Prices for 7 commodity groups rise due to EAEU

29-01-2018 12:38:36   | Armenia  |  Articles and Analyses
According to the Agreement on the Eurasian Economic Union signed on May 29, 2014, Armenia shall be provided a transition period till 2022 to pass to the EAEU system of common customs tariffs (CCT). During that period the customs tariffs for the most important 770 commodity groups shall be adjusted to the CCT system.   
 


Thus, according to Annex 4 of the aforementioned agreement, changes in customs tariffs are envisaged for a number of commodity groups in the year 2018. 
 
Especially noteworthy is the commodity group “Poultry meat and meat products”, for which 18% customs rate has been established compared to the previous 14%. At the same time, it is envisaged to bring it to 50% in 2022. It is worth mentioning that in January-October 2017, third countries had the largest share in imports of this commodity group. Thus, import of “Poultry meat and meat products” commodity group from the EAEU countries amounted to around 6 million USD, while import from third countries made up 24 million USD. This means that the price for importing this commodity group will considerably rise in 2018. It also refers to the subsequent periods, when its rate will increase further. 
The next commodity group to undergo changes in tariffs is the “Mineral, chemical fertilizers” commodity group. In this case, a 2% customs rate is established, while previously no customs duty was envisaged for the import of this commodity group. Here again, in January-October 2017, third countries had the largest share in imports of this commodity group, namely 19 million USD. And the imports from EAEU countries amounted to about 6.5 million USD. 
 
For the “Hair, tooth care products” commodity group as well, a 2% customs rate is established instead of the previous zero customs duty. The volume of imports of this commodity group from third countries has made up 9.3 million USD. The customs rate for “Knitted fabrics” commodity group has reached 3% compared to the previous zero customs duty. Moreover, third countries account for almost the whole imports of this commodity group, namely 13 million USD. 
 
The customs rate for the “Central heating boilers” commodity group has also been established at 3%. Here too, third countries have the largest share in imports, namely more than 6 million USD. In the “Refrigerators and other cooling equipment” commodity group, we have imports amounting to more than 9.5 million USD. A 2% customs rate has been established for this commodity group compared to the previous zero customs duty. In the “Aluminum foil” commodity group, the volume of imports subject to customs taxation (i.e. goods coming from other than EAEU member countries) reaches 4.2 million USD, and its customs rate has been set at 3% (instead of the previous zero customs duty).
Thus, we have increase of customs rates in around 7 commodity groups, which are mostly imported from third countries. There is increase of customs rates in an number of other commodity groups as well (2-3% on average), namely “Condensed milk and milk cream”,  “paints and varnishes”, “oak timber”, “cisterns and tanks”, “aluminum metal structures and parts”, “clock mechanisms”, and other commodity groups. However, we do not have considerable imports of these commodity groups from third countries, and, thus, the increase of customs rates will not result in considerable changes.
 
Thus, in 2018, Armenia joined CCT with 14 commodity groups, 7 out of which do not envisage change of customs duties. And in case of the remaining 7 commodity groups, customs rates increase by 2-3%. 
Hence, the increase of customs rates in 2018 may affect the prices of the aforementioned 7 commodity groups, which are mostly imported from third countries. 
It is worth reminding that considerable increase in customs rates for many commodity groups are envisaged from the year 2020. We will address the commodities the prices of which will rise in the upcoming years separately.
 
Hovhannes Melkumyan
“Union of Informed Citizens”
 
 
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