CIS countries agreed to simplify access to the service market and business conditions

The agreement on free trade in services and investment within the Commonwealth of Independent States (CIS), which has been discussed for more than a decade, was signed today by the prime ministers of the participating countries in Sochi. The essence of the agreement is to simplify access to the services market and business conditions in addition to the already existing agreement on free trade in goods. It is expected that its implementation will allow in the short term to increase trade turnover by 1.1%, and mutual trade in services – by 8%.

On Thursday, at a meeting of the heads of government of the CIS, which was held in Sochi, the prime ministers signed an agreement on free trade in services and investment – this document has been developed within the framework of the Commonwealth for more than a decade. The essence of the agreement is to guarantee access to service markets due to the obligations of certain countries to provide services or the rejection of various restrictions in certain areas – we are talking, in particular, in the field of finance, transport, construction, consulting, education and healthcare, tourism, in the development of an already existing agreement on a zone of free (and duty-free) trade in goods.

In addition to guaranteeing access to the markets of the participating countries, said the head of the Ministry of Economy Maxim Reshetnikov, the agreement also provides for easing the conditions for business in the field of industry and agriculture.

For investors from countries participating in the agreement, the working conditions “will be no worse than those that apply to local entrepreneurs or investors from third countries.” The exception, according to the minister, will be sensitive sectors, the list of which was determined by the countries. For example, Russia will retain the right to apply legislative restrictions on foreign investment in strategic enterprises (in particular, the need to coordinate transactions with the government commission, as a result of which a foreign investor acquires directly or indirectly more than 50% of voting shares), Tajikistan – to restrict foreign investments in the mining industry, and Uzbekistan – in the field of electricity, atomic energy and mechanical engineering.

As Prime Minister of Russia Mikhail Mishustin noted, “the agreement is called upon in more detail than it is written in bilateral agreements, to protect, among other things, the rights of investors and the interests of the state. Now, the prime minister noted, services account for more than half of the CIS GDP – the implementation of the agreement should give impetus to cooperation and attract capital, contribute to the opening of new areas and the creation of additional jobs.

According to the Prime Minister of Belarus Roman Golovchenko, in this way it is planned to create “favorable conditions for companies along the entire value chain.” The agreement was signed by seven countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. The agreement is open for accession by other countries, including those not included in the CIS.

It is expected that the implementation of this agreement in the sphere of services and investments will allow in the short term to increase trade turnover by 1.1% (about 81.3 billion rubles of growth), and mutual trade in services of the parties to the agreement – by 8% (or 78.8 billion rub.). Among other predicted effects is the growth of total exports of services by 5%, and their mutual imports – by 3%.

Evgenia Kryuchkova, Sochi