Global Competition Review (GCR) has published its 2012 edition of The Handbook of Trade Enforcement:
Introduction
“World trade faces a number of challenges that are having a negative impact on demand dynamics across the globe, including instability of regional markets and local crises that unbalance regional trade. A deficit of banking investment in production development, coinciding with increasing measures to reduce state budget expenses, is pushing many manufacturers to more fiercely competitive markets and still lower demand potential. Sovereign debt crises, fluctuations in currency parities and rapidly rising oil prices form new geopolitical risks that national governments cannot ignore. According to the World Trade Organization (WTO), in 2011 world trade expanded by 5 per cent (a fall from 13.8 per cent in 2010) and this growth is expected to slow down to 3.7 per cent in 2012.
Taking into account the macroeconomic developments and the ever-increasing pressure of businesses, both national governments and regional integration organisations may shift towards policies of protectionism. However, it is vital to give credit to another current trend – the development and deepening of regional integration. It creates new opportunities for trade enforcement across larger expanded markets of several countries unified by common regulation. The key players of global trade also look for opportunities in regional integration and the solutions to problems in inter-regional dialogue.
On a regional level we can generate a significant stimulus for cross-border trade. Within one year of the lifting of customs barriers at the internal borders of the Customs Union (between Russia, Belarus and Kazakhstan), the turnover of trade increased by 37 per cent.
The strictness, or otherwise, of the regulations formed by regional integration communities is immaterial; what is important is that supranational regulation is constantly deepening and increasing its influence over regional economies.
The dark side of regionalisation is the risk of new and excessive inter-regional trade barriers replacing similar barriers that previously existed between countries. Such new barriers between larger market entities may become even higher than bilateral barriers between countries.
Over the past decades, pay walls have gradually been replaced by non-tariff measures, which are becoming the main tool to assure regional protectionism. They are diverse and easy to apply and justify in terms of national healthcare, quality supervision and seasonal changes.
We welcome Russia’s initiative raised before APEC regarding coordinating technical standards regulation. We believe that a good example of the further strengthening of international cooperation in this field will lift numerous unnecessary trade barriers that currently exist and prevent new barriers emerging in the future.
The question is how to prevent new barriers rising between regions. This is a matter that should be addressed globally. At the regional level, it is much easier to lift unfair barriers. To assure wise trade management at the regional level, international communities are searching for new formats of inter-regional cooperation which would provide better mechanisms of trade regulation.
The Customs Union unites the Russian Federation, Belarus and Kazakhstan in a single market and a unified economic space under a single regulation board. The Eurasian Economic Commission forms the supranational regulatory body with its own competence and expertise in various spheres of trade regulation, from tariff and non-tariff measures through defence measures and anti-dumping investigations to customs cooperation and competition management.
Previously, regulation development and implementation were based on cooperation at inter-governmental level, thus all decisions were made by the governments themselves. Now it is hoped that the Commission will provide faster and smoother decision-making procedures.
Another key aim of the Commission is to assure compatibility of standards across the region; this is a vital issue for trade enforcement across Eurasia.
The integration of Russia, Belarus and Kazakhstan has proven both dynamic and sustainable. Initially, based on the principles of the WTO, it aimed to enforce internal and external trade. Moreover, since Russia joined the WTO in December 2011, all the multilateral trade obligations that Russia undertook are being incorporated into the Customs Union’s regulations. Thus all three states are becoming an integral part of the WTO sphere of regulation.
Unfortunately, the Customs Union is often opposed to European integration. The question of whether to integrate with Europe or within the Eurasian region should not be an issue. The Eurasian Commission shall continue to persuade our key partners, such as the EU, APEC countries and particularly our CIS neighbours, to establish institutionalised mechanisms to harmonise trade regulation.
International coordination on reducing non-tariff measures shall resolve the regionalism versus globalism problem and give the global economy a way forward towards further development.”
For more information see GCR:
The Handbook of Trade Enforcement 2012
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