1. INTERNATIONAL TRADE

2. Main Arguments for Protecting Trade (from video) n Protects Jobs n Protects Industries n Fair n Can Raise Revenue n National Defense n Infant Industry n Export Promotion

3. Types of Trade Restriction 1. Tariff - Тариф 2. 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)

4. Trade Barriers - Economic Trade 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

5. Tariffs n Advantages n Government gets revenue n Discourages imports n Disadvantages n May not work n Increases prices n Could be retaliation n On boards draw a graph showing tariffs

6. Quotas Quotas n Advantages n Can be targeted n Is bound to work n Disadvantages n Raises domestic prices n Can be retaliation

7. Voluntary Export Restrictions n Advantages n Very effective n Fosters good relations n Disadvantages n Country may not agree to it

8. Non Tariff Barriers/Health and Safety n Advantages n Not as obvious as other barriers n Can avoid retaliation n Disadvantages n Maybe more annoying than other barriers

9. Subsidies n Advantages n They encourage certain industries n Not as contentious as other barriers n Disadvantages n Cost the government money n On boards draw a graph showing subsidies

10. Subsides n Advantages n They encourage certain industries n Not as contentious as other barriers n Disadvantages n Cost the government money n On boards draw a graph showing subsidies

12. In groups of 3 – 4 (10 minutes) n Decide what should be Kazakhstans priorities e.g. what industries you would try to help and why? n What trade barriers tools would you use and why? n Present this to the rest of the group.

16. Tariffs in Kazakhstan n For final products more than for raw materials. n E.g. sausages 44% n packed juice, 46%

17. Export Duties n 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,

18. Tariffs in Kazakhstan n The current tariff schedule based on six percentage rates: n 0, 5, 10, 15, 20 and 30.

19. Non-Tariff Barriers in Kz nThe Investment Law n Puts investment in priority sectors of the economy n Puts local and foreign investors on an equal footing n Doesnt guarantee international arbitration n Doesnt protect investors against future changes in legislation

20. The procurement rules of June 2002 n Strong State control over the tender procedures in the oil and gas sector,

21. The transaction passport To help make importing easier To solve many of the paperwork issues

22. Government procurement n The government has taken steps to improve the transparency of the procurement process.

23. Services n Oil companies must purchase services only from Kazakhstan-based companies unless the required service is unavailable in Kazakhstan.

25. The Law on Production Sharing n Agreements also requires that KazMunay Gas, the national oil company, should have at least 50% in offshore oil and gas projects. n Foreigners are not allowed to own more than 20% of a mass media company in Kazakhstan.