Economic reasons needed for Customs Union’s FTA with third countries.

MINSK, 25 October (BelTA) – Economic reasons in favor of signing free trade agreements between the Customs Union and third countries are needed, BelTA learned from Andrei Zayats, department head with the Systemic Analysis and Strategic Research Center of the National Academy of Sciences of Belarus, as he commented on results of the Supreme Eurasian Economic Council session that took place in Minsk on 24 October.

Several countries are interested in creating a free trade zone with the Customs Union of Belarus, Kazakhstan, and Russia. Turkey and India are the latest additions to the list, which includes member states of the European Free Trade Association, New Zealand, Vietnam, and other countries. “If we resort to the science of regional economic integration, we will see that preferential trade agreements like a free trade zone are designed to bolster mutual trade. It is unlikely that a free trade zone can evolve into an advanced association like a customs union. In addition to trade and economic integration the latter envisages the loss of some sovereignty. It is understandable that many countries are willing to sign a free trade agreement but very few are ready to go that extra mile to unite trade policy sovereignties even with their closest trade partners,” said Andrei Zayats.

“From all appearances deliberations about creating a free trade zone lack pragmatism. It would be wise for the three Customs Union members to work out a unified approach to determining the economic benefits and losses involved in signing a free trade agreement with a third country, including the estimated effect on consumers, manufacturers, and the state budget of each Customs Union member state. After that the method could give an answer to how, for instance, a free trade zone with New Zealand will affect the Belarusian agriculture or how a similar trade agreement with Turkey and India will affect the Belarusian light industry and what a free trade agreement with Ukraine and even the European Union can give to the Belarusian economy,” said the expert.

He reminded that India is going to complete talks on a free trade zone with the European Union soon. Turkey has a customs union with the European Union while New Zealand is a global leader in exporting dairy products while having extremely tough competition in the industry.

Source : news.belta.by