After established by the sovereign states was based

After the
breakup of Soviet Union in 1991, the map of Europe drastically changed. Fifteen
new independent countries were created and despite of their independence, they
were still bound together by strong economic, political and social ties. The
aim of all the countries was to develop homeland economy and to change the
market type from planned to free market economy the countries mostly relied on other
ex-Soviet countries. At the time was established and the fact that Ukraine did
not join the organization as a full member, the country mostly relied on bilateral
agreements with ex-Soviet republics than on joining CIS and later Eurasian Customs
Union.

The
agreement was signed on December 17th, 1992, roughly a year after the breakup
of Soviet Union and ratified only on March 19th, 1999. This document is based
on the Treaty between the Belorussian Soviet Socialist Republic and the
Ukrainian Soviet Socialist Republic, which was signed in 1990. The goal of the
Free Trade Agreement is “to develop trade
and economic cooperation… on the basis of… mutual benefit”. The goal established
by the sovereign states was based on their right to pursue economic freedom and
independence. The goal was also compliant with the rules of the World Trade Organization
(WTO) as Ukraine being a full member of the WTO and Belarus being an observer.
The Parties also agreed to use the Harmonized System of Description and Coding
of Commodities of the World Trade for the purpose of sharing statistical data.

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Organization

As this
agreement is still in power and being one of the main regulation medium on
regulating trade and economic relations between countries, I believe that there
are reasons and grounds to analyze the agreement. There were used Ukrainian
original text of this agreement, which was originally published in Ukrainian,
Belorussian and Russian languages, alongside with English translation of this
document to provide meaningfulness and compliance with the economic notions in
this analysis.

The Main
Principles

In the
Article 1 stated that countries are abolishing custom fees and other taxes for
export and import on goods which are produced in one of the countries while imported
or exported to the other, but exclusions can apply to this if necessary. The
term of “commodities originating from the… state” was also later amended in
November, 2000, to comply with the policies of the Commonwealth of Independent
states (CIS), as Belarus is a member of the organization. The parties also
signed under non-discriminating paragraphs. These include not imposing any
additional charges on imported/exported goods, which were discussed in the
Article 1, in addition establishing non-discriminating policies, where taxes
cannot be higher than those for domestic goods or goods produces in third party
countries. This rule also applies to storage and transporting the goods, as
well as to payment transactions, which can be handled in compliance with “interbank agreements”, as per Article 4.
The parties also agreed on not applying quantitative margins (quotas) of import
and export of goods, but still can somehow restrict (apply custom duty, for
example) import or export of goods for some defined period of time and just in
several cases. For example, in case of “shortage
of commodities” or if “cause or
threaten to cause damage to domestic producers” is possible. These emergency
measures can be applied only in case of direct threat to domestic producers and
economy, which can be caused by the agreement, or if the agreement can worsen
the economy of one of the parties and only for “shortest possible period” until the economic situation is
normalized.

Reexport

In Article
5 Ukraine and Republic of Belarus incorporated rules of reexport. The products
exported to the other country cannot be reexported to prevent incompliance
(such as breaking tariff or nontariff regulations) in trade relation between
one of the parties and third party countries. This rule applies to all kinds of
goods and in all possible cases except some exclusions. Written confirmation of
the country (only respective ministries or government agencies are authorized
to express their consent for reexport) and after a consultation this rule can
be applied. In case of reexport of such goods, the country-producer, whose
goods were reexported, can seek for economic loss compensation. Reexport in this
agreement means “the removal of commodities,
which originate from the customs territory of one of the states… by another state
beyond its customs territory in order to export them to a third country”.

Custom duties,
transit and other provisions

Agreement
also strives to remove any kind of unfair business advantages and encourage the
parties to eliminate such practices, namely, to eradicate agreements between
companies and associations, which are called to limit competition or infringe
terms of making business or using advantage of monopoly status for own benefits.

Under
Article 10 the sides agreed on the principles of free transit as a vital
element of their economic cooperation and further development of economy. Both
states are to provide free transit all over the territory of country as well as
needed facilities to perform transitional and logistics operation. In this case
fees on transportation can be applied if they are “economically
justified”.

In Article
11 it I stated that both countries can take measures which are accepted
internationally for “the
protection of its vital interests”. There is exhaustive list of possible types of
goods and commodities that can be of a concern in trade, such as informational
products, weapons, nuclear equipment, precious metals and goods which can make
damage to “health of people, animals and plants”.

Parties
agreed on holding consultation on regular basis to control export in compliant with
this agreement way and to create efficient export control system. This rule
also considers consultations in case of force major conditions to minimize
negative effect of the provisions on economy, domestic producers and national
security and defense. All possible disputes between countries, concerning this
agreement, are to be handled and settled through negotiations between parties,
not involving third party countries. Countries should be limited or restrained
by the agreement to settle economic bounds with other countries, nevertheless,
while establishing such relations, each party should keep own obligations as
per this agreement.

To achieve
the goals set by this agreement (namely trade and economic cooperation between
the countries), in Article 16 the sides formed the Intergovernmental
Mixed Ukrainian-Belorussian Commission which will ensure compliance or the policies established in the
document and will pursue the goals of the agreement.

The
agreement initially was signed in Kyiv, 17th of December 1992. The document
is published in three languages (Ukrainian, Belorussian and Russian) all of
them are considered to be legitimate. The agreement includes an Annex (Classification
of Commodities Liable to Customs Duty by Ukraine).