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INTERNATIONAL TRADE
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Main Arguments for Protecting Trade (from video)Main Arguments for Protecting Trade (from video) Protects Jobs Protects Industries Fair Can Raise Revenue National Defense Infant Industry Export Promotion
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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)
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Trade Barriers - EconomicTrade 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
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TariffsTariffs
Advantages Government gets revenue Discourages imports
Disadvantages May not work Increases prices Could be retaliation
On boards draw a graph showing tariffs
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QuotasQuotas
Advantages Can be targeted Is bound to work
Disadvantages Raises domestic prices Can be retaliation
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Voluntary Export RestrictionsVoluntary Export Restrictions
Advantages Very effective Fosters good relations
Disadvantages Country may not agree to it
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Non Tariff Barriers/Health and SafetyNon Tariff Barriers/Health and Safety Advantages Not as obvious as other barriers Can avoid retaliation
Disadvantages Maybe more annoying than other
barriers
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SubsidiesSubsidies
Advantages They encourage certain industries Not as contentious as other barriers
Disadvantages Cost the government money On boards draw a graph showing
subsidies
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Subsides Advantages They encourage certain industries Not as contentious as other barriers
Disadvantages Cost the government money
On boards draw a graph showing subsidies
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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.
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Tariffs in Kazakhstan
For final products more than for raw materials.
E.g. sausages 44% packed juice, 46%
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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,
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Tariffs in Kazakhstan
The current tariff schedule based on six percentage rates:
0, 5, 10, 15, 20 and 30.
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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
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The procurement rules of June 2002
Strong State control over the tender procedures in the oil and gas sector,
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The transaction passport
To help make importing easier
To solve many of the paperwork issues
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Government procurement
“The government has taken steps to improve the transparency of the procurement process.
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Services
Oil companies must purchase services only from Kazakhstan-based companies unless the required service is unavailable in Kazakhstan.”
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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.