The establishment of the Customs Union, which has also stimulated the Common Economic Zone, represents the most important step in ensuring the free movement of freight and economic growth in the countries.
The main activities of the Customs Union, which includes Russia, Belarus and Kazakhstan, determine the implementation of common customs regulations, the application of joint customs taxes, the annulment of economic restrictions and of customs charges in mutual trade. These objectives will inevitably lead to less time in traffic for goods, less costs and higher freight volumes.
As part of the policy, the application of single tariffs for railway freight transport in the Economic Zone became effective on 1 January 2013 and under the intergovernmental agreement between Kazakhstan, Belarus and Russia, on the regulation of railway transport access, the three signatory countries will apply the single tariff. The application of the policy has determined the creation of a single system for charging railway freight transport and the objective has been reached by reducing export prices and by increasing tariffs for imports and domestic traffic. The highest reduction of tariffs for exports was adopted for refined oil (-58%), crude oil (-37%), coal (-11%) and grains (-10%). Moreover, single ta-riffs for infrastructure access within the Union could be introduced since January 2015. Economic integration, including the integration of transport systems, has the potential of bringing multiple economic benefits by creating facilities for trade in the region, for exports worldwide and the effectiveness of markets (regarding freight and services). In this context, a joint tariff policy is the first step towards integration which is already affecting trade flows.
The regional commercial integration generates many benefits and challenges. First of all, commercial barriers (related to tariffs) should increase trade and stimulate the choices of consumers. Within the Union, the set up of the “trade area” will eliminate administrative barriers, customs controls in internal borders and will optimise regional cross-border infrastructure which plays an important role in the commercial activity. Another advantage of joint policies is felt by manufacturers, because the markets will be larger, an important element in facilitating innovation, setting fix costs to be divided on large groups of customers. At the same time, consu-mers benefit from increased competitiveness in the market. These effects crucially depend not only on the establishment of the single customs union, but also on the removal of the market access barriers. “A major progress was recorded by Belarus, Kazakhstan and Russia where, with few exceptions, companies have equal rights to access the public acquisitions contracts in the three countries”, says EBRD in the “Integration across borders” report (2012).
A great challenge in the regional area consists in the export activity which represents a crucial step towards developing this activity worldwide. Therefore, the construction of the export capacity, which can take advantage of reduced (or “zero”) tariff, helps gain competitive export advantages compared to the other countries. For the three countries, the main challenge is to achieve these objectives.
Within the Union, the application of ta-riffs and the implementation of joint measure on the regulation of trade between Russia, Belarus and Kazakhstan have increased transport volumes to 62.8 million tonnes of freight. “We’ve been working in the Common Economic Zone for a year and the international railway transport has increased by 9% in this period compared to the same period last year”, declared Valery Reshetnikov, Vice President of RZD, at the end of 2012.
As part of the joint actions, the parties have reduced the number of customs operations for reducing logistics costs and the travel time by 1-2 days within the member states of the Customs Union. Currently, the largest share of the goods shipped from China to Europe is shipped through the eastern Russian ports which encouraged the development of industry in this area. The initiatives that will increase the attractiveness of Eurasia’s transit potential include the new UTCL logistics company that will encourage railway companies to accelerate the introduction of a single approach on the transport of freight , of legal regulation integrated systems, the harmonization of standards on services and the application of a single integrated information system. When the Customs Union will become fully operational and the Common Economic Zone will be created, new opportunities for the development of transport services will be identified. “In this context, the railway companies in Russia, Kazakhstan and Belarus are working on the set up of the Unified Transport and Logistics Company (UTLC), project supported by the presidents of the three countries”, declared Vladimir Yakunin, RZD President, during the International Rail Freight Conference, held in Prague (March 2013). As part of the project, it is possible to increase the number of participants only if those interested acknowledge the principles of the transport and logistics system in the
Common Economic Zone and agree with the objectives of setting up the UTLC.
The operator is to be created based on parity and set up costs reach USD 2 Billion. Each state will have to come up with containers and freight terminals; also, if RZD will come to a final result, it could ensure a stake in the shares of its container operator, while Belarus and Kazakhstan will pay for the participation with fixed goods or cash, if necessary. The platform of the logistics operator could also be a Russian Railways subsidiary, OJSC RZD Logistics, a company which doesn’t own yet fixed goods and which only deals with the organisation of logistics services.
According to the press in Kazakhstan, KTZ could contribute with a stake from the shares of Kaztransservis and Kedentransservis operators (where TransContainer already owns shares). Belarus will have the terminal in Brest and 3,000 wagons and if it selects the logistics sector, the country could also participate with other terminals that will be built: the Ministry of Transport supports the set up of 50 logistics centres (including 24 centres for transport and logistics). The development of the transport and logistics sector is a priority for the authorities who are aware of the importance of Belarus in attracting freight traffic on Western Europe-Asia axis.
Russia and Kazakhstan want
national logistics operators
Although the three countries of the Customs Union will form a joint logistics operator, the authorities announced and continue to support the need for logistics operation within the railway companies. In this context, RZD believes that an important step in the development of transport is to create a logistics operator that will continue to develop the network of sales and services in the transcontinental chain through the logistics operator owned by the company.
“The establishment of the largest logistics operator within RZD will ensure less operation costs for national companies by delivering access to efficient transport solutions”, declared RZD President Vladimir Yakunin.
For Kazakhstan Railways, the set up of a national logistics operator is an important process in the development of the sector, especially since the country wants to hold a strategic position in the logistics chain on the axis Europe-Asia. The responsible authorities work on the elaboration of the project so that Kazakhstan could have a national logistics operator by the end of the year. For 2013, Prime Minister Serik Akhmetov has requested the set up of the operator that will be part of KTZ. “Soon, we will have to draft the necessary legislation for the implementation of this project and Kazakhstan has to have a logistics operator by the end of 2013”, said Akhmetov during a meeting with KTZ representatives (since January 2013).
It is important to say that Kazlogistics, the Kazakh Association of Transport and Logistics, was set up in 2012. The association is expected to transform Kazakhstan into a commercial, logistics and business hub by 2016. Moreover, the association will help form a balance between the interests of the different transport modes and the optimisation of the quality of logistics and multimodal transport services. According to KTZ, the decision of setting up the association is another important step in the application of the logistics bases. The Customs Union within the joint economic area will accentuate cooperation with foreign partners. Consequently, freight exports and imports will grow, the commercial activity with foreign countries will be consolidated, the allocation of investments will be stimulated, as well as the implementation of innovating projects, while the development of economic and commercial targets will set the foundation of mutual cooperation and assistance.
Share on:
