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Trade Policy Regime
The basic legislative base for implementation of trade regime in the Republic of Tajikistan are the Law «On Foreign Trade Activities in the Republic of Tajikistan» (№869, December 27, 1993) and the Law «On State Regulation of the Foreign Trade Activity» (№822, September 3, 1999), providing protection of the rights, interests and property of participants of foreign trade activities, independently of patterns of ownership, according to the conventional norms of international law which create a legal platform for integration of the economy of country into the world economic system.
Major principles by which the Republic Tajikistan is guided in implementation of foreign economic and trade activities are reflected in the abovementioned laws. These include:
- Mutually advantageous cooperation with all countries, foreign, legal and physical persons, and international organisations;
- Equality of the parties and non-interference in internal affairs of partners in foreign economic relations;
- Maintenance of activity in the field of foreign trade according to the international norms, rules, and conditions.
Besides, by these laws the rights of subjects of foreign trade of Republic Tajikistan and their duties are defined. Management forms and issues of state regulation on foreign trade, guarantees of the rights and responsibility of subjects of foreign trade are reflected in these laws.
The basic directions of country's trade regime are carried out on the basis of the analysis and estimations of current general social and economic situation in the country and foreign trade, updating of long-term parameters and basic directions of development
The basis of development trade policy regime development are concrete steps towards intensification of integration process of national economy with world economy and maintenance of its due participation in the international division of labour and international trade. Arrangment of conditions for inclusion of domestic enterprises in international production, encouragement of export and investment activities, maintenance of their systematic participation in development of international trade rules and achievement of sustainable human development is a main objective of external economic policy of the country and base for formation of global partnership with a view of development.
Characteristic feature of external economic policy of Tajikistan is a process of flexible regionalism. The given approach assumes participation of Tajikistan in regional and bilateral trade agreements aimed at encouragement of trade and rational use of available resources and production factors based on recognition and observance of rules and regulations of multilateral trade system. At the present time, realization of a number of programs on export production development of certain branches of national economy, and organization of processing of raw materials and goods is planned.
Practical achievement of abovementioned tasks becomes an important basis for overcoming of raw material orientated export and achievement of positive shifts in foreign trade and balances of payment of the country.
Development of regional cooperation provides:
- Perfection of regulatory and legal bases of regional cooperation;
- Development of transport and transit cooperation within regions for resolving regional transit problems and issue of easing communication deadlock;
- Development of cooperation in the field of effective utilization of water-energy resources and hydro-carbonic raw materials;
- Development of regional trade and taking measures on simplification of trade procedures within the region;
- Acceleration the process of formation of Custom Union and Common Economic Space within Euro Asian Economic Union;
- Activization of relations within SCO;
- Development of relations within ECO;
- Development of transport corridors;
- Establishment of an International Power Consortium and enhancement of electric power transfer potential to the countries of the region by building of transmission lines.
Particularly, it is necessary to underline the importance of passing Presidential Decrees «About Export Trade Liberalization in Republic Tajikistan» (June 27, 1995) and About Liberalization of Currency and Export Operations»(February 24th, 1996) for the foreign trade activities. Starting from the same period, Systems of Licensing and Quotation, and since February 1997 the Order of Examination of Export and Import Contracts (Agreements) have been cancelled.
For increasing interest of foreign trade stakeholders, export customs duties were cancelled and graduated rate of import duties were developed and introduced.
Goals of Trade Policy
Goals of trade policy include estimation of current situation in national economy and domestic exports, purposes and aims, specific ways, mechanisms and forms of their realisation, taking of complex and local measures on export development at various levels: country, branches of national economy and the enterprises - large exporters, are based on this estimation.
According to the Program of Development of the Republic of Tajikistan's export till 2015 adopted by the Order of the Government of Tajikistan №299 dated June 4, 2006, the strategic target is perfection of domestic export structure which is seen as a process of enhancement of efficiency and increase in scales of export on the basis of line extension and improvement of quality of exported product, perfection of commodity and geographical structure of export, use of progressive forms of the international trade and economic cooperation.
Achievement of the object in view assumes active participation of state in development of domestic export, close coordination and common efforts of all interested parties in this direction, formation of long-term partner relations of authorities and business interests in protection of trade and economic interests of the Republic of Tajikistan abroad.
The basic content and Program orientation are substantiation and subsequent realization of a complex of economic, organizational and legal measures of state support and export incentives.
Offered measures represent a complex of new approaches on the basis of careful analysis of situation and problems of foreign economic development of the country and its main component is export. The specified measures, in the long term, can become the effective mechanism for increasing of export and enhancement of competitive products production.
Realization of strategic target of the Program requires objective necessity of implementation of radical reform in the area of foreign economy providing growth in exports and strengthening of its base, creation of an effective and developed foreign economic activities of the country.
The essence of implementing reform contains basic changes in administratively economic and technological forms of realization of foreign trade activities; providing real growth of export-oriented branches of production and, as a whole, of foreign economic activities; creation of new and import-substituting productions; and achievement of positive shifts in foreign trade and balance of payment. By development and implementation of reforms basic changes will take place in forms of realization of foreign trade only. In implementation of the Program, measures will be taken on perfection of legislative and standard bases by adoption novel laws and by-laws, which define the process of deepening and perfection of foreign trade.
The reform of foreign trade assumes basic changes and transformations in formation and realization of new forms of implementation of foreign economic policy providing:
- structural reorganization of production with a view of reorientation of national economy branches to the primary and accelerated development of export-oriented enterprises and the productions providing activization and, in the future, export diversification;
- gradual shift from raw-material orientation of export towards purposeful development of branches producing high level processed goods;
- creation of nation-wide export support and incentive system, including increase in internal funds of the enterprises and constant allocation of target financial assets and assignments (on returnable and commercial basis) for export development needs;
- creation of modern systems of export crediting and insurance;
- development of taxation system, customs, tariff and non-tariff regulations on export.
Perspective and priority directions of export development and possibility of their implementation
Increase in export volumes, measures and means of achievement, arrangement of accents at determination of key parameters of development and actual taking measures for export incentive depend on choice of priority directions and, in general, of export strategy.
In the abovementioned Program of Development of the Republic of Tajikistan's export till 2015 it is considered that in the nearest and intermediate term, domestic export will keep raw-material orientation. Therefore, measures directed on effective utilization of the available source of raw materials, finding the ways and conditions of gradual overcoming of raw-material orientation are determined as the main task on immediate prospects.
The estimation of indicators of the Program shows that from the point of view of efficiency of raw-material export during its implementation the following have special value:
- flexible maneuvering by cumulative export potential of raw-material branches depending on conjuncture and demand in foreign markets. For this period, it is necessary to review structure of exporting raw materials from points of real manufacturability and their possible processing in the country. It will allow to reduce export of basic raw materials. Thus, it means that light industry enterprises will plan to create divisions on processing of cotton production waste, and also have corresponding capacities for primary processing of greasy wool;
- improvement of quality of primary goods and half-finished products which are imported. During this period, it is necessary to provide a strict control over conformity of importing raw materials and other goods to the international standards and certification rules, introduce obligatory article numbering system for goods, put a basis for competitive products production;
- optimization of price and other conditions of export contracts. It is expedient to conduct basic changes in rules on cotton production sale based on futures transactions.
Increase of efficiency of raw export and necessity of its reorientation on finished goods is possible by technical re-equipping and modernization of enterprises and whole branches focused on export of raw materials.
In 2009-2011 it is planned to shift to processes of establishing complete system for effective utilization of available capacities based on modern technology. The organization of new productions for wholly processing and achievements of a full production cycle will create conditions for export diversification.
A serious push to export development will be planned measures on creation of free economic zones in the country.
The Law «On Free Economic Zones in the Republic of Tajikistan» was adopted in 2004, in 2005 the Majlisi Namoyandagon of Majlisi Oli of the Republic of Tajikistan (Parliament) has approved "Regulation on Free Economic Zones."
For the purpose of practical implementation of the Law and Regulation on Free Economic Zones in the Republic of Tajikistan the Ministry of Economic Development and Trade prepared a number of decisions of the Government of the Republic of Tajikistan directed on acceleration and functioning of Free Economic Zones in the Republic of Tajikistan.
The important step in this direction was adoption of the "Regulation on "Sughd" Free Economic Zone" and the "Regulation of "Panj" Free Economic Zone" by relevant decisions of the Parliament of the Republic of Tajikistan in October, 2008.
It is necessary to notice that in the Program of Development of the Republic of Tajikistan's Export till 2015, with a view of realization of abovementioned standard and legal documents, wide use of capacities of established zones in development of export is provided. Their establishment is considered as a key moment in improvement of export trade, maintenance of high export growth rates and national economy as a whole. Considering raw-material orientation of export, in the Program it is provided that the free economic zones will be specialized in processing export-oriented raw materials and in these zones there will be organized production and export of finished goods.
As a whole, realization of the above-stated perspective and priority directions of export development with taking into account real capacities of economy at each stage of its transformation, can provide essential shifts in the foreign trade turnover structure, expressed in advancing growth rates of export of competitive products, goods of medium and high degree of processing, and finally, achievement of positive trade balance.
Measures of a commercial policy and practice of its application
Custom tariffs of the Republic of Tajikistan are regulated by the Customs Code of the Republic of Tajikistan (new edition has become effective since January 1, 2005). The given code establishes an order of formation and application of Custom tariffs of the Republic of Tajikistan - the instrument of commercial policy and state regulation of domestic market of goods in the country providing its interrelation with the world market and rules of taxation of the goods moving through the Republic of Tajikistan customs frontier.
Main objectives of custom tariffs:
- rationalization of commodity structure of importing goods to the Republic of Tajikistan;
- maintenance of rational ratio of export and import goods, currency incomes and expenses in the Republic of Tajikistan;
- providing conditions for progressive changes in structure of production and consumption of goods in the Republic of Tajikistan;
- protection of economy of Tajikistan against injurious effect of foreign competition;
- providing conditions for effective integration of the Republic of Tajikistan into world economy.
Customs tariff of Tajikistan is a code of customs duties' rates applied to goods, passing through customs frontier of the country and systematized according to the Commodity Nomenclature of Foreign Trade (further CNFT).
CNFT is applied in Tajikistan and is based on the principles accepted in international practice and classification schemes of goods. CNFT corresponds to and is based on the Harmonized System of Description and Coding of Goods of WTO (International Convention on the Harmonized System of Description and Coding of Goods/Brussels, June 14 of 1983/, and Protocol on Entering of Amendments to the International Convention on the Harmonized System of Description and Coding of Goods/Brussels, June 24 of 1986/).
The custom tariff is applied on importing goods to customs territory of the Republic of Tajikistan and exporting goods from the country. At the present, the Republic of Tajikistan's custom duties are applied only on importing goods to customs territory of the Republic of Tajikistan. Export of goods from the country is not imposed customs duties.
According to current legislation of the Republic of Tajikistan custom duties are not applied on export operations. The custom tariff in the Republic of Tajikistan defines the rates of import customs duties.