expected to be achieved by 2020 and the phase-out of its negotiated exemptions to
the CET. For example, imports of raw sugar (HS17011) to Kazakhstan for further processing is duty-free
                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP       10
through 2019. Kazakhstan also negotiated lower rates than the CET for a number of products for the
transition period, 2010–14. They cover 406 tariff lines, among them pharmaceuticals and medical
equipment, rail cars, raw materials for the chemicals, light manufacturing and wood-processing industries,
and apples and pears. Other tariff exemptions apply, for example, on goods for significant sport events,
and motor vehicles and their parts. Welfare gains arise from a projected increase in consumer surplus of
$18 million. An increase in imports is predicted for 39.6 percent of Kazakhstan product lines.

Trade-weighted average tariffs across all products imported by Kazakhstan are projected to decrease by 1
percentage point (from 3.8 to 2.8 percent) as a result of the new tariffs. For those products, trade-weighted
average tariffs are projected to decrease by 2.8 percentage points, from 7.4 to 4.6 percent.11 After the
expected changes to MFN tariffs, the 20 products likely to see the largest increase in import value explain
50 percent of the total change in import value for Kazakhstan. The predicted change in imports of these
products alone constitutes an increase of $120.8 million (0.3 percent). Some of these products (e.g.,
pharmaceuticals, goods vehicles) are of the type for which Kazakhstan negotiated transitory exemptions
to the CET, which suggests that some of Russia’s WTO commitments to lower the CET have been in
Kazakhstan’s interest.

Analysis by Product/Country Combinations:
While the proportional change in Russia’s total exports to Belarus and Kazakhstan as a result of the
expected changes to the CET is predicted to be small, analysis by the main products affected presents a
different picture. Indeed, Russia experiences the largest trade decrease in 17 of the top 20 products
predicted to expand the most for Belarus and in 14 of the top 20 for Kazakhstan. The Russian exports
most affected are: pharmaceuticals, motor vehicles, parts for machinery and buildings, cell phones and
telephone equipment, iron and steel, base metals, polyethylene and polypropylene, plastics, tires, aircraft,
particle board, prefabricated buildings, furniture and footwear with predicted declines of 2 to 12 percent
in exports to Belarus and 4.5 to 15 percent in exports to Kazakhstan (see Annex 3, Tables 4 and 5).12

In summary, Russia’s imports are likely to increase modestly as a result of implementing its WTO tariff
schedule, while Russia’s exports to Belarus and Kazakhstan are expected to increase by a much smaller
about as a result of implementing the ECU tariff. Thus, the impact of non-tariff measures may loom large
in the overall picture of how Russia’s trade policy affects its trade and economic outcomes. Such
measures are the topic of the next section.

        3. Non-Tariff Issues with the WTP, the ECU, and Trading Partners

The parallel accession of Russia to the WTO and the establishment of the ECU have had an impact on
Russia’s non-tariff measure (NTM) policies. Russia’s accession agreements before joining the WTO in
August 2012 implied far-reaching reform of NTMs, particularly regulatory standards that apply to both
imported and domestically produced goods. Meanwhile, formation in 2010 of the ECU and its associated
bodies has tended to perpetuate in the region methods of standard setting, and by extension NTM policies

11
     Tariff cuts are predicted for 1,772 products at the HS 6-digit level of aggregation.
12
 Again, some of these products are in categories where Kazakhstan negotiated exemptions to the CET, which suggests that the impact of Russia’s
WTO commitments on the CET will be favorable to Kazakhstan.

                                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                      11
that are closely aligned with older models. This process has created significant tensions with respect to
Russia’s NTM policies.

The WTO agreements have multiple provisions that relate to trade beyond tariffs. In particular, the family
of General Agreement on Tariffs and Trade (GATT) 1994 agreements negotiated in the Uruguay Round,
which established the WTO, covers such measures as trade-related investment policies (TRIMs), trade-
related intellectual property policies (TRIPs), government procurement, and customs formalities.
However, the largest number of trade frictions arises from regulatory measures applied to imports—
namely, sanitary and phytosanitary standards (SPSs) and technical barriers to trade (TBTs). In a series of
national surveys commissioned by UNCTAD, the share of trader complaints pertaining to SPS or TBT
issues ranged from a low of 65% in India, Tunisia, and Uganda, to a high of 93% in Thailand (Basu et al
2012). SPS and TBT complaints also probably dominate matters taken up by WTO bodies.

Issues related to regulatory measures applied to imports are governed by the SPS and TBT Agreements of
GATT 1994. These deal with the relationship between regulatory measures and trade in a parallel but
somewhat different manner. Both require that national technical regulations
   … shall be directed at legitimate objectives such as human health or safety; animal or plant life or
   health; national security requirements; the prevention of deceptive practices; or the environment; and
   shall not be applied in a manner which would constitute a disguised restriction on international trade
   or create unnecessary obstacles to trade.

TBT regulations “shall take into account available scientific and technical information” and SPS
measures “shall be based on scientific principles and shall not be maintained without sufficient scientific
evidence, when such evidence is available.”13 Each agreement refers to recognized international
standards, which can be used as a basis for WTO-compliant regulations.

The agreements also provide for disputes about compliance to be referred to the Dispute Settlement Body
(DSB) for consultation. The DSB has a multistage process for resolving issues. If a WTO member
prevails in the DSB, it may withdraw some market access from a non-compliant member in equivalent
value to the costs imposed by the non-compliance.

Russia made wide-ranging commitments in its WTO accession protocol, among them tariff cuts,
commitments to liberalize services, fixing of export duties on mineral fuels and oils, elimination of
quantitative restrictions on imports, and compliance with the full range of WTO agreements, including
SPS, TBT, TRIMs, and TRIPs. Some of these commitments are to be phased in. For example, tariffs are
to be reduced gradually through 2019. Some liberalization of services will also be phased in, e.g.,
limitations on foreign equity in telecoms companies (2015) and market access for foreign insurance
companies (2021). Russia has already joined the Information Technology Agreement (as summarized in
Blockmans, Kostanan, and Vorobiov, 2012)14 and is to join the Government Procurement Agreement by
2016.

13
  Article 2 of the SPS and Article 2 of the TBT Agreements treat these issues in a parallel but somewhat different manner.
14
  Russia joined the Information Technology Agreement, which removes tariffs on a wide variety of electronics and IT products, on September
13, 2013.

                                               RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                          12
Commitments of Russia’s WTO accession are to become part of ECU legislation, according to the Treaty
on the Functioning of the Customs Union in the Framework of the Multilateral Trading System
(November 2011). This treaty requires that ECU members that make commitments to the WTO inform
other members of these commitments and coordinate the actions necessary for accession. Russia’s WTO
commitments also require that changes in ECU legislation have to be announced to the WTO before
adoption, so that comments can be made to the appropriate ECU body (Blockmans et al., 2012). A
practical effect of this arrangement is that the WTO accessions of Belarus and Kazakhstan, currently in
progress, must also be coordinated with the ECU and with Russia, effectively giving Russia a seat at the
table in those negotiations.

WTO members have expressed concerns about the transparency of the ECU and its associated bodies.
The ECU, Eurasian Economic Commission (EEC), and other entities have not been notified to the WTO’s
Transparency Mechanism, although other regional trade agreements involving Russia and other members
of the former Soviet Union have.15 Russia’s accession working party expressed concern that WTO
members did not have rights to consult with and provide views to ECU bodies to ensure compliance with
WTO requirements.16 While Russian WTO representatives informed their counterparts that no measures
preclude WTO members from providing comments directly to the EEC or other ECU bodies and that, in
fact, such views were welcome,17 this issue is far from resolved.18 It is not clear, for example, that the
requirement that Russia have an inquiry point for WTO members under the SPS or TBT agreements
means there must be an effective inquiry point for ECU-related bodies dealing with the same issues.19 As
a result, the intertwined status of Russia and the ECU bodies is a regular issue when Russia engages with
other WTO members.20


3.1 NTMs in Russia and the ECU
GOST standards and administration of NTMs
The system of GOST standards,21 which dates back to the Soviet era, is the current basis for product and
process standards in the ECU and thus for NTMs on imported goods. The current version of the GOST
standards is administered in the CIS by the Euro-Asian Council for Standardization, Metrology and
Certification. Variations of the GOST standards have also been adopted at the national level, for example,
GOST-R in Russia, GOST-K in Kazakhstan, RB in Belarus, and UkrSEPRO in Ukraine. These standards
govern trade within the CIS, and thus within the ECU. Imports and exports in regional trade must satisfy
GOST standards even as Russia’s standards are meant to be transitioning to WTO standards that reflect


15
     http://rtais.wto.org/UI/PublicSearchByMemberResult.aspx?MemberCode=643&lang=1&redirect=1
16
     http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/min11/2.doc
17
     http://docsonline.wto.org/imrd/directdoc.asp?DDFDocuments/t/WT/min11/2.doc
18
     http://www.ustr.gov/sites/default/files/USTR%202014%20Special%20301%20Report%20to%20Congress%20FINAL.pdf
19
  Ian Bond (2014) writes, “An increasing problem for the EU as it tries to address these issues is that Russia tells it to talk instead to the Customs
Union of the Eurasian Economic Community. This (in theory at least) has competence in trade matters involving Russia, Kazakhstan, and
Belarus. The EU has no formal relations with the customs union or with the Eurasian Economic Commission that is its main decision-making
body.”
20
   For example, a decision by the Eurasian Economic Commission (EEC) on antidumping duties of light commercial vehicles from Germany and
Italy has led to a request for consultations by the European Commission with Russia, rather than with the EEC, which has no formal status in the
WTO. See http://www.wto.org/english/news_e/news14_e/ds479rfc_21may14_e.htm .
21
     The acronym GOST is derived from a Russian phrase meaning “state standard” (gosudarstvennyy standart in Romanized form).

                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                13
international norms. National enforcement bodies implement NTMs based on the GOST standards. In
Russia, these include Rosselkhoznador for veterinary and phytosanitary surveillance and Rospotrebznador
for consumer protection and sanitary and epidemiological surveillance.

The philosophy behind the GOST standards and those of other countries diverge in important ways.
GOST standards cover product characteristics, production techniques, and packaging for processed
products, and are designed to ensure that the same goods produced by different firms are highly
compatible and interchangeable. International standards set basic requirements for public safety and
health but allow the private sector wide latitude to produce products differentiated by consumer taste. The
private sector imposes product quality throughout the supply chain rather than the state imposing it by
end-of-pipe inspection. It is argued that the detail, specificity, and rigidity of the GOST standards stifle
innovation, allow little role for science-based risk assessment of safety and health issues, and create both
compliance problems for firms and monitoring problems for government (World Bank, 2007).

The GOST standards may also pose a potential issue for Russian export competitiveness. Consumers in
global value chains (GVCs) are likely to prefer goods produced to international standards, as are
household consumers in high-income countries when they select sophisticated goods such as automobiles
and cell phones. To the extent that the product characteristics specified by the GOST standards diverge
from those expected in the broader international market, they are likely to lead to Russian products that
are less able to satisfy global export demand.

Institutional inertia has made it difficult to modify the standards, particularly for the large volume of
intra-CIS trade based on historical ties. However, Central and Eastern European countries that have joined
the EU, such as Poland and Lithuania, as well as countries such as Vietnam and Laos, have shown that
GOST standards can be replaced.22

The efforts made in successful cases of reform are non-trivial. A complete overhaul of laws and
regulations may take 5 to 10 years, working in close cooperation with expertise in the relevant areas of
health and safety, and in international regulatory experience. Capacity building in risk assessment must be
acquired, inspection and monitoring programs may need to be overhauled, testing facilities adjusted and
staff trained. The budgetary costs of such a reform effort are non-trivial.23

Line item profile of Russia and ECU NTMs
Almost all goods imported into Russia are covered by NTMs, including over 90 percent of tariff lines in
14 of the 16 sections of the Harmonized System (Table 14). For the other two sections (raw hides, skins,
and leather, and wood products), NTMs cover at least 80 percent. Coverage of Russia’s imports by value
exceeds 80 percent in 12 of 16 HS sections. High NTM frequency and coverage ratios are not unusual for
large economies with fully elaborated regulatory systems. Russia’s coverage is comparable to that of
China, the EU, and India, though higher than in many developing countries (Breaux, Cabral, Ferrantino
and Signoret, 2014).

22
     Ibid, pp. 39-42.
23
     Ibid, pp.xv-xvi.

                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP       14
Russia’s use of pre-shipment inspections and other formalities is high by international standards, as is its
use of price-control measures. As Figure 3 shows, the frequency ratio for pre-shipment inspections and
other formalities24 (UNCTAD category C) exceeds 90 percent for most product categories, as does the
frequency of price-control measures, such as additional taxes and charges (UNCTAD category F). These
measures are relatively uncommon for other countries—frequency ratios for pre-shipment inspections and
other technical measures are typically under 20 percent in most countries, while frequency ratios for price
control measures are typically under 10 percent.25 The data may understate the use of other formalities—
requirements to pass through specific ports for customs are reported to be numerous and burdensome26
but do not appear in the UNCTAD data.

SPS measures in Russia and the ECU extend well beyond agriculture. It is customary for most countries
to have SPS measures for the majority of agricultural imports (HS 01-24), but Russia also has SPS
measures for many chemical products; plastic and rubber products; hides, skins, and leather; wood and
wood products; and textiles (Figure 3), for which SPS measures are rare internationally—the EU profile is
presented as a comparator. The appearance of SPS measures in some of these unusual categories is
reflected elsewhere in the ECU, in particular Kazakhstan.

While there are some cases in which SPS measures may be appropriate in non-food sectors (e.g. for pests
that may travel in wood products), it is not clear why Russian SPS measures have such a broad coverage.
Since many of these measures are for products not intended for human consumption, and not usually
subject to quarantine risk, there is the potential that some of these measures could lead to frictions with
trading partners and may be vulnerable to WTO challenge.

The profile of Russia’s technical barriers to trade is similar to that of the EU. As figure 4 shows, the
frequency of Russia’s TBT measures and the EU’s are similar, reflecting a complex and elaborate
regulatory system. TBT barriers are less likely to be seen in ECU member Kazakhstan as of 2012,
although operation of the ECU should in theory cause these to be harmonized over time.

NTMs and Russia’s trading partners
When NTMs weigh heavily on trade, traders and trading partners are likely to express their concerns.
Exporters having difficulty doing business in Russia are likely to register complaints with their own
governments, which in some cases will elevate these to public attention. Such concerns do not always
mean that an NTM is having a significant economic effect, or that it creates a problem for the WTO or
another legal arrangement. Nonetheless, the concerns of traders, whether or not shared by their
governments, provide a valuable supplement to legal descriptions of NTMs in terms of where there might
be an economic impact. Moreover, for every authentic case of an exporter having difficulty selling to
Russia, there is likely to be a Russian importer having difficulty in buying whose activities and customers
are similarly disadvantaged.

24
   These include direct consignment requirements, requirements to pass through specified port of customs, import-monitoring and surveillance
measures, and other automatic licensing measures.
25
   Breaux et al (2014), op.cit.
26
     See below under Customs.

                                               RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                             15
This section is derived from concerns reflected in reports of trading partners and from media reports.
Similar information is collected in the WTO through committees and other mechanisms. As one of the
world’s 20 largest traders, Russia is scheduled to receive a WTO Trade Policy Review every four years,
presumably no later than 2016, which will provide valuable information on Russia’s NTMs and how they
be affecting the country’s trading partners.


3.2 Technical Barriers to Trade
It may take significant time and effort for Russia’s TBT regulations to be brought into conformity with
WTO and international standards. Russia has long required that imported goods obtain certificates of
conformity with Russian technical regulations related to, e.g., textiles, leather and footwear, ceramics,
pharmaceutical, chemicals, cosmetics, electronics, construction materials, and alcoholic beverages.27
Since Russia’s accession to the WTO August 2012, there has been continuing work to bring regulations
into conformity with WTO requirements; such standards are also referenced in the WTO TBT
Agreement. Since standards adopted by the EEC for imports into the ECU also become part of Russian
regulations, they are subject to WTO disciplines.

Russia’s notifications to the WTO’s TBT Committee may not be complete.28 Article 10 of the TBT
Agreement requires that WTO members provide information about technical regulations, standards, and
conformity assessment procedures and set up an enquiry point where WTO members and other interested
parties, e.g., traders, can obtain information. In 2013, its first full year of membership, Russia notified 28
technical regulations to the WTO; there may be both Russian and ECU regulations that have not yet been
notified. Mentioned as not yet notified have been registration requirements for alcohol products;
amendments to the Federal Law on Circulation of Medicines, some pertaining to medical devices; and
measures regarding Global Navigation Satellite System (GLONASS)-compatible29 navigational systems
in civil aircraft and revision of amendments to the EEC’s food labeling regulations (USTR 2014 TBT
Report).

The objectives of some Russian regulations may not be clear; others may be difficult to reconcile with
scientific or technical information, or be more stringent than internationally recognized standards. Here
are some examples:

The ECU introduced new labeling requirements for food products on July 1, 2013, mainly on nutritional
components, allergens, and genetically engineered (GE) foods. They also require labels on products
containing sweeteners, saying that overuse can cause digestive problems, and on products with food
coloring, stating that food coloring affects a child’s ability to concentrate.30 These may go beyond the
requirements of the Codex General Standard for Food Labeling, and it is not clear what scientific research
they are based on. There appears to be some flexibility in applying these requirements, since the EEC

27
     http://madb.europa.eu/madb/barriers_details.htm?barrier_id=095224&version=5.
28
     The text of the TBT Agreement is at http://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm.
29
     Global Navigation Satellite System (https://www.glonass-iac.ru/en/index.php).
30
     USTR 2014 TBT Report, p. 94.

                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP   16
noted that it would allow products in compliance with pre-2013 regulations to be marketed in the ECU
until February 15, 2015.

Both Russia and the ECU have recently imposed new standards on alcoholic beverages in terms of
labeling and warehousing requirements and conformity assessment procedures.31 For example, labels on
all alcoholic beverages must have an expiration date or indicate that the expiry date is unlimited if the
storage conditions are observed. Under the Codex products containing more than 10 percent alcohol do
not expire and are explicitly exempt from such requirements. Proposed amendments to the ECU technical
regulations require that whiskey be aged no less than three years. In similar areas, Russia has liberalized
recently, in November 2012, removing mandated aging of rums. However, it is said that Russian
importers of U.S. products often complain that their import applications are denied.32

Safety standards for clothing, footwear, and other products destined for use by children may exceed
international norms and constitute an impediment to trade.33 The ECU adopted its Technical Regulation
TR 007/2011 on Safety of Products Intended for Children and Adolescents before Russia’s WTO
accession. The regulation covers textiles, clothing, footwear, and other goods for children and
adolescents, considering them as dangerous products that have a high risk for consumers. There are
mandatory certification and labeling requirements and detailed requirements for documentation, all of
which appear to exceed current international practices. EU exporters of such goods to Russia suggest that
they are needlessly damaging to trade. For example, it is required that testing and conformity of such
products be done exclusively in Russia. Another requirement is that the lining of children’s shoes cannot
be made of artificial or synthetic materials. In non-Russian markets, it is considered that such lining can
provide extra quality, for example insuring the breathability of the shoe. It is unclear what scientific
information would be used to justify the requirement of non-artificial linings.


3.3 Sanitary and Phytosanitary Standards
Harmonization of Russia’s SPS standards with the WTO’s is in process. As with TBT, SPS measures are
now meant to be harmonized at the ECU level, a process that began in 2010, when the ECU was formed:
The ECU agreements provide for SPS harmonization with Russia’s WTO obligations. Accordingly, large
trading partners such as those in the EU now inform potential exporters of ECU measures while
negotiating memoranda of understanding with Russia.34 The United States reports engagement with both
Russian and ECU authorities on SPS issues (U.S. Trade Rep. 2014, p. 75).

Differences in national standards account for some of Russia’s trade frictions in agriculture. While the
SPS agreement imposes basic requirements on admissible measures, differences in how WTO members

31
   Amendment No. 286-FZ (December 2012); Resolution #474 “On Submission of Notifications about the Beginning of Turnover of Alcoholic
Products on the Territory of the Russian Federation” (entry into force October 1, 2013); revisions to the “Technical Regulation on Alcohol
Product Safety,” and Regulation Order #59 on alcoholic beverages.
32
     USTR 2014 TBT Report, op.cit., p. 95.
33
   European Commission Trade Market Access Database, http://madb.europa.eu/madb/barriers_details.htm?barrier_id=095224&version=5,
downloaded June 27, 2014.
34
   http://ec.europa.eu/food/international/trade/sps_requirements_en.htm.



                                               RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                          17
interpret the requirements give rise to significant variation. Russia’s relatively restrictive stance on
genetically modified organisms, animal feed additives, residues of veterinary drugs, and washing of
chicken with chlorine to remove salmonella is generally consistent with SPS practice in the EU but less
consistent with practice in such countries as Brazil or the United States.35 This alone would account for
some trade frictions. However, SPS issues affecting the large trade flows between Russia and the EU can
arise on other grounds.

In a case receiving wide attention, Russia imposed bans on live pigs, pork, and pork products from the EU
beginning in January 2014. The trade affected is significant. In 2013, Russia imported $2.35 billion of
pork and live swine, of which 56 percent ($1.33 billion) came from the EU. As of April 21, 2014, Russian
pork prices were among the highest in the world, reaching $1.44/kg live weight compared to US 69 cents
in Brazil, 76 cents in China, and 85 cents in Spain.36 Russia is the largest market for EU exports of animal
products (live animals, meat, and dairy) as well as for fruits and vegetables.

The bans followed the detection of four cases of African swine fever (ASF) in wild boars in Lithuania and
Poland; however, the ban applies to live pigs, pork, and pork products from throughout the EU. There
followed bans on live pigs from the U.S. on May 30, 2014, due to concerns over the spread of porcine
epidemic diarrhea virus.37 Russia is also considering banning imports of pork from Brazil and Canada
over trace quantities of the growth stimulant ractopamine, which is banned in Russia. Imports of U.S.
pork had previously been banned over ractopamine but were then readmitted. The authorities cite a
variety of reasons to justify import restrictions.

On April 18, 2014, the EU requested WTO consultations with Russia over the import ban on live pigs, the
first step in bringing a case before the DSB. One issue in the dispute involves “localization requirements,”
which refer to attempts by a country or customs territory (such as the EU) to impose measures—such as
quarantines—for control of diseased animals on part of its territory and to have the rest of the territory
certified as disease-free. Russia maintains that EU localization measures are not sufficient and that
additional information is required, which the EU has not provided. The EU states that it has sought to
provide relevant information and that measures which would ban pork from, e.g., Spain, because of SPS
issues in Lithuania and Poland are not scientifically grounded. It further states that Russia does not appear
to effectively control ASF on its own territory, citing nearly 1,000 cases of the same disease among
Russian feral pigs (wild boar) and domesticated animals since 2007. On July 22, 2014, the DSB
authorized a panel for the dispute, which has not yet been appointed.


Box 1. August 2014 Ban on Imported Food Commodities

Russia’s extensive ban on imported food commodities, imposed on August 7, 2014, is unlikely to result in
a WTO challenge in the near term. The ban covers imports from the EU, the U.S., Canada, Australia, and

35
   See http://www.ustr.gov/sites/default/files/FINAL-2014-SPS-Report-Compiled.pdf , pp. 75-79, for examples of SPS issues in U.S.-Russia
trade. An example of such issues revolves around the requirement that CU officials (not Russian officials) perform establishment inspections in
the United States to certify individual facilities as eligible for export.
36
     “Russia Hog Markets,” http://www.thepigsite.com/swinenews/36480/russia-hog-markets , dated May 1, 2014.
37
     See http://www.foodsafetynews.com/2014/06/virus-scare-causes-russia-to-suspend-u-s-pig-imports/ , dated June 3, 2014.

                                                 RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                            18
Norway of beef, pork, poultry, fish, sausages and meat products, vegetables, fruits and nuts, and milk and
dairy products. The ban is to expire in one year. In ideal cases, the Dispute Resolution Mechanism with
appeal requires about 15 months and in practice can take many years when the parties strongly disagree.
Moreover, Russia has invoked national security concerns in connection with the ban, which is understood
to be retaliation for economic sanctions imposed by the targeted parties as a result of the conflict in
eastern Ukraine. The WTO agreements contain a broad exception for countries to determine what national
security measures they apply to trade (GATT 1947, Article XXI (b)(iii)). Such claims have rarely been
challenged, and there is little WTO jurisprudence on the contestability of national security measures.

Some of the products covered by the August 7 ban were already excluded by Russian SPS policy, most
notably live pigs, pork, and pork products from the EU; these amounted to $1.3 billion of Russian imports
in 2013, compared to the entire $9.6 billion of imports covered by the August 7 ban. The SPS and other
Russian policies would presumably stay in place after the August 7 ban expires.



3.4 Other Concerns
Tariffs
The ECU introduced new compound tariffs, adding a minimum specific duty to ad valorem rates, in 2013
(United States Trade Representative (USTR) 2013: 3). These tariffs cover both agricultural and industrial
products. Japan’s Ministry of Economy of Trade and Industry (JMETI) identified this as a priority issue
in May 2014. One example that affects Japan has to do with large-capacity refrigerators. The WTO bound
duties for these was 20 percent in 2013 and is scheduled to decline to 13.6 percent by September 2016.
The applied rates read “20 percent, but not less than 0.24 euro per 1 liter” in August 2012 and “18.3
percent, but not less than 0.16 euro per 1 liter” in August 2013. JMETI states that Japanese companies are
overpaying duties, and that applied rates exceed bound rates for some 200 items, which includes cheese,
pulp, and secondhand cars. The U.S. has also expressed concern that the compound tariffs may exceed
Russia’s WTO bound rates (USTR 2013:3).

In addition to compound tariffs, other concerns have been raised about Russia’s compliance with its WTO
tariff commitments. The EU Market Access Database (MAD) says that Russia has “corrected” (abolished
or introduced) a total of 1,576 HS codes relative to its 2007 tariff schedule, including tariff sub-codes
(presumably national tariff lines below the HS-6 level). The MAD characterizes this as “manipulation” to
avoid implementing the tariff commitments. The MAD also states that Russia’s import duties on coated
paper and cardboard in the Single Customs Tariff were three times higher than committed (15 rather than
5 percent).38

In July 2013, the EU requested WTO consultations regarding Russia’s auto recycling fees. The EU argues
that these fees apply only to imported vehicles and not to domestic or ECU vehicles, and thus undermine
Russia’s MFN obligations with respect to its tariff schedule, as well as raising TBT issues.39

38
     http://madb.europa.eu/madb/barriers_details.htm?barrier_id=060014&version=17.
39
     http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds462_e.htm.

                                                 RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP   19
Customs
Customs clearance procedures in Russia have also been an issue. Some European exports may only pass
through specific border crossings, and European traders claim these points of entry often change on short
notice and without warning. Furthermore, documentary requirements are said to be often inconsistent,
arbitrarily interpreted, and not in line with Russia law. This includes requiring a copy of the export
declaration, a document that belongs to the customs authorities of the exporting country and is not
required in modern customs practice. The EU is also monitoring border congestion, an area of concern for
many years.40

        4. Conclusions

To summarize, the analysis finds that increases in Russia’s imports due to Russia’s WTO tariff
concessions are likely to be modest, and increases in Russia’s exports due to trade diversion caused by the
common external tariff are likely to be much smaller. This is because ECU countries are only a small
share of Russia’s global market. Therefore, for most products and sectors, the impact of the WTO is likely
to be much more significant than that of the ECU as far as tariffs go. The impact of NTMs in Russia and
the ECU, though difficult to quantify, is potentially more important for the market than tariff changes,
because of the significant divergence between the GOST standards and standards prevailing in most of
Russia’s trading partners.

On tariffs, this study has found that continued multilateral (WTO) tariff liberalization is of far greater
importance to Russia than ECU policy. ECU countries receive a relatively small share of Russia’s exports
and therefore offer limited opportunities for trade diversion, which will be reversed eventually through
multilateral tariff liberalization. Russia’s exports to Kazakhstan and Belarus accounted for only 8 percent
of its total exports in 2013. Even if the ECU were to expand to all 12 members of the Commonwealth of
Independent States (CIS), it would still account for only 14 percent of Russia’s total exports. Even when
exports of mineral fuels are left out, Kazakhstan and Belarus only account for 15 percent of Russia’s non-
fuel exports, and the entire CIS only 28 percent. Thus, the success of Russia’s exports depends primarily
on how well they can compete in the larger and higher-income markets of the world as a whole.

The analysis finds that full implementation of Russia’s WTO tariff schedule through 2020, would raise
goods imports by about $3.5 billion (1.1 percent) compared to 2012.41 The lower prices of these imports
as a result of tariff cuts in many sectors would create benefits to Russian consumers equal to
approximately $370 million. The largest categories of estimated import increases would be electrical and
electronic equipment ($592 million, 2.7 percent); pharmaceutical products ($365 million, 2.7 percent);
meats ($248 million, 3.4 percent); plastics and plastic products ($238 million. 2.1 percent); machinery
($151 million, 0.3 percent); iron and steel products ($139 million, 1.8 percent); aircraft ($132 million, 3.8
percent); footwear ($116 million, 2.7 percent); and cosmetics and related products ($112 million, 3.1
percent).


40
     http://madb.europa.eu/madb/barriers_details.htm?barrier_id=085156&version=5.
41
     These estimates do not include inter-industry effects, dynamic effects of trade liberalization, or the effects of non-tariff provisions of the ECU.

                                                     RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                20
Based on the above, the composition of imports is likely to shift toward consumer goods as a result of
implementing the WTO tariff changes. Of those technologically sophisticated exports that may provide
spillovers for economic growth, some would be likely to expand in proportional terms (e.g. electrical and
electronic equipment) while others would contract in proportional terms (e.g. machinery).

While the tariff cuts would benefit Russian consumers, the increase in imports would create competitive
pressure for Russian producers, though that would be very modestly offset by higher Russian exports to
members of the ECU, primarily Kazakhstan. The latter are likely to come about because of higher tariffs
in Kazakhstan as a result of adopting the ECU common external tariff (CET), since there are many cases
in which Russia’s tariffs, the basis of the ECU tariff, are higher than Kazakhstan’s tariff was before the
customs union.

In the short run, increases in Russian exports to the ECU would amount to an estimated $194 million,
measured against a 2008 baseline. The estimated increase in exports due to the ECU would be less than 8
percent of the increase due to WTO accession. In the short run, higher Russian exports to the ECU would
mainly be motor vehicles and parts ($56 million); electrical and electronic machinery ($29 million); other
machinery including computers ($21 million); iron and steel products ($19 million); and plastics and
plastic products ($9 million). In the long run, as the ECU CET declines to reflect Russia’s WTO
commitments, by 2020 total Russian exports to the combined market are estimated to drop by $212
million, a 0.6 percent decrease. Exports to Kazakhstan and Belarus that would fall the most would
basically correspond to the same technology-intensive products whose exports had previously increased
when sheltered by the artificial comparative advantage granted by the ECU preference.

As tariffs decline for most goods, NTMs could well become more significant obstacles to deeper trade
integration. There is therefore a solid case for Russia to streamline and update its technical regulations to
match international best practices by ensuring that their use is limited only to ensuring that major policy
objectives, such as public health, safety, and environmental protection are met. Standards that provide
excessively detailed specifications of product characteristics and processes should be phased out, as
should any standards that lack a firm scientific basis related to major policy objectives. Voluntary
standards should be used in all other cases to govern other product attributes, such as quality, and should
be set by private stakeholders. Aspects of products and production processes not tightly linked to major
policy objectives may not need to be regulated at all. Private stakeholders may meet in national and
international standards bodies when issues such as interoperability or agreement on a recognized set of
product attributes arise. The emergence of international private technical standards in information and
communications technology, in agro-food sectors, and in the International Organization for
Standardization (ISO) process generally, provides illustrative examples (ISO, 2010).

Russia’s current trade policies can cause a variety of frictions with its trading partners in terms of TBT,
SPS, tariffs, and customs policies. It may take considerable time and effort before Russia’s pre-WTO
TBT and SPS regulations are brought into conformity with WTO and international standards. Some
Russian regulations may have unclear objectives, be difficult to reconcile with current scientific or
technical information, or be more stringent than international standards. Examples of products that have
                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP         21
given rise to frictions are alcoholic beverages; safety standards for clothing, footwear, and other products
for children; and live pigs, pork, and pork products.

Russia’s philosophy in setting standards differs from that of other countries in important ways, creating
potential tensions with other WTO members. The system of GOST standards, which dates back to the
Soviet era, is the current basis for product and process standards for ECU members, and thus for NTMs
on imported goods. GOST standards cover product characteristics, production techniques, and for
processed-products packaging, and are designed to ensure that the same goods produced by different
firms are compatible and interchangeable. International standards focus on basic requirements for public
safety and health while allowing the private sector wide latitude to produce products differentiated to
respond to consumer tastes. The private sector imposes product quality throughout the supply chain,
rather than the state imposing it by end-of-pipe inspection. It is argued that the detail, specificity, and
rigidity of the GOST standards stifle innovation, allow little role for science-based risk assessment on
safety and health issues, and create both compliance problems for firms and monitoring problems for
government.

The GOST standards may also pose a potential issue for Russian export competitiveness. Consumers in
global value chains (GVCs) are likely to prefer goods produced to international standards, as are
household consumers in high-income countries when they select sophisticated goods such as automobiles
and cell phones. To the extent that the product characteristics specified by the GOST standards diverge
from those expected in the broader international market, they are likely to lead to Russian products that
are less able to satisfy global export demand.




                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP        22
References

Basu, Sudip, Hiroaki Kuwahara and Fabien Dumesnil (2012), “Evolution of Non-Tariff Measures:
Emerging Cases From Selected Developing Countries,” UNCTAD Policy Issues in International Trade
and Commodities, Study Series No. 52. New York and Geneva: United Nations.

Blockmans, Steven, Hrant Kostanyan and Ievgen Vorobiov (2012), “Towards a Eurasian Economic
Union: The Challenge Of Integration and Unity,” CEPSR Special Report No. 75 (December 14).
Brussels: Centre for European Policy Studies.

Bond, Ian (2014), “The EU and Russia: Uncommon Spaces.” London: Centre for European Reform.

Breaux, Michele, Yasnanhia Cabral, Michael J. Ferrantino and José Signoret (2014), “Quality-Adjusted
Estimates of NTM Price Gaps,” USITC Office of Economics Working Paper No. 14-08-B, August.

European Commission, Market Access Database. Found at http://madb.europa.eu/madb/indexPubli.htm .

International Organization for Standards (ISO), “Standards and ‘Private Standards’ “, Geneva: 1SO, 2010,
found at http://www.iso.org/iso/private_standards.pdf .

United States Trade Representative, Office of the (2014) 2014 Report on Technical Barriers to Trade, p.
93. http://www.ustr.gov/sites/default/files/2014%20TBT%20Report.pdf; April 2014.

World Bank (2007), Food Safety and Agricultural Health Management in CIS Countries: Completing the
Transition, Washington DC: The World Bank.




                                   RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP     23
Figure 1. Russian Exports by Destination, 2013




Source: COMTRADE.
Notes: MENA = Middle East and North Africa, Non-CU CIS = members of the Commonwealth of Independent States, not
in the Eurasian Customs Union.




                                     RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP          24
Figure 2. Russian Non-Oil Exports by Destination, 2013




Source: COMTRADE.
Notes: MENA = Middle East and North Africa; Non-CU CIS = members of the Commonwealth of Independent States, not
in the Eurasian Customs Union. ROW = Rest of the World.




                                     RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP          25
Figure 3. SPS Frequency

                                                                              Russia   Kazakhstan   EU

                                                0      20          40         60         80         100

           01-05 Animal & Animal Products

                   06-15 Vegetable Products

                            16-24 Foodstuffs

                     25-26 Mineral Products

                             27 Oil Minerals

        28-38 Chemicals & Allied Industries

                      39-40 Plastics/Rubbers

     41-43 Raw Hides, Skins, Leather & Furs

             44-49 Wood & Wood Products

                               50-63 Textiles

                  64-67 Footwear/Headgear

                          68-71 Stone/Glass

                                72-83 Metals

                  84-85 Machinery/Electrical

                        86-89 Transportation

                        90-97 Miscellaneous



Source: UNCTAD.




                                          RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP   26
Figure 4. TBT Frequency
                                                                         Russia   Kazakhstan   EU

                                               0      20        40        60         80        100

         01-05 Animal & Animal Products

                   06-15 Vegetable Products

                           16-24 Foodstuffs

                    25-26 Mineral Products

                            27 Oil Minerals

       28-38 Chemicals & Allied Industries

                     39-40 Plastics/Rubbers

    41-43 Raw Hides, Skins, Leather & Furs

            44-49 Wood & Wood Products

                              50-63 Textiles

                  64-67 Footwear/Headgear

                         68-71 Stone/Glass

                               72-83 Metals

               84-85 Machinery/Electrical

                       86-89 Transportation

                       90-97 Miscellaneous



Source: UNCTAD.




                                          RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP    27
Table 1. Ten Largest Increases in Russian Imports by Product, HS2-digit Level,
2012–20
                                                                                                          Change in
                                                                                                         Import Value   Increase in Total
                                                                                                            (US$,       Russian Imports,
      Product   Product description                                                                        millions)        (Percent)
        85      Electrical machinery and equipment and parts thereof; sound recorders and reproducers,       592               1.7
                television image and sound recorders and reproducers, and parts and accessories of
                such articles
        30      Pharmaceutical products                                                                      365               2.7
         2      Meat and edible meat offal                                                                   248               3.4
        39      Plastics and articles thereof                                                                238               2.1
        84      Nuclear reactors, boilers, machinery and mechanical appliances, and parts thereof            151               0.3
        94      Furniture; bedding, mattresses, mattress supports, cushions, and similar stuffed             145               3.2
                furnishings; lamps and lighting fittings, not elsewhere specified or included;
                illuminated signs, illuminated nameplates and the like; prefabricated buildings
        73      Articles of iron or steel                                                                    139               1.8
        88      Aircraft, spacecraft, and parts thereof                                                      132               3.8
        64      Footwear, gaiters and the like; parts of such articles                                       116               2.7
        33      Essential oils and resinoids; perfumery; cosmetic or toilet preparations                     112               3.1

Source: World Bank.




                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                            28
Table 2. Trade Partners Predicted to See the Largest Increases in Exports to Russia, 2012-
20
                                                                                                Increase in Import Value Explained
                        Change in Value of Russian Imports   Increase in Russian Imports from   by Increased imports from Partner
     Partner                      (US$, millions)                 Partner, 2012 (Percent)                    (Percent)
     EU-27                           2,115.4                               1.6                                 48.8
     Of which:
       Germany                        476.2                                1.2                                 11.0
       France                         286.3                                2.2                                 6.6
       Italy                          246.9                                1.9                                 5.7
       Poland                         204.0                                2.7                                 4.7
       Netherlands                    105.6                                1.8                                 2.4
       Spain                           94.7                                1.9                                 2.2
       United Kingdom                  85.0                                1.0                                 2.0
       Belgium                         75.7                                1.7                                 1.8
       Hungary                         62.8                                2.0                                 1.5
     China                           1,000.1                               1.9                                 23.1
     United States                    201.2                                1.3                                 4.6
     Turkey                           116.4                                1.7                                 2.7
     Korea, Rep.                      109.9                                1.0                                 2.5
     Canada                            92.5                                4.2                                 2.1
     Japan                             83.1                                0.5                                 1.9

Source: World Bank.




                                              RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                      29
Table 3. Trade Partners Predicted to See the Largest Decreases in Exports to Russia
                                   Change in the Value of Russian    Decrease in Total Russian
     Partner                          Imports (US$, millions)       Imports, 2012–20 (Percent)
     Ukraine                                   -322.9                          -1.8
     Belarus                                   -283.8                          -2.2
     Kazakhstan                                -105.3                          -1.1
     Moldova                                   -21.4                           -4.5
     Uzbekistan                                -20.9                           -1.5
     Azerbaijan                                -15.2                           -2.8
     Armenia                                    -7.0                           -2.3
     Kyrgyz Republic                            -6.1                           -3.2
     Turkmenistan                               -5.4                           -2.9
     Georgia                                    -3.0                           -3.1
     Malawi                                     -0.8                           -1.1
     Tajikistan                                 -0.6                           -0.9
     Mozambique                                 -0.5                           -0.8
     Ethiopia                                   -0.5                           -2.3
     Tanzania                                   -0.4                           -0.8

Source: World Bank.




                             RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP             30
Table 4. Largest Increases in Russian Exports to Belarus and Kazakhstan by Product at the
HS 2-digit Level, 2008–12
                                                                                                                                     Change in
                                                                                                                  Change in Value     Value of
                                                                                                                     of Russian       Russian
                                                                                                                      Exports         Exports
     Product   Product description                                                                                 (US$, millions)   (Percent)
       87      Vehicles other than railway or tramway rolling stock, and parts and accessories thereof                  56              6.7
       85      Electrical machinery and equipment and parts thereof; sound recorders and reproducers,                   29              2.8
               television image and sound recorders and reproducers, and parts and accessories of such articles
       84      Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof                            21              0.9
       73      Articles of iron or steel                                                                                19              1.3
       39      Plastics and articles thereof                                                                             8              1.1
       94      Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings;              7              3.7
               lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated
               nameplates and the like; prefabricated buildings
       30      Pharmaceutical products                                                                                   6              6.3
       44      Wood and articles of wood; wood charcoal                                                                  6              1.5
       33      Essential oils and resinoids; perfumery, cosmetic or toilet preparations                                  5              4.5
       86      Railway or tramway locomotives, rolling stock and parts thereof; railway or tramway track                 4              1.0
               fixtures and fittings and parts thereof; mechanical (including electromechanical) traffic
               signaling equipment of all kinds

Source: World Bank.




                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                31
Table 5. Exporters to Kazakhstan Likely to Gain the Most from Kazakhstan’s Adoption of
the CET
                                     Change in Import Value      Percentage of Total 2008 Kazakh
     Partner                            (US$, millions)               Imports from Partner
     Russia                                  205.4                             1.6
     Belarus                                  15.2                             4.2
     Kyrgyz Republic                          2.7                              1.5
     Azerbaijan                               1.7                              0.6
     Armenia                                  0.1                              3.9

Source: World Bank.




                             RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP           32
Table 6. Exporters Likely to Lose the Most from Kazakhstan’s Adoption of the CET
                                                                                                Percentage drop in
                                                                                               Kazakh Import Value
                            Change in Import Value             Percentage in Total 2008       Explained by Decrease in
     Partner                   (US$, millions)               Kazakh Imports from Partner       Imports from Partner
     EU-27                                       -346.5                                -4.3                              -34.5
     Of which:
        Germany                                  -103.5                                -4.5                              -10.3
        France                                       -47.7                             -6.5                               -4.7
        Italy                                        -30.5                             -3.1                               -3.0
        Lithuania                                    -29.3                            -10.9                               -2.9
        Poland                                       -23.2                             -5.3                               -2.3
        Finland                                      -18.6                             -3.3                               -1.9
        Austria                                      -14.0                             -4.0                               -1.4
        Hungary                                      -13.3                             -3.3                               -1.3
        Netherlands                                  -13.3                             -2.7                               -1.3
     China                                       -439.3                                -4.7                              -43.7
     United States                                   -48.6                             -5.0                               -4.8
     Turkey                                          -40.5                             -4.6                               -4.0
     United Arab Emirates                            -23.4                             -8.1                               -2.3
     Korea, Rep.                                     -20.8                             -6.1                               -2.1
     Japan                                           -13.1                             -6.9                               -1.3

Source: World Bank.




                                       RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                       33
Table 7. Trade Partners whose Exports to Belarus Are Likely to Rise the Most because of
Belarus Adopting the CET

                            Change in Import Value           Percentage of Total 2008 Belarus
     Partner                   (US$, millions)                    Imports from Partner
     EU-27                          -45.4                                  -0.6
     Of which:
        Poland                       2.66                                  0.2
        Finland                      1.57                                  0.9
        Italy                        1.44                                  0.2
        Lithuania                    1.14                                  0.5
       Austria                       0.99                                  0.5
        Latvia                       0.69                                  0.5
     China                           7.28                                  0.5
     Switzerland                     1.47                                  0.6
     Uzbekistan                      1.38                                  4.6
     Thailand                        0.85                                  1.2
     Indonesia                       0.84                                  1.5
     Malaysia                        0.66                                  0.8
     Taiwan, China                   0.56
     Serbia                          0.40                                  1.7
     Moldova                         0.36                                  0.4

Source: World Bank.




                              RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP           34
Table 8. Trade Partners whose Exports to Belarus Are Likely to Drop the Most Because of
Belarus Adopting the CET
                                                                                             Percentage of Total
                                                                                      Decrease in Belarus Import Values
                          Change in Import Value   Percentage of Total 2008 Belarus       Explained by Changes in
     Partner                 (US$, millions)            Imports from Partner                Imports from Partner
     EU-27                        -45.4                          -0.6                               -19.7
        Of which:
        Germany                   -17.10                         -0.6                               -7.4
        France                    -15.95                         -2.8                               -6.9
        Slovak Republic           -6.40                          -3.6                               -2.8
        United Kingdom            -3.54                          -1.3                               -1.5
        Netherlands               -2.87                          -0.8                               -1.3
        Czech Republic            -2.07                          -0.6                               -0.9
        Spain                     -2.05                          -1.0                               -0.9
     Japan                        -21.95                         -6.7                               -9.5
     Russia                       -11.8                          -0.1                               -5.1
     Brazil                       -6.95                          -4.5                               -3.0
     Korea, Rep.                  -4.00                          -2.1                               -1.7
     Ukraine                      -3.51                          -0.2                               -1.5
     Georgia                      -2.51                         -22.3                               -1.1
     Mexico                       -1.98                          -8.4                               -0.9
     United States                -1.96                          -0.4                               -0.9

Source: World Bank.




                                     RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                     35
Table 9. Largest Decreases in Russian Exports to Belarus and Kazakhstan, by Product at
the HS 2-digit Level, 2012–20
                                                                                                            Change in Value of
                                                                                                              Exports (US$,        Percentage
     Product   Product description                                                                              millions)        Change in Value
       85      Electrical machinery and equipment and parts thereof; sound recorders and reproducers,              -37                -2.7
               television image and sound recorders and reproducers, and parts and accessories of such
               articles
       73      Articles of iron or steel                                                                           -26                -1.8
       39      Plastics and articles thereof                                                                       -23                -2.5
       87      Vehicles other than railway or tramway rolling stock, and parts and accessories thereof             -16                -1.6
       94      Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed                     -14                -5.5
               furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated
               signs, illuminated nameplates and the like; prefabricated buildings
       84      Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof                       -13                -0.6
       33      Essential oils and resinoids; perfumery, cosmetic or toilet preparations                            -11                -6.4
       40      Rubber and articles thereof                                                                         -10                -1.7
       30      Pharmaceutical products                                                                              -9                -5.8
       44      Wood and articles of wood; wood charcoal                                                             -8                -1.8

Source: World Bank.




                                                  RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                    36
Table 10. Trade Partners Likely to See the Largest Decreases in Exports to Belarus
                                      Change in Import Value      Percentage of Total 2012 Belarus
     Partner                             (US$, millions)               Imports from Partner
     Russia                                   -61.3                             -0.2
     Georgia                                   -0.4                             -1.1
     Kazakhstan                                -0.2                             -0.1
     Azerbaijan                               -0.02                             -0.1
     Russia                                   -61.3                             -0.2

Source: World Bank.




                              RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP            37
Table 11. Trade Partners Likely to See the Largest Decreases in Exports to Kazakhstan
                                      Change in Import Value    Percentage of Total 2012 Kazakhstan
     Partner                             (US$, millions)               Imports from Partner
     Russia                                  -150.55                           -0.9
     Belarus                                  -15.98                           -2.4
     Ukraine                                  -14.54                           -0.5
     Kyrgyz Republic                          -4.07                            -1.2
     Uzbekistan                               -2.94                            -0.4
     Georgia                                  -1.08                            -2.2
     Moldova                                  -1.07                            -2.6
     Azerbaijan                               -0.61                            -1.5
     Tajikistan                               -0.07                            -0.1
     Macedonia, FYR                           -0.06                            -3.0
     Mauritania                               -0.03                            -4.1
     Tanzania                                 -0.02                            -0.8
     Mozambique                               -0.02                            -1.0
     Armenia                                  -0.02                            -0.6
     Turkmenistan                             -0.01                            -0.0

Source: World Bank.




                             RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP            38
Table 12. Trade Partners Likely to See the Largest Increases in Exports to Belarus
                                                                                        Percentage of Increase in
                                                             Percentage of Total 2012    Belarus Import Value
                              Change in Import Value             Belarus Imports        Explained by Increase in
     Partner                     (US$, millions)                  from Partner           Imports from Partner
     EU-27*                           127.1                            1.4                        79.1
     Of which:
        Poland                         40.1                            3.0                        24.9
        Germany                        30.5                            1.1                        19.0
        Lithuania                      20.1                            5.4                        12.5
        Czech Republic                 5.8                             1.3                         3.6
        Netherlands                    5.1                             1.1                         3.2
        Belgium                        4.1                             1.3                         2.6
       Hungary                         3.7                             2.7                         2.3
        Latvia                         3.5                             2.4                         2.2
        France                         3.0                             0.7                         1.9
        Slovak Republic                2.4                             1.8                         1.5
     China                             16.4                            0.7                        10.2
     Turkey                            6.0                             1.8                         3.8
     Hong Kong, China                  2.3                            164.8                        1.4
     Brazil                            2.3                             1.5                         1.4
     Serbia                            1.9                             2.6                         1.2
*No data on trade with Belarus were available for Austria, Denmark, and Italy.
Source: World Bank.




                                         RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                39
Table 13. Trade Partners Likely to See the Largest Increases in Exports to Kazakhstan
                                                                                Percentage of Increase in
                                                     Percentage of Total 2012   Kazakhstan Import Value
                         Change in Import Value        Kazakhstan Imports       Explained by Increase in
     Partner                (US$, millions)               from partner           Imports from Partner
     EU-27                       173.02                        2.3                        73.5
     Of which:
        Germany                  44.76                         2.0                        19.0
        Italy                    29.39                         3.1                        12.5
        Poland                   16.43                         3.5                         7.0
        France                   15.39                         2.6                         6.5
        United Kingdom           11.25                         1.9                         4.8
        Netherlands               7.02                         2.5                         3.0
        Republic                  4.88                         2.0                         2.1
        Sweden                    4.62                         1.8                         2.0
     China                       140.99                        1.9                        59.9
     United States               36.22                         1.7                        15.4
     Turkey                      21.87                         2.8                         9.3
     Korea, Rep.                 20.02                         2.1                         8.5
     India                        8.3                          2.5                         3.5
     Brazil                       7.04                         2.4                         3.0
     Japan                        6.18                         0.7                         2.6

Source: World Bank.




                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP            40
     Table 14. NTM Frequency and Coverage Ratios for Russia, Percent
                                                                                                                                                Non-automatic
                                                                                                                                              Licensing, Quotas,         Price-control
                                                                     Sanitary and                                      Pre-Shipment         Prohibitions, and Other   Measures, Including
                                                                    Phytosanitary          Technical Barriers to    Inspection and other       Quantity Control       Additional Taxes and
                                                 All NTMs             Measures                    Trade                 Formalities               Measures                  Charges

          Sector                                Freq         Cov    Freq            Cov        Freq          Cov        Freq         Cov         Freq          Cov        Freq         Cov
          01-05 Animal & Animal Products         95.8        95.1    95.8           95.1       82.7          90.2       95.8         95.1        95.8          95.1       95.8         95.1
          06-15 Vegetable Products               96.5        92.9    95.8           92.9       74.3          84.0       96.5         92.9        14.1           8.2       96.5         92.9
          16-24 Foodstuffs                       95.5        97.0    95.5           97.0       76.7          86.6       95.5         97.0        14.0          33.4       95.5         97.0
          25-26 Mineral Products                 94.6        99.0    68.2           90.0        4.2           6.4       94.6         99.0        20.8           3.9       94.6         99.0
          27 Oil Minerals                        97.7        52.0     2.7            0.0       26.8           7.6       97.7         52.0        22.0           0.7       97.7         52.0
          28-38 Chemicals & Allied Industries    96.3        97.0    63.0           74.6       81.1          88.7       96.3         97.0        75.7          76.8       96.3         97.0
          39-40 Plastics / Rubbers               94.2        95.1    26.4           29.4       23.9          33.8       94.2         95.1        16.4          18.2       94.2         95.1
          41-43 Raw Hides, Skins, Leather &      80.2        94.6    60.5           33.7       64.6          89.3       80.2         94.6        49.4           2.0       80.2         94.6
          Furs
          44-49 Wood & Wood Products             88.1        65.1    48.2           23.1       23.5          41.0       88.1         65.1         8.1           7.6       88.1         65.1
          50-63 Textiles                         95.5        91.2    44.6           22.6       95.5          91.2       95.5         91.2         7.6           2.8       95.5         91.2
          64-67 Footwear / Headgear             100.0       100.0     0.0            0.0       69.4          97.6      100.0        100.0         2.0           0.4      100.0        100.0
          68-71 Stone / Glass                    92.5        89.5    11.1            9.1       50.2          35.1       92.5         89.5        33.2           7.8       92.5         89.5
          72-83 Metals                           95.9        95.5     3.3            9.8       20.9          33.3       95.9         95.5        11.1           9.1       95.9         95.5
          84-85 Machinery / Electrical           94.3        79.8     0.4            0.8       94.3          79.8       94.3         79.8        42.8          42.9       94.3         79.8
          86-89 Transportation                   98.5        98.7     2.7            2.0       66.1          83.6       98.5         98.7        11.0           0.0       98.5         98.7
          90-97 Miscellaneous                    96.0        90.4     1.2            0.3       52.0          69.4       96.0         90.4        12.1           9.1       96.0         90.4
     Source: UNCTAD.
     Note: “Freq” denotes the frequency ratio—the percentage of tariff lines covered by an NTM. “Cov” denotes the coverage ratio—the share of imports by value
     covered by NTMs. The most recent UNCTAD data for Russia are for 2009, compared with 2012 for Kazakhstan and the EU. Since country NTM profiles change slowly, and
     since countries are more likely to add NTMs than drop them, these data are likely to still be useful. Import data used for the coverage ratio represent mirror data
     averaged over 2008, 2009, and 2010, as reported by Russia’s trading partners. Often there are multiple NTMs for the same product, even within categories (e.g.,
     multiple SPS or TBT measures).




41                                                                                                 RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                           41
Annexes

ANNEX A: LIST OF DEVELOPING AND LEAST DEVELOPED COUNTRIES ELIGBLE FOR THE
ECU GENERALIZED SYSTEM OF PREFERENCES

     Eligible Developing Countries
     1. Albania                                     36.   Fiji                   71. Oman
     2. Algeria                                     37.   Gabon                  72. Pakistan
     3. Anguilla                                    38.   Ghana                  73. Panama
     4. Antigua and Barbuda                         39.   Grenada                74. Papua New Guinea
     5. Argentina                                   40.   Guatemala              75. Paraguay
     6. Aruba                                       41.   Guyana                 76. Philippines
     7. Bahamas Islands                             42.   Honduras               77. Qatar
     8. Bahrain                                     43.   Hong Kong              78. Saint Lucia
     9. Barbados                                    44.   India                  79. Saudi Arabia
     10. Belize                                     45.   Indonesia              80. Serbia
     11. Bermuda Islands                            46.   Iran                   81. Seychelles
     12. Bolivia                                    47.   Iraq                   82. Singapore
     13. Bosnia and Herzegovina                     48.   Jamaica                83. South Africa
     14. Botswana                                   49.   Jordan                 84. South Korea
     15. Brazil                                     50.   Kenya                  85. Sri Lanka
     16. British Virgin Islands                     51.   Korea                  86. St. Helena Island
     17. Brunei                                     52.   Kuwait                 87. St. Kitts and Nevis
     18. Cameroon                                   53.   Lebanon                88. St. Vincent and the Grenadines
     19. Cape Verde                                 54.   Libya                  89. Suriname
     20. Cayman Islands                             55.   Macedonia              90. Swaziland
     21. Chile                                      56.   Malaysia               91. Syria
     22. China                                      57.   Marshall Islands       92. Thailand
     23. Colombia                                   58.   Mauritius              93. Tokelau
     24. Congo                                      59.   Mexican                94. Tonga
     25. Cook Island                                60.   Micronesia FS          95. Trinidad and Tobago
     26. Costa Rica                                 61.   Mongolia               96. Tunisia
     27. Côte d'Ivoire                              62.   Montenegro             97. Turkey
     28. Croatia                                    63.   Montserrat             98. Turks and Caicos Is.
     29. Cuba                                       64.   Morocco                99. United Arab Emirates
     30. Dominica                                   65.   Namibia                100. Uruguay
     31. Dominican Republic                         66.   Nauru                  101. Venezuela
     32. Ecuador                                    67.   Netherlands Antilles   102. Vietnam
     33. Egypt                                      68.   Nicaragua              103. Zimbabwe
     34. El Salvador                                69.   Nigeria
     35. Feather                                    70.   Niue
Source: UNCTAD TRAINS Database.




     Eligible Least Developed Countries (duty-free access)
     1.    Afghanistan                              18.   Haiti                  35.   Saô Tomé and Prìncipe
     2.    Angola                                   19.   Kiribati               36.   Senegal
     3.    Bangladesh                               20.   Laos                   37.   Sierra Leone
     4.    Bhutan                                   21.   Lesotho                38.   Solomon Islands
     5.    Burkina Faso                             22.   Liberia                39.   Somalia
     6.    Burundi                                  23.   Madagascar             40.   Sudan
     7.    Cambodia                                 24.   Malawi                 41.   Tanzania
     8.    Central African Rep.                     25.   Maldives               42.   Timor-Leste
     9.    Chad                                     26.   Mali                   43.   Togo
     10.   Dem. Rep. of Congo                       27.   Mauritania             44.   Tuvalu
     11.   Djibouti                                 28.   Mozambique             45.   Uganda
     12.   Equatorial Guinea                        29.   Myanmar                46.   Union of Comoros
     13.   Eritrea                                  30.   Nepal                  47.   Vanuatu
     14.   Ethiopia                                 31.   Niger                  48.   Yemen
     15.   Gambia                                   32.   Republic of Benin      49.   Zambia
     16.   Guinea                                   33.   Ruanda
     17.   Guinea-Bissau                            34.   Samoa
Source: UNCTAD TRAINS Database.




                                                 RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP              42
ANNEX B: SMART METHODOLOGY


SMART is a partial equilibrium modeling tool, which means that the analysis considers the effects of a
given policy only in the market that is directly affected. The main advantage of the partial equilibrium
approach is its minimal data requirements. The only data required to measure trade impacts are the trade
policy (tariffs) and a few behavioral parameters, such as the import demand elasticity, elasticity of
substitution, and supply elasticity.

SMART focuses on one importing market and its exporting partners. It assesses the impact of a tariff
change by estimating new values for trade flows. SMART is set up so that, for a given good, different
countries compete to export to a given market. The focus of the simulation exercise is on the composition
and volume of that market’s imports. Export supply of a given product by a given source country is
assumed to be related to the price that it fetches in the importing market. The degree of responsiveness of
the export supply to changes in the price is given by the export supply elasticity, which is assumed to be
infinite (the price-taker assumption).

SMART relies on the Armington assumption to model the behavior of the consumer. In other words,
there is imperfect substitution between different source countries.

SMART reports the results of a trade policy shock on trade flows (i.e., imports from different sources). It
also decomposes those trade effects into trade creation and trade diversion.




                                    RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP       43
     ANNEX C: ADDITIONAL RESULTS


     Table C1. Countries Likely to See the Largest Changes in Exports to Russia by 2020, Top 20 Products
     at HS 6-digit Level

                                                                                                                                                                       Country with Largest Increase in Country with Largest Decrease in
      Product   Product Description                                                                                                                                            Import Value                      Import Value
      300490    Other medicaments (excluding goods of heading 30.02, 30.05 or 30.06) consisting of mixed or unmixed products for                                       Germany                           Belarus
                therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration         Change in import value                          55,190.00                          -4,349.00
                systems) or in forms or packing                                                                                                 Import value in 2008                      1,648,226.00                           45,261.51
                                                                                                                                            % Change in import value                                3.35                             -9.61
      20329     Other meat of swine, fresh, chilled or frozen.                                                                                                         Canada                            Ukraine
                                                                                                                                              Change in import value                              52514                         -24,038.00
                                                                                                                                                Import value in 2008                         463,481.50                          84,870.66
                                                                                                                                            % Change in import value                               11.33                            -28.32
      880240    Aeroplanes and other aircraft, of an unladen weight exceeding 15,000 kg                                                                                France                            Armenia
                                                                                                                                              Change in import value                          90,777.00                          -2,243.00
                                                                                                                                                Import value in 2008                      2,279,367.00                           19,895.42
                                                                                                                                            % Change in import value                                3.98                            -11.27
      852990    Other parts suitable for use solely or principally with the apparatus of headings 85.25 to 85.28.                                                      China                             Ukraine
                                                                                                                                              Change in import value                          51,823.00                            -349.00
                                                                                                                                                Import value in 2008                      1,226,992.00                            2,705.90
                                                                                                                                            % Change in import value                                4.22                            -12.90
      851712    Telephones for cellular networks or for other wireless networks                                                                                        China                             Belarus
                                                                                                                                              Change in import value                          49,056.00                               0.00
                                                                                                                                                Import value in 2008                      2,019,985.00                                0.78
                                                                                                                                            % Change in import value                                2.43                              0.00
      401110    Of a kind used on motor cars (including station wagons and racing cars)                                                                                Japan                             Belarus
                                                                                                                                              Change in import value                          23,391.00                          -5,026.00
                                                                                                                                                Import value in 2008                         415,781.70                          35,402.20
                                                                                                                                            % Change in import value                                5.63                            -14.20
      392690    Other articles of plastics and articles of other materials of headings 39.01 to 39.14.                                                                 China                             Ukraine
                                                                                                                                              Change in import value                          14,368.00                          -1,815.00
                                                                                                                                                Import value in 2008                         259,128.40                          11,908.32
                                                                                                                                            % Change in import value                                5.54                            -15.24
      80810     Apples                                                                                                                                                 Poland                            Moldova
                                                                                                                                              Change in import value                          31,895.00                         -10,049.00
                                                                                                                                                Import value in 2008                         327,693.30                          53,545.63
                                                                                                                                            % Change in import value                                9.73                            -18.77
      851762    Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including                                      China                             Ukraine
                switching and routing apparatus                                                                                               Change in import value                          21,347.00                            -239.00
                                                                                                                                                Import value in 2008                         870,744.40                           3,281.00
                                                                                                                                            % Change in import value                                2.45                             -7.28
      640299    Other footwear with outer soles and uppers of rubber or plastics.                                                                                      China                             Ukraine
                                                                                                                                              Change in import value                          37,374.00                            -215.00
                                                                                                                                                Import value in 2008                         704,225.50                           1,371.55
                                                                                                                                            % Change in import value                                5.31                            -15.68

                                                                                                                                                                                                               (continued on next page)



44                                                                                                                                      RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                         44
                                                                                                                                                                       Country with Largest Increase in Country with Largest Decrease in
      Product   Product Description                                                                                                                                            Import Value                        Import Value
      940360    Other wooden furniture                                                                                                                                 China                            Belarus
                                                                                                                                              Change in import value                          13,438.00                          -8,608.00
                                                                                                                                                Import value in 2008                         146,248.60                          52,662.09
                                                                                                                                            % Change in import value                               9.19                             -16.35
       850440   Static converters                                                                                                                                      China                            Kazakhstan
                                                                                                                                              Change in import value                          19,528.00                         -19,893.00
                                                                                                                                                Import value in 2008                         303,136.60                         221,749.70
                                                                                                                                            % Change in import value                              6.44                               -8.97
       80830    Pears                                                                                                                                                  Belgium                           Belarus
                                                                                                                                              Change in import value                         10,153.00                                0.00
                                                                                                                                                Import value in 2008                        141,622.10                            2,498.54
                                                                                                                                            % Change in import value                              7.17                                0.00
       950300   Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ("scale")                                  China                             Belarus
                models and similar recreational models, working or not; puzzles of all kinds.                                                 Change in import value                         29,929.00                           -4,023.00
                                                                                                                                                Import value in 2008                        934,350.90                           55,951.01
                                                                                                                                            % Change in import value                              3.20                               -7.19
       330499   Other beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including                                     France                            Belarus
                sunscreen or sun tan preparations; manicure or pedicure preparations.                                                         Change in import value                          9,893.00                           -1,838.00
                                                                                                                                                Import value in 2008                        224,295.10                           16,040.97
                                                                                                                                            % Change in import value                              4.41                              -11.46
       852872   Other color monitors and projectors, not incorporating television reception apparatus; reception apparatus for                                         Hungary                           Belarus
                television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing                 Change in import value                         10,785.00                          -19,890.00
                apparatus.                                                                                                                      Import value in 2008                         99,757.77                          144,956.50
                                                                                                                                            % Change in import value                             10.81                              -13.72
       870120   Road tractors for semi-trailers                                                                                                                        Netherlands                       Belarus
                                                                                                                                              Change in import value                         10,945.00                           -3,463.00
                                                                                                                                                Import value in 2008                        716,175.40                           94,106.72
                                                                                                                                            % Change in import value                              1.53                               -3.68
       330300   Perfumes and toilet waters.                                                                                                                            France                            Belarus
                                                                                                                                              Change in import value                         18,613.00                           -5,530.00
                                                                                                                                                Import value in 2008                        378,971.80                           50,324.80
                                                                                                                                            % Change in import value                              4.91                              -10.99
       640291   Other footwear with outer soles and uppers of rubber or plastics, covering the ankle.                                                                  China                             Kazakhstan
                                                                                                                                              Change in import value                         22,574.00                             -986.00
                                                                                                                                                Import value in 2008                        437,397.20                            6,763.98
                                                                                                                                            % Change in import value                              5.16                              -14.58
       730890   Other structures (excluding prefabricated buildings of heading 94.06) and parts of structures (for example, bridges                                    Germany                           Ukraine
                and bridge-sections, lock-gates, towers, lattice masts, roofs, roofing frame-works, doors and windows and their               Change in import value                          9,939.00                           -8,397.00
                frames and thresholds for doors                                                                                                 Import value in 2008                        170,398.90                          100,947.20
                                                                                                                                            % Change in import value                              5.83                               -8.32

     Source: World Bank.




45                                                                                                                                      RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                         45
     Table C2. Countries Likely to See the Largest Changes in Exports to Belarus, Top 20 Products for which Belarus Imports
     Increased Most as a Result of Adopting the ECU CET (HS-6)
                                                                                                                               Increase in Import Value                               Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                          in Import Value                   Import Value
      871639    Trailers & semi-trailers for the transport of goods (excl. of 8716.10-8716.31)                                           3,653                                       Germany                        Russian Federation
                                                                                                                                                            Change in import value                            4,090                              -979
                                                                                                                                                              Import value in 2008                           51,832                             6,650
                                                                                                                                                          % Change in import value                             7.89                            -14.72
      400122    Technically spec. natural rubber (TSNR)                                                                                 1,773                                        Indonesia                      N/A
                                                                                                                                                            Change in import value                              617
                                                                                                                                                              Import value in 2008                           25,440
                                                                                                                                                          % Change in import value                             2.43
      840820    Compression-ignition internal combustion piston engines (diesel/semi-diesel engines) of a kind used for the             1,641                                        Germany                        Russian Federation
                propulsion of vehicles of Ch.87                                                                                                             Change in import value   1,911                          -3,177
                                                                                                                                                              Import value in 2008   51,146                         233,358
                                                                                                                                                          % Change in import value   3.74                           -1.36
      848180    Taps, cocks, valves & similar appliances for pipes/boiler shells/tanks/vats/the like, incl. thermostatically            1,494                                        Germany                        Russian Federation
                controlled valves, n.e.s. in 84.81                                                                                                          Change in import value                              765                            -1,657
                                                                                                                                                              Import value in 2008                           18,009                           55,503
                                                                                                                                                          % Change in import value                             4.25                             -2.99
      830242    Mountings, fittings, & similar articles suit. for furniture, of base metal (excl. of 8302.10 & 8310.20)                 1,147                                        Poland                         Russian Federation
                                                                                                                                                            Change in import value   516                            -174
                                                                                                                                                              Import value in 2008   9,676                          1,285
                                                                                                                                                          % Change in import value   5.33                           -13.55
      848120    Valves for oleohydraulic/pneumatic transmissions for pipes/boiler shells/tanks/vats/the like                            1,076                                        Italy                          Russian Federation
                                                                                                                                                            Change in import value                              612                              -138
                                                                                                                                                              Import value in 2008                           11,033                             1,129
                                                                                                                                                          % Change in import value                             5.55                            -12.22
      843290    Parts of the agricultural/horticultural/forestry machinery of 84.32                                                     1,041                                        Germany                        Russian Federation
                                                                                                                                                            Change in import value                              670                               -46
                                                                                                                                                              Import value in 2008                           25,852                               649
                                                                                                                                                          % Change in import value                             2.59                             -7.09
      841510    Window/wall type air-conditioning machines, self-contained/split-system, comprising a motor-driven fan &                 977                                         China                          Russian Federation
                elements for changing the temp. & humidity, including those machines in which the humidity cannot be                                        Change in import value                              298                               -11
                separately regulated                                                                                                                          Import value in 2008                            4,430                                53
                                                                                                                                                          % Change in import value                             6.73                            -20.72
      901812    Ultrasonic scanning apparatus                                                                                            857                                         United States                  Russian Federation
                                                                                                                                                            Change in import value                              260                               -15
                                                                                                                                                              Import value in 2008                           10,500                               211
                                                                                                                                                          % Change in import value                             2.48                             -7.10
      390319    Polystyrene other than expansible, in primary forms                                                                      806                                         Belgium                        Russian Federation
                                                                                                                                                            Change in import value                              963                            -1,140
                                                                                                                                                              Import value in 2008                           10,267                           22,109
                                                                                                                                                          % Change in import value                             9.38                             -5.16
      841221    Linear acting (cylinders) hydraulic power engines & motors                                                               790                                         Germany                        Russian Federation
                                                                                                                                                            Change in import value                              763                              -956
                                                                                                                                                              Import value in 2008                            7,435                           12,231
                                                                                                                                                          % Change in import value                            10.26                             -7.82

                                                                                                                                                                                                             (continued on next page)




46                                                                                                                                        RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                     46
                                                                                                                               Increase in Import Value                            Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                      in Import Value                    Import Value
      848210    Ball bearings                                                                                                             786                                      China                         Russian Federation
                                                                                                                                                            Change in import value                           955                             -527
                                                                                                                                                              Import value in 2008                        16,799                           10,728
                                                                                                                                                          % Change in import value                         5.68                               -4.91
      901890    Instruments & appliances used in medical/surgical/veterinary sciences, incl. other electro-medical apparatus             724                                         Germany                      Russian Federation
                & sight-testing instr., n.e.s. in 90.18                                                                                                     Change in import value                         288                                -110
                                                                                                                                                              Import value in 2008                      22,691                               3,670
                                                                                                                                                          % Change in import value                        1.27                               -3.00
      830210    Hinges of base metal                                                                                                     714                                         Germany                      Russian Federation
                                                                                                                                                            Change in import value                         207                                 -68
                                                                                                                                                              Import value in 2008                       2,849                                337
                                                                                                                                                          % Change in import value                        7.27                              -20.15
      300210    Antisera & other blood fractions & modified immunological products, whether/not obt. by means of                         695                                         United States                Russian Federation
                biotechnological processes                                                                                                                  Change in import value                         282                                -241
                                                                                                                                                              Import value in 2008                       8,705                               4,004
                                                                                                                                                          % Change in import value                        3.24                               -6.02
      640399    Other footwear without outer soles of leather, not covering the ankle.                                                   661                                         China                     Russian Federation / Ukraine
                                                                                                                                                            Change in import value                         708                        -105 / -105
                                                                                                                                                              Import value in 2008                      16,888                     1262.8 / 1269.2
                                                                                                                                                          % Change in import value                        4.19                          -8.3 / -8.3
      845229    Sewing machines (excl. h-hold. type; excl. book-sewing machines of 84.40), other than auto. units                        654                                         Japan                     Russian Federation
                                                                                                                                                            Change in import value                         271                                   -4
                                                                                                                                                              Import value in 2008                       5,789                                   30
                                                                                                                                                          % Change in import value                        4.68                               -13.47
      732690    Articles of iron/steel, n.e.s.                                                                                           654                                         Germany                   Russian Federation
                                                                                                                                                            Change in import value                         378                                 -534
                                                                                                                                                              Import value in 2008                      20,899                              30,221
                                                                                                                                                          % Change in import value                        1.81                                -1.77
      850940    Food grinders & mixers; fruit/vegetable juice extractors, domestic, with self-contained electric motor                   605                                         China                     Russian Federation
                                                                                                                                                            Change in import value                         284                                  -85
                                                                                                                                                              Import value in 2008                       5,624                                  672
                                                                                                                                                          % Change in import value                        5.05                               -12.64
      294190    Antibiotics & their derivatives (excl. of 2941.10-2941.50); salts thereof                                                561                                         China                     Russian Federation
                                                                                                                                                            Change in import value                         448                                   -3
                                                                                                                                                              Import value in 2008                      11,363                                   26
                                                                                                                                                          % Change in import value                        3.94                               -11.63

     Source: World Bank.




47                                                                                                                                        RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                      47
     Table C3. Countries Likely to See the Largest Changes in Exports to Belarus, Top 20 Products for Which Belarus imports
     Declined Most as a Result of Adopting the ECU CET (HS 6)
                                                                                                                             Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                              (US$, thousands)                                          in Import Value                   Import Value
      870323    Vehicles (excl. of 87.02 & 8703.10) principally designed for the transport of persons, with spark-ignition            -46,129                                      Russian Federation             Japan
                internal combustion reciprocating piston engine, of a cylinder capacity >1500cc but not >3000cc                                           Change in import value                           10,716                          -17,603
                                                                                                                                                            Import value in 2008                           33,394                           85,011
                                                                                                                                                        % Change in import value                            32.09                           -20.71
      870332    Vehicles principally designed for the transport of persons (excl. of 87.02 & 8703.10-8703.24), with C-I              -33,662                                       Russian Federation             Germany
                internal combustion piston engine (diesel/semi-diesel), of a cylinder capacity >1500cc but not >2500cc                                    Change in import value                              201                          -15,089
                                                                                                                                                            Import value in 2008                              795                         139,991
                                                                                                                                                        % Change in import value                            25.29                           -10.78
      170111    Cane sugar, raw, in solid form, not containing added flavoring/coloring matter                                        -9,298                                       N/A                            Brazil
                                                                                                                                                          Change in import value                                  -7,817
                                                                                                                                                            Import value in 2008                                  71,593
                                                                                                                                                        % Change in import value                                  -10.92
      870333    Vehicles principally designed for the transport of persons (excl. of 87.02 & 8703.10-8703.24), with C-I               -7,294                                       Russian Federation             Slovak Republic
                internal combustion piston engine (diesel/semi-diesel), of a cylinder capacity >2500cc                                                    Change in import value                                9                           -2,375
                                                                                                                                                            Import value in 2008                               32                           19,163
                                                                                                                                                        % Change in import value                            27.95                           -12.39
      870324    Vehicles (excl. of 87.02 & 8703.10) principally designed for the transport of persons, with spark-ignition            -7,088                                       N/A                            Japan
                internal combustion reciprocating piston engine, of a cylinder capacity >3000cc                                                           Change in import value                                  -2,399
                                                                                                                                                            Import value in 2008                                  18,702
                                                                                                                                                        % Change in import value                                  -12.83
      870322    Vehicles (excl. of 87.02 & 8703.10) principally designed for the transport of persons, with spark-ignition            -6,834                                       Uzbekistan                     Japan
                internal combustion reciprocating piston engine, of a cylinder capacity >1000cc but not >1500cc                                           Change in import value                              197                           -1,162
                                                                                                                                                            Import value in 2008                              844                           11,047
                                                                                                                                                        % Change in import value                            23.35                           -10.52
      852872    Other color reception apparatus for television, whether/not incorporating radio-broadcast                             -3,623                                       Russian Federation             China
                receivers/sound/video recording/reproducing apparatus,                                                                                    Change in import value                            1,300                           -1,146
                                                                                                                                                            Import value in 2008                            6,093                            7,782
                                                                                                                                                        % Change in import value                            21.34                           -14.73
      20311     Carcasses/half-carcasses of swine, fresh/chilled                                                                      -2,918                                       N/A                            Netherlands
                                                                                                                                                          Change in import value                                                            -1,281
                                                                                                                                                            Import value in 2008                                                            20,602
                                                                                                                                                        % Change in import value                                                             -6.22
      870120    Road tractors for semi-trailers (excl. of 87.09)                                                                      -2,803                                       Russian Federation             Netherlands
                                                                                                                                                          Change in import value                              118                             -915
                                                                                                                                                            Import value in 2008                            2,858                           56,712
                                                                                                                                                        % Change in import value                             4.13                            -1.61
      852851    Other monitors, of a kind solely/principally used in an automatic data processing system of heading 84.71             -2,602                                       Russian Federation             China
                                                                                                                                                          Change in import value                                7                           -2,196
                                                                                                                                                            Import value in 2008                               54                           42,944
                                                                                                                                                        % Change in import value                            12.94                            -5.11
      870421    Motor vehicles for the transport of goods (excl. of 8704.10), with C-I internal combustion piston engine              -1,952                                       Russian Federation             Germany
                (diesel/semi-diesel), g.v.w. not >5tonnes                                                                                                 Change in import value                              159                           -1,066
                                                                                                                                                            Import value in 2008                            2,066                           32,944
                                                                                                                                                        % Change in import value                             7.70                            -3.24

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48                                                                                                                                      RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                    48
                                                                                                                          Increase in Import Value                            Country with Largest Increase Country withllargest Decrease in
      Product   Product Description                                                                                           (US$, thousands)                                        in Import Value                Import Value
      392690    Articles of plastics & articles of other materials of headings 39.01 to 39.14, n.e.s. in Ch 39                      -1,768                                    Russian Federation             Germany
                                                                                                                                                       Change in import value                            933                             -920
                                                                                                                                                         Import value in 2008                         14,930                           19,540
                                                                                                                                                     % Change in import value                          6.25                             -4.71
      841950    Heat exchange units, whether/not electrically heated                                                               -1,527                                       Russian Federation            Italy
                                                                                                                                                       Change in import value                         1,674                           -1,266
                                                                                                                                                         Import value in 2008                        31,870                           13,760
                                                                                                                                                     % Change in import value                          5.25                            -9.20
       20321    Carcasses/half-carcasses of swine, frozen                                                                          -1,424                                       Russian Federation            Poland
                                                                                                                                                       Change in import value                            10                             -706
                                                                                                                                                         Import value in 2008                            84                           11,585
                                                                                                                                                     % Change in import value                         11.93                            -6.09
      870331    Vehicles principally designed for the transport of persons (excl. of 87.02 & 8703.10-8703.24), with C-I            -1,254                                       Russian Federation            Spain
                internal combustion piston engine (diesel/semi-diesel), of a cylinder capacity not >1500cc                                             Change in import value                             1                              -404
                                                                                                                                                         Import value in 2008                             6                             3,098
                                                                                                                                                     % Change in import value                         15.87                            -13.04
      210390    Sauces & preparations therefor, n.e.s.; mixed condiments & mixed seasonings, n.e.s.                                -1,214                                       Russian Federation            Germany
                                                                                                                                                       Change in import value                         1,581                              -722
                                                                                                                                                         Import value in 2008                        19,653                             3,667
                                                                                                                                                     % Change in import value                          8.04                            -19.69
       20319    Meat of swine (excl. carcasses/half-carcasses/hams/shoulders & cuts thereof), fresh/chilled                        -1,039                                       N/A                           Netherlands
                                                                                                                                                       Change in import value                                                            -548
                                                                                                                                                         Import value in 2008                                                           7,800
                                                                                                                                                     % Change in import value                                                           -7.03
      851762    Machines for the reception, conversion & transmission/regeneration of voice, images/other data, incl.              -959                                         Russian Federation            China
                switching & routing apparatus                                                                                                          Change in import value                            91                             -580
                                                                                                                                                         Import value in 2008                         2,669                           42,620
                                                                                                                                                     % Change in import value                          3.41                            -1.36
       20329    Meat of swine (excl. carcasses/half-carcasses/hams/shoulders & cuts thereof ), frozen                              -952                                         Russian Federation            Germany
                                                                                                                                                       Change in import value                             7                             -387
                                                                                                                                                         Import value in 2008                           160                           18,767
                                                                                                                                                     % Change in import value                          4.36                            -2.06
      300490    Medicaments (excluding goods of heading 30.02/30.05/30.06/3004.10-3004.50) consisting of mixed/unmixed             -898                                         Ukraine                       Germany
                products for therapeutic/prophylactic uses, put up in measured doses (including those in the form of                                   Change in import value                           149                             -213
                transdermal administration systems)/in forms/packi                                                                                       Import value in 2008                        15,402                           42,036
                                                                                                                                                     % Change in import value                          0.97                            -0.51

     Source: World Bank.




49                                                                                                                                   RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                  49
     Table C4. Countries Likely to See the Largest Changes in Exports to Kazakhstan, Top 20 products for which Kazakhstan’s
     imports Increase the Most after Adoption of the ECU CET (with Negotiated Exceptions; HS-6 digit level)

                                                                                                                                    Increase in Import Value                               Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                     (US$, thousands)                                          in Import Value                    Import Value
      830242    Mountings, fittings, & similar articles suit. for furniture, of base metal (excl. of 8302.10 & 8310.20).                    1,540.90                                      China                           Russian Federation
                                                                                                                                                                 Change in import value                          1,485.26                            -74.18
                                                                                                                                                                   Import value in 2008                         49,088.80                            867.47
                                                                                                                                                               % Change in import value                              3.03                             -8.55
      901580    Surveying/hydrographic/ oceanographic /hydrological /meteorological /geophysical instr. & appliances (excl.                 959.12                                        China                           Russian Federation
                compasses), n.e.s. in 90.15.                                                                                                                     Change in import value                            360.45                           -488.59
                                                                                                                                                                   Import value in 2008                          9,819.10                          7,995.54
                                                                                                                                                               % Change in import value                              3.67                             -6.11
      852872    Other color reception apparatus for television, whether/not incorporating radio-broadcast                                   707.51                                        China                           Russian Federation
                receivers/sound/video recording/reproducing apparatus.                                                                                           Change in import value                            285.03                            -15.65
                                                                                                                                                                   Import value in 2008                         28,068.40                            630.54
                                                                                                                                                               % Change in import value                              1.02                             -2.48
      940171    Seats (excl. of 9401.10-9401.50 & 94.02), with metal frames, upholstered.                                                   648.04                                        China                           Russian Federation
                                                                                                                                                                 Change in import value                            680.51                            -72.94
                                                                                                                                                                   Import value in 2008                         22,813.31                            989.53
                                                                                                                                                               % Change in import value                              2.98                             -7.37
      640359    Footwear (excl. waterproof) with outer soles & uppers of leather, other than that covering the ankle (excl. of              613.79                                        Italy                           Russian Federation
                6403.12-6403.51).                                                                                                                                Change in import value                            539.17                             -0.03
                                                                                                                                                                   Import value in 2008                         32,534.60                              0.70
                                                                                                                                                               % Change in import value                              1.66                             -4.85
      848790    Machinery parts, not containing electrical connectors, insulators, coils, contacts/other electrical features, not           583.13                                        UK                              Russian Federation
                specified/incld. elsewhere in this Ch., other than Ships'/boats' propellers & blades therefor.                                                   Change in import value                            479.68                            -10.36
                                                                                                                                                                   Import value in 2008                         22,639.01                            167.47
                                                                                                                                                               % Change in import value                              2.12                             -6.19
      901590    Parts & accessories of the instr. & appliances of 90.15.                                                                    456.12                                        UK                              Russian Federation
                                                                                                                                                                 Change in import value                            216.11                            -62.07
                                                                                                                                                                   Import value in 2008                          7,776.06                            889.95
                                                                                                                                                               % Change in import value                              2.78                             -6.97
      180690    Chocolate & other food preparations containing cocoa (excl. of 1806.20-1806.32).                                            425.00                                        Turkey                          Russian Federation
                                                                                                                                                                 Change in import value                            619.47                           -892.12
                                                                                                                                                                   Import value in 2008                          6,692.58                         33,287.44
                                                                                                                                                               % Change in import value                              9.26                             -2.68
      220210    Waters, incl. mineral waters & aerated waters, containing added sugar/other sweetening matter/flavored.                     383.11                                        Austria                         Russian Federation
                                                                                                                                                                 Change in import value                            545.30                           -202.28
                                                                                                                                                                   Import value in 2008                         11,545.58                          2,732.78
                                                                                                                                                               % Change in import value                              4.72                             -7.40
      630533    Sacks & bags, of a kind used for the packing of goods, of polyethylene/polypropylene strip/the like.                        346.32                                        China                           Russian Federation
                                                                                                                                                                 Change in import value                            380.81                            -21.77
                                                                                                                                                                   Import value in 2008                         31,152.79                            696.97
                                                                                                                                                               % Change in import value                              1.22                             -3.12

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50                                                                                                                                             RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                      50
                                                                                                                               Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                        in Import Value                     Import Value
      901920    Ozone therapy/oxygen therapy/aerosol therapy/artificial respiration/other therapeutic respiration apparatus.             266.20                                      Germany                        Russian Federation
                                                                                                                                                            Change in import value                           315.25                          -208.68
                                                                                                                                                              Import value in 2008                         7,293.00                         3,839.70
                                                                                                                                                          % Change in import value                             4.32                            -5.43
      830210    Hinges of base metal.                                                                                                  252.27                                        China                          Russian Federation
                                                                                                                                                            Change in import value                           173.31                           -22.86
                                                                                                                                                              Import value in 2008                         5,504.48                           269.73
                                                                                                                                                          % Change in import value                            3.15                                 -8.48
      320910    Paints & varnishes (incl. enamels & lacquers) based on acrylic/vinyl polymers.                                         228.60                                        Germany                         Russian Federation
                                                                                                                                                            Change in import value                          173.83                               -245.31
                                                                                                                                                              Import value in 2008                        2,186.00                              4,497.97
                                                                                                                                                          % Change in import value                            7.95                                 -5.45
      848420    Mechanical seals.                                                                                                      206.52                                        UK                              Russian Federation
                                                                                                                                                            Change in import value                          173.63                               -107.26
                                                                                                                                                              Import value in 2008                        4,710.51                              1,765.64
                                                                                                                                                          % Change in import value                            3.69                                 -6.07
      210210    Active yeasts.                                                                                                         190.05                                        Turkey                          Russian Federation
                                                                                                                                                            Change in import value                          277.41                               -142.95
                                                                                                                                                              Import value in 2008                        3,102.81                              1,264.94
                                                                                                                                                          % Change in import value                            8.94                                -11.30
      180632    Chocolate & other food preparations containing cocoa, in blocks/slabs/bars, weighing 2kg/less, not filled.             188.21                                        Turkey                          Russian Federation
                                                                                                                                                            Change in import value                          623.54                               -478.04
                                                                                                                                                              Import value in 2008                        3,782.29                             15,515.80
                                                                                                                                                          % Change in import value                           16.49                                 -3.08
      391723    Tubes, pipes, & hoses, rigid, of polymers of vinyl chloride.                                                           186.60                                        China                           Russian Federation
                                                                                                                                                            Change in import value                          127.41                               -27.38
                                                                                                                                                              Import value in 2008                        9,447.67                               870.24
                                                                                                                                                          % Change in import value                            1.35                                -3.15
      800700    Other articles of tin.                                                                                                 177.96                                        China                           Russian Federation
                                                                                                                                                            Change in import value                          178.62                                -0.96
                                                                                                                                                              Import value in 2008                        8,731.13                                15.96
                                                                                                                                                          % Change in import value                            2.05                                -5.99
      180631    Chocolate & other food preparations containing cocoa, in blocks/slabs/bars, weighing 2kg/less, filled.                 177.39                                        Germany                         Russian Federation
                                                                                                                                                            Change in import value                          576.50                               -516.66
                                                                                                                                                              Import value in 2008                        3,509.00                             41,083.14
                                                                                                                                                          % Change in import value                           16.43                                 -1.26
      640399    Other footwear without outer soles of leather, not covering the ankle.                                                 160.12                                        China                           Russian Federation
                                                                                                                                                            Change in import value                           81.80                                -8.65
                                                                                                                                                              Import value in 2008                       16,228.41                               667.85
                                                                                                                                                          % Change in import value                            0.50                                -1.29

     Source: World Bank.




51                                                                                                                                        RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                         51
     Table C5. Countries Likely to See the Largest Changes in Exports to Kazakhstan, Top 20 Products for Which Kazakhstan’s
     Imports Increase the Most as a Result of adoption of the ECU CET (with Negotiated Exceptions; HS 6-digit level)

                                                                                                                                 Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                  (US$, thousands)                                          in Import Value                    Import Value
      870323    Vehicles (excl. of 87.02 & 8703.10) principally designed for the transport of persons, with spark-ignition              -53,847.00                                     Russian Federation              Lithuania
                internal combustion reciprocating piston engine, of a cylinder capacity >1500cc but not >3000cc.                                              Change in import value                         18,731.41                         -20,464.75
                                                                                                                                                                Import value in 2008                         53,195.54                          75,484.20
                                                                                                                                                            % Change in import value                             35.21                             -27.11
      620329    Men's/boys' ensembles (excl. knitted/crocheted), of other textile materials, other than of synthetic                    -46,006.19                                     Russian Federation              China
                fibres/cotton.                                                                                                                                Change in import value                            161.44                         -45,447.94
                                                                                                                                                                Import value in 2008                            577.06                         383,050.90
                                                                                                                                                            % Change in import value                             27.98                             -11.86
      730519    Line pipe of a kind used for oil/gas pipelines, having circular cross-sections, the external diameter of which          -34,297.63                                     Russian Federation              China
                exceeds 406.4mm (excl. of 7305.11 & 7305.19)                                                                                                  Change in import value                          7,214.57                         -41,498.06
                                                                                                                                                                Import value in 2008                         53,630.77                         705,876.60
                                                                                                                                                            % Change in import value                             13.45                              -5.88
      880260    Spacecraft (incl. satellites) & suborbital & spacecraft launch vehicles                                                 -27,745.94                                     N/A                             France
                                                                                                                                                              Change in import value                                                           -16,928.92
                                                                                                                                                                Import value in 2008                                                           165,969.80
                                                                                                                                                            % Change in import value                                                               -10.20
      610342    Men's/boys' trousers, bib & brace overalls, breeches & shorts (excl. swimwear), knitted/crocheted, of cotton            -25,491.72                                     Kyrgyz Republic                 China
                                                                                                                                                              Change in import value                              1.34                         -25,448.56
                                                                                                                                                                Import value in 2008                              7.06                         337,143.30
                                                                                                                                                            % Change in import value                             18.94                              -7.55
      300490    Medicaments (excluding goods of heading 30.02/30.05/30.06/3004.10-3004.50) consisting of mixed/unmixed                  -17,022.41                                     Russian Federation              Germany
                products for therapeutic/prophylactic uses, put up in measured doses (including those in the form of                                          Change in import value                          3,505.42                          -3,973.85
                transdermal administration systems)/in forms/packi                                                                                              Import value in 2008                         28,317.08                          62,482.00
                                                                                                                                                            % Change in import value                             12.38                              -6.36
      880240    Aeroplanes & other aircraft, of an unladen weight >15000kg                                                              -15,610.48                                     N/A                             France
                                                                                                                                                              Change in import value                                                            -9,738.81
                                                                                                                                                                Import value in 2008                                                           103,435.10
                                                                                                                                                            % Change in import value                                                                -9.42
      610343    Men's/boys' trousers, bib & brace overalls, breeches & shorts (excl. swimwear), knitted/crocheted, of                   -14,595.42                                     Russian Federation              China
                synthetic fibres                                                                                                                              Change in import value   36.77                           -14,631.55
                                                                                                                                                                Import value in 2008                            167.42                         191,681.00
                                                                                                                                                            % Change in import value                             21.96                              -7.63
      870324    Vehicles (excl. of 87.02 & 8703.10) principally designed for the transport of persons, with spark-ignition              -13,336.59                                     Russian Federation              Germany
                internal combustion reciprocating piston engine, of a cylinder capacity >3000cc                                                               Change in import value                            136.69                          -5,627.56
                                                                                                                                                                Import value in 2008                            383.19                          34,702.00
                                                                                                                                                            % Change in import value                             35.67                             -16.22
      610990    T-shirts, singlets & other vests, knitted/crocheted, other than of cotton                                               -11,857.41                                     Russian Federation              China
                                                                                                                                                              Change in import value                             33.61                         -11,682.58
                                                                                                                                                                Import value in 2008                            219.32                         196,983.90
                                                                                                                                                            % Change in import value                             15.32                              -5.93

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52                                                                                                                                          RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                      52
                                                                                                                             Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                              (US$, thousands)                                          in Import Value                Import Value
      851712    Telephones for cellular networks/for other wireless networks, other than Line telephone sets with cordless          -11,548.28                                     Russian Federation             Hungary
                handsets                                                                                                                                  Change in import value                             3.48                        -6,603.86
                                                                                                                                                            Import value in 2008                            48.70                      258,897.00
                                                                                                                                                        % Change in import value                             7.14                            -2.55
      640590    Footwear other than with uppers of leather/composition leather/textile materials, n.e.s.                            -9,574.00                                      Russian Federation             China
                                                                                                                                                          Change in import value                             8.71                       -45,347.94
                                                                                                                                                            Import value in 2008                           181.59                      383,050.90
                                                                                                                                                        % Change in import value                             4.80                           -11.84
      854449    Other electric conductors, for a voltage not > 1,000 V, not fitted with connectors                                  -8,436.36                                      Russian Federation               Turkey
                                                                                                                                                          Change in import value                         8,844.76                        -7,488.60
                                                                                                                                                            Import value in 2008                        67,674.45                        39,410.17
                                                                                                                                                        % Change in import value                            13.07                           -19.00
      611030    Jerseys, pullovers, cardigans, waist-coats & similar articles, knitted/crocheted, of man-made fibres                -8,238.81                                      Russian Federation               China
                                                                                                                                                          Change in import value                           14.22                         -8,016.14
                                                                                                                                                            Import value in 2008                          154.69                        234,513.80
                                                                                                                                                        % Change in import value                            9.19                             -3.42
      711319    Articles of jewelry & parts thereof , of other precious metal (excl. silver), whether/not plated/clad with          -7,275.34                                      Kyrgyz Republiv                  Turkey
                precious metal                                                                                                                            Change in import value                          175.21                         -3,722.45
                                                                                                                                                            Import value in 2008                          969.69                         49,342.46
                                                                                                                                                        % Change in import value                           18.07                             -7.54
      842139    Filtering/purifying machinery & apparatus for gases, other than intake air filters for internal combustion          -6,859.89                                      Russian Federation               Norway
                engines                                                                                                                                   Change in import value                           572.79                        -6,341.61
                                                                                                                                                            Import value in 2008                         6,241.46                       172,070.20
                                                                                                                                                        % Change in import value                             9.18                            -3.69
      870423    Motor vehicles for the transport of goods (excl. of 8704.10), with C-I internal combustion piston engine            -6,739.05                                      Russian Federation               China
                (diesel/semi-diesel), g.v.w. >20tonnes                                                                                                    Change in import value                         3,924.89                       -12,264.34
                                                                                                                                                            Import value in 2008                        32,909.45                        85,645.26
                                                                                                                                                        % Change in import value                            11.93                           -14.32
       20714    Cuts & edible offal of species Gallus domesticus, frozen                                                            -6,253.12                                      Russian Federation               USA
                                                                                                                                                          Change in import value                          164.87                         -5,068.92
                                                                                                                                                            Import value in 2008                          360.88                         19,363.02
                                                                                                                                                        % Change in import value                           45.68                            -26.18
      610910    T-shirts, singlets & other vests, knitted/crocheted, of cotton                                                      -6,109.33                                      Russian Federation               China
                                                                                                                                                          Change in import value                           31.69                         -5,783.14
                                                                                                                                                            Import value in 2008                          296.47                        143,240.20
                                                                                                                                                        % Change in import value                           10.69                             -4.04
      610462    Women's/girls' trousers, bib & brace overalls, breeches & shorts (excl. swimwear), knitted/crocheted, of            -5,711.61                                      Russian Federation               China
                cotton                                                                                                                                    Change in import value                            5.09                         -5,668.81
                                                                                                                                                            Import value in 2008                           33.27                         95,929.07
                                                                                                                                                        % Change in import value                           15.29                             -5.91

     Source: World Bank.




53                                                                                                                                      RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                    53
     Table C6. Countries Likely to See the Largest Changes in Exports to Belarus by 2020, Top 20 Products
     (HS 6-digit level)

                                                                                                                               Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                         in Import Value                   Import Value
      300490    Other pharmaceutical products                                                                                            5,808                                       Germany                       Russian Federation
                                                                                                                                                            Change in import value                           1,569                            -1,144
                                                                                                                                                              Import value in 2008                          44,618                           13,996
                                                                                                                                                          % Change in import value                            3.52                             -8.17
      80810     Apples                                                                                                                  4,012                                        Poland                        Russian Federation
                                                                                                                                                            Change in import value                           3,712                               -48
                                                                                                                                                              Import value in 2008                          54,760                             8,801
                                                                                                                                                          % Change in import value                            6.78                             -0.55
      870120    Road tractors for semi-trailers                                                                                         3,240                                        Belgium                       Bulgaria
                                                                                                                                                            Change in import value                             776                                  0
                                                                                                                                                              Import value in 2008                          54,478                                11
                                                                                                                                                          % Change in import value                            1.42                              0.00
      730890    Other structures (excluding prefabricated buildings of heading 94.06) and parts of structures                           3,071                                        China                         Russian Federation
                                                                                                                                                            Change in import value                           2,751                            -2,597
                                                                                                                                                              Import value in 2008                          44,173                           35,625
                                                                                                                                                          % Change in import value                            6.23                             -7.29
      852990    Other parts suitable for use solely or principally with the apparatus of headings 85.25 to 85.28                        2,805                                        Poland                        Russian Federation
                                                                                                                                                            Change in import value                           1,796                              -299
                                                                                                                                                              Import value in 2008                          40,829                             2,554
                                                                                                                                                          % Change in import value                            4.40                            -11.71
      880240    Aeroplanes and other aircraft, of an unladen weight exceeding 15,000 kg                                                 2,201                                        Brazil                        N/A
                                                                                                                                                            Change in import value                           2,201
                                                                                                                                                              Import value in 2008                          55,404
                                                                                                                                                          % Change in import value                            3.97                          #DIV/0!
      851762    Machines for reception, conversion and transission or regeneration of voice, images or other data, including            2,076                                        China                         Russian Federation
                switching and routing apparatus                                                                                                             Change in import value                           1,317                              -546
                                                                                                                                                              Import value in 2008                          43,011                             8,171
                                                                                                                                                          % Change in import value                            3.06                             -6.68
      851712    Telephones for cellular networks or for other wireless networks                                                         1,714                                        China                         Russian Federation
                                                                                                                                                            Change in import value   1,286                         -962
                                                                                                                                                              Import value in 2008                          33,989                           16,079
                                                                                                                                                          % Change in import value                            3.78                             -5.98
      392690    Other plastic and articles thereof                                                                                      1,534                                        Germany                       Russian Federation
                                                                                                                                                            Change in import value                             728                              -952
                                                                                                                                                              Import value in 2008                           8,398                             7,213
                                                                                                                                                          % Change in import value                            8.67                            -13.20
      871639    Other trailers and semi-trailers; other vehicles, not mechanically propelled; parts thereof                             1,176                                        Germany                       Bulgaria
                                                                                                                                                            Change in import value                             738                                  0
                                                                                                                                                              Import value in 2008                          61,245                                14
                                                                                                                                                          % Change in import value                            1.21                              0.00

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                                                                                                                               Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                          in Import Value                   Import Value
      850440    Static converters                                                                                                        1,106                                       Lithuania                      Russian Federation
                                                                                                                                                            Change in import value                              363                            -510
                                                                                                                                                              Import value in 2008                            5,977                           4,625
                                                                                                                                                          % Change in import value                                6                              -11
      830241    Base metal mountings suitable for buildings                                                                             1,027                                        Poland                         Russian Federation
                                                                                                                                                            Change in import value                              931                            -461
                                                                                                                                                              Import value in 2008                           15,161                           4,312
                                                                                                                                                          % Change in import value                            6.14                             -10.69
      210690    Other miscellaneous edible preparations                                                                                 1,006                                        Germany                         Russian Federation
                                                                                                                                                            Change in import value                             763                               -706
                                                                                                                                                              Import value in 2008                          19,006                             13,447
                                                                                                                                                          % Change in import value                            4.01                              -5.25
       80830    Pears                                                                                                                    955                                         Belgium                         Russian Federation
                                                                                                                                                            Change in import value                             306                                 -2
                                                                                                                                                              Import value in 2008                           4,542                                 12
                                                                                                                                                          % Change in import value                            6.74                             -17.03
      441011    Particle board                                                                                                           896                                         Poland                          Russian Federation
                                                                                                                                                            Change in import value                           2,239                             -1,850
                                                                                                                                                              Import value in 2008                          17,331                             40,500
                                                                                                                                                          % Change in import value                           12.92                              -4.57
      300420    Medicaments containing other antibiotics                                                                                 748                                         Lithuania                       Russian Federation
                                                                                                                                                            Change in import value                             333                               -215
                                                                                                                                                              Import value in 2008                           7,692                              2,366
                                                                                                                                                          % Change in import value                            4.33                              -9.09
      390120    Polyethylene having a specific gravity of 0.94 or more                                                                   733                                         Poland                          Russian Federation
                                                                                                                                                            Change in import value                             418                               -828
                                                                                                                                                              Import value in 2008                          12,144                             27,868
                                                                                                                                                          % Change in import value                               3                                 -3
      390210    Polypropylene                                                                                                            729                                         Lithuania                       Russian Federation
                                                                                                                                                            Change in import value                             619                             -1,147
                                                                                                                                                              Import value in 2008                          14,848                             50,078
                                                                                                                                                          % Change in import value                            4.17                              -2.29
      854449    Other insulated wire, cable, and other insulated electric conductors, whether or not fitted with connectors;             717                                         Germany                         Russian Federation
                optical fibre cables, made up of individually sheathed fibres                                                                               Change in import value                             753                             -1,761
                                                                                                                                                              Import value in 2008                           6,448                             74,297
                                                                                                                                                          % Change in import value                           11.68                              -2.37
      940600    Prefabricated buildings                                                                                                  704                                         Poland                          Russian Federation
                                                                                                                                                            Change in import value                             546                             -1,362
                                                                                                                                                              Import value in 2008                           3,969                             22,815
                                                                                                                                                          % Change in import value                           13.76                              -5.97

     Source: World Bank.




55                                                                                                                                        RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                         55
     Table C7. Countries Likely to See the Largest Changes in Exports to Kazakhstan by 2020, Top 20 Products (HS-6 digit level)

                                                                                                                                 Increase in Import Value                              Country with Largest Increase Country with Largest Decrease in
      Product                                                Product Description                                                     (US$, thousands)                                          in Import Value                    Import Value
      300490    Other pharmaceutical products                                                                                              22,814                                      Germany                         Russian Federation
                                                                                                                                                              Change in import value                             7,058                          -4,867
                                                                                                                                                                Import value in 2008                           161,618                         56,316
                                                                                                                                                            % Change in import value                              4.37                           -8.64
      870423    Motor Vehicles for the transport of goods (g.v.w. exceeding 20 tonnes)                                                   10,848                                        China                           Russian Federation
                                                                                                                                                              Change in import value                            18,877                          -7,230
                                                                                                                                                                Import value in 2008                           186,186                         62,088
                                                                                                                                                            % Change in import value                             10.14                          -11.64
      490700    Unused postage, revenue or similar stamps of current or new issue in the country in which they have, or will              8,797                                        United States                   Uzbekistan
                have, a recognised face value; stamp-impressed paper; banknotes; cheque forms; stock, share or bond                                           Change in import value                             8,498                             -26
                certificates and similar documents of title                                                                                                     Import value in 2008                           306,839                             322
                                                                                                                                                            % Change in import value                              2.77                           -8.07
      851712    Telephones for cellular networks or for other wireless networks                                                           8,095                                        China                           Russian Federation
                                                                                                                                                              Change in import value                             3,350                            -452
                                                                                                                                                                Import value in 2008                           130,687                           6,293
                                                                                                                                                            % Change in import value                              2.56                           -7.18
      880240    Aeroplanes and other aircraft, of an unladen weight exceeding 15,000 kg                                                   7,652                                        Brazil                          N/A
                                                                                                                                                              Change in import value                             4,003
                                                                                                                                                                Import value in 2008                           102,922
                                                                                                                                                            % Change in import value                              3.89
      730890    Other structures (excluding prefabricated buildings of heading 94.06) and parts of structures                             7,012                                        China                           Russian Federation
                                                                                                                                                              Change in import value                             3,149                          -4,896
                                                                                                                                                                Import value in 2008                            49,607                         62,285
                                                                                                                                                            % Change in import value                              6.35                           -7.86
      730619    Other tubes, pipes and hollow profiles                                                                                    6,043                                        China                           Ukraine
                                                                                                                                                              Change in import value                             6,790                            -637
                                                                                                                                                                Import value in 2008                           271,739                         10,316
                                                                                                                                                            % Change in import value                              2.50                           -6.17
      852990    Other parts suitable for use solely or principally with the apparatus of headings 85.25 to 85.28                          6,016                                        Korea, Rep.                     Russian Federation
                                                                                                                                                              Change in import value   5,695                           -166
                                                                                                                                                                Import value in 2008                           131,555                           1,305
                                                                                                                                                            % Change in import value                              4.33                          -12.72
      732690    Other articles of iron or steel                                                                                           4,892                                        China                           Russian Federation
                                                                                                                                                              Change in import value                             1,710                          -1,978
                                                                                                                                                                Import value in 2008                            64,209                         44,392
                                                                                                                                                            % Change in import value                              2.66                           -4.46
      854519    Other carbon electrodes, carbon brushes, lamp carbons, battery carbons and other articles of graphite or other            4,732                                        China                           Ukraine
                carbon, with or without metal, of a kind used for electrical purposes                                                                         Change in import value                             4,918                            -202
                                                                                                                                                                Import value in 2008                           175,115                           2,678
                                                                                                                                                            % Change in import value                              2.81                           -7.54
      392690    Other plastic and articles thereof                                                                                        4,662                                        Germany                         Russian Federation
                                                                                                                                                              Change in import value                             1,497                          -2,083
                                                                                                                                                                Import value in 2008                            19,319                         15,698
                                                                                                                                                            % Change in import value                              7.75                          -13.27

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                                                                                                                               Increase in Import Value                            Country with Largest Increase Country with Largest Decrease in
      Product   Product Description                                                                                                (US$, thousands)                                      in Import Value                    Import Value
      851762    Machines for the reception, conversion and transmission or regeneration of voice, images or other data,                  4,660                                     China                         Russian Federation
                including switching and routing apparatus                                                                                                   Change in import value                         3,418                             -543
                                                                                                                                                              Import value in 2008                       114,461                            8,054
                                                                                                                                                          % Change in import value                         2.99                              -6.74
      940360    Other wooden furniture                                                                                                  3,454                                        China                        Russian Federation
                                                                                                                                                            Change in import value                       3,584                              -3,624
                                                                                                                                                              Import value in 2008                      18,574                              49,285
                                                                                                                                                          % Change in import value                       19.30                               -7.35
      850440    Static converters                                                                                                       3,352                                        China                        Russian Federation
                                                                                                                                                            Change in import value                       1,579                              -1,236
                                                                                                                                                              Import value in 2008                      29,845                              12,263
                                                                                                                                                          % Change in import value                        5.29                              -10.08
      401110    New pneumatic tyres, of rubber of a kind used on motor cars (including station wagons and racing cars)                  3,217                                        China                        Russian Federation
                                                                                                                                                            Change in import value                       3,802                              -4,137
                                                                                                                                                              Import value in 2008                      26,356                              65,852
                                                                                                                                                          % Change in import value                       14.43                               -6.28
      870410    Dumpers designed for off-highway use                                                                                    3,152                                        Japan                        Belarus
                                                                                                                                                            Change in import value                       1,211                              -1,297
                                                                                                                                                              Import value in 2008                      13,845                              11,455
                                                                                                                                                          % Change in import value                        8.75                              -11.32
       80810    Apples                                                                                                                  3,128                                        China                        Kyrgyz Republic
                                                                                                                                                            Change in import value                       3,069                              -2,065
                                                                                                                                                              Import value in 2008                      22,575                              13,553
                                                                                                                                                          % Change in import value                       13.59                              -15.24
      880230    Aeroplanes and other aircraft, of an unladen weight exceeding 2,000 kg but not exceeding 15,000kg                       2,878                                        Brazil                       Russian Federation
                                                                                                                                                            Change in import value                       2,580                              -1,492
                                                                                                                                                              Import value in 2008                      61,146                              21,733
                                                                                                                                                          % Change in import value                        4.22                               -6.87
      854449    Other insulated wire, cable, and other insulated electric conductors, whether or not fitted with connectors;            2,779                                        Italy                        Russian Federation
                optical fibre cables, made up of individually sheathed fibres                                                                               Change in import value                       3,200                              -3,638
                                                                                                                                                              Import value in 2008                      41,250                              80,282
                                                                                                                                                          % Change in import value                        7.76                               -4.53
      640291    Footwear covering the ankle with outer soles and uppers of rubber or plastics                                           2,632                                        China                        Russian Federation
                                                                                                                                                            Change in import value                       2,898                                -277
                                                                                                                                                              Import value in 2008                      53,270                               2,006
                                                                                                                                                          % Change in import value                        5.44                              -13.81

     Source: World Bank.




57                                                                                                                                        RUSSIA’S TRADE POLICY CHALLANGES – THE WORLD BANK GROUP                                      57