INTERNATIONAL TRADE

Main Arguments for Protecting Trade (from video) Protects Jobs Protects Industries Fair Can Raise Revenue National Defense Infant Industry Export Promotion

Types of Trade Restriction

1. Tariff - Тариф2. Quota – квота (жеңілдік)3. VERs Voluntary Export Restraints (өз еркімен

экспортты шектеушілер)4. Non Tariff Barriers (Health and Safety Regulations)(тарифтік емес кедергілер) Also support exports through subsidies. (Субсидиялар)

Trade Barriers - Economic

– tariffs – taxes on imports– quotas – limits on the quantity that can be imported.– VERs – Voluntary Export Restrictions– Non tariff barriers – i.e. rules and regulations making importing

difficult/impossible

Tariffs

Advantages Government gets revenue Discourages imports

Disadvantages May not work Increases prices Could be retaliation

On boards draw a graph showing tariffs

Quotas

Advantages Can be targeted Is bound to work

Disadvantages Raises domestic prices Can be retaliation

Voluntary Export Restrictions

Advantages Very effective Fosters good relations

Disadvantages Country may not agree to it

Non Tariff Barriers/Health and Safety Advantages Not as obvious as other barriers Can avoid retaliation

Disadvantages Maybe more annoying than other

barriers

Subsidies Advantages They encourage certain industries Not as contentious as other barriers

Disadvantages Cost the government money On boards draw a graph showing

subsidies

Subsides Advantages They encourage certain industries Not as contentious as other barriers

Disadvantages Cost the government money

On boards draw a graph showing subsidies

In groups of 3 – 4 (10 minutes)

Decide what should be Kazakhstan’s priorities e.g. what industries you would try to help and why?

What trade barriers tools would you use and why?

Present this to the rest of the group.

Tariffs in Kazakhstan

For final products more than for raw materials.

E.g. sausages 44% packed juice, 46%

Export Duties

“Kazakhstan levies export taxes on a limited number of commodities when they are exported to non-Economic Union countries.” Ferrous metal scrap is cited as an example,

Tariffs in Kazakhstan

The current tariff schedule based on six percentage rates:

0, 5, 10, 15, 20 and 30.

Non-Tariff Barriers in Kz “The Investment Law” Puts investment in priority sectors of the

economy Puts local and foreign investors on an

equal footing Doesn’t guarantee international

arbitration Doesn’t protect investors against future

changes in legislation

The procurement rules of June 2002

Strong State control over the tender procedures in the oil and gas sector,

 

The transaction passport

To help make importing easierTo solve many of the paperwork issues

Government procurement

“The government has taken steps to improve the transparency of the procurement process.

Services

Oil companies must purchase services only from Kazakhstan-based companies unless the required service is unavailable in Kazakhstan.”

The Law on Production Sharing

Agreements also requires that KazMunay Gas, the national oil company, should have at least 50% in offshore oil and gas projects.

Foreigners are not allowed to own more than 20% of a mass media company in Kazakhstan.