Impact of Customs Union of Belarus, Kazakhstan, and Russia on the Import of Cars into Kazakhstan - Example

Impact of Customs Union of Belarus, Kazakhstan, and Russia on the import of cars into Kazakhstan of the of the of the Course Date Impact of Customs Union of Belarus, Kazakhstan, and Russia on the import of cars into Kazakhstan Introduction The world economy and the international trading community have undergone multiple pro-liberalization initiatives in the past three decades. The ongoing drive of globalization has made it important for countries to develop free trade areas between them to strengthen the extent of economic integration between them. There is a subtle difference between free trade zones and customs union in the sense that customs union. Researchers claim that free trade zones are politically favorable, provide relatively efficient bilateral trade relations and are geographically more independent than customs union (Facchini, Silva and Willmann 139). The Eurasian Customs Union of Russia, Belarus and Kazakhstan is a relatively new customs union that has been formed after complex round of negotiations that had started from 1993. Formation of this union was aimed to improve the economic integration between the three states by removing the custom barriers between the countries in a phased manner. Common external tariff was established between the countries in 2009 (Hans-Michael, Gennadiy and Igor). The formation of the union came as an unexpected from shock to the world economy as none of the members were initially a part of the World Trade Organization. The purpose of this paper is to analyze the impact of the formation of the Customs Union between Russia, Belarus and Kazakhstan on the automobile industry of Kazakhstan. Facchini, Giovanni, Peri Silva and Gerald Willmann. “The Customs Union issue: Why do we observe so few of them?” Journal of International Economics 90.1 (2013): 136-147. Print. Wolffgang, Hans-Michael, Gennadiy Brovka and Igor Belozerov. “The Eurasian Customs Union in transition.” (2013): 93-102. World Customs Journal. PDF File. The rationale behind choosing Kazakhstan is that after the deregulation of tariffs, Russia and Belarus had experienced marginal declines in terms of average tariff whereas Kazakhstan had experienced application of tariffs on majority of sectors. This paper explores the impact of changes in tariffs on the car import industry of Kazakhstan in particular by mainly relying on secondary sources of data. Customs Union of Belarus, Kazakhstan and Russia The formation of Eurasian customs union can be divided into three distinct phases. The first phase continued from 1993 to 1999, when the former states of the Soviet Union wanted to form an economic union by signing a number of treaties. The political unrest that had continued from 1995-1999 had stalled the talks of formation of economic union till 1999. The next phase continued from continued from 2000-2006 when there was renewed interest in formation of customs union between the independent states. EurAsEC had hinted towards the formation of the Customs Union between Belarus, Russia and Kazakhstan. The third phase began from 2007 onwards. The customs union was established in October 2007 after the state leaders of the three states had signed a treaty between Belarus, Russia and Kazakhstan (Krotov 133). In 2011 the Customs Code of the Eurasian Customs took place which had marked the completion of the Customs Union. The formation of the Customs Union had a formidable impact on the economy of Kazakhstan in particular as the country had experienced an increase in tariffs of 60% of items (Dragneva and Wolczuk 36). The immediate impact of the formation of the customs union could be explained by four major parameters namely abolition of internal custom borders, common tariff, reduction of customer duties and regulation of non-tariff barriers. Krotov, Igor. “Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation within the framework of the Eurasian Economic Community.” World Customs Journal 5.2 (2011): 133. Print. Dragneva, Rilka and Kataryna Wolczuk. Russia, the Eurasian Customs Union and the EU: Cooperation, stagnation or rivalry? New York: Chatham House, 2012. Print. Abolition of internal customs borders: The removal of internal custom borders was expected to benefit sectors like vehicles, energy, chemical and metallurgical products. It has been observed that majority of the exports are from Russia as the economy of Russia is the largest compared to the other two. The Common Customs Tariff was introduced for the states to harmonize the rate of imports between them. The tariff rates of Russia were taken as the base for adjusting the rate of tariffs for the other countries. The tariff rate structure between Belarus and Russia were quite similar prior to the formation of the customs union. As a result Belarus did not experience huge changes in its tariff rate structure. According to the research conducted on Kazakhstan it was observed that economy of Kazakhstan was rather a liberal one that liberal trade policies (De Souza, “An initial estimation of the economic effects of the creation of the EurAsEC Customs Union on its members”). Common External Tariff: The Custom’s theory in economics states that when a Custom union is formed then the member countries set a common tariff for the entire world economy if they have to conduct trade with them. The introduction of the common external tariff had raised the tariff in 45% of the cases and reduced them only in 10% of the cases (De Souza, “An initial estimation of the economic effects of the creation of the EurAsEC Customs Union on its members”). Reduction in Customs Tariff: Reduction in customs duties among the member states largely resulted from the decision of Russia to join the WTO in 2012. Custom duties were reduced from 9.6% to somewhere between 7.8% and 7.5 % (Khegai “Car import dropped 75-fold in Kazakhstan”). The other two countries namely Belarus and Kazakhstan have also followed the footsteps of Russia and reduced Customs tariff. However, the reduction in customs tariff was accompanied by the rise in non-tariff barriers. Khegai, Dmitriy. “Car import dropped 75-fold in Kazakhstan.” Tengri News. LLP, 3 December. Web. 5 September. 2014. De Souza, Lucio Vinhas. “An initial estimation of the economic effects of the creation of the EurAsEC Customs Union on its members.” The World Bank. The World Bank, 19 March. 2011. Web. 5 September. 2014. Non-Tariff Barriers: The Eurasian Customs Union has considered reducing the level of non-tariff protectionist measures between the states to increase trading with the global economy. Presently the non-tariff barriers are high and it has been objected by countries like the U.S.A. and member countries of the European Union. According to researchers formation of customs union or economic union can have two major impacts on the trading structure of a country namely trade creation and trade diversion. It has been observed that outcomes of formation of trade union depends on the comparative advantage of the nation relative other nations. Low income countries have comparatively lesser advantages compared to high income countries from being a part of economic union (Venables 747-761). The research of Viner (cited in Bhagwati, Krishna and Panagariya 57) had confirmed that in a trade diversion situation a member country of the union switches its import from a country that has relatively lower cost of production to another country that has higher cost of production and this situation is detrimental. In case of The Customs Union tariff it has been observed that Russia and Belarus has been highly successful in diverting trade from Kazakhstan. Researchers had supported the notion of trade diversion as a consequence of its entry into the Customs Union. Their research had confirmed that imports from Russia to Kazakhstan had increased but imports from other trading partners have fallen as a consequence of the Customs Union. Imports from the European Union into Kazakhstan had suffered maximum after the entry of Kazakhstan into the treaty (Rilka). The following graph shows the fall of imports in Kazakhstan after it had joined the Eurasian Custom Union. It can be clearly seen from the graph below that the proportion of trade conducted with Customs Union partners have increased proportionately. Bhagwati, Jagdish N., Pravin Krishna, and Arvind Panagariya. Trading blocs: alternative approaches to analyzing preferential trade agreements. Cambridge: MIT Press, 1999. Print. Venables, Anthony J. “Winners and losers from regional integration agreements.” The Economic Journal 113.490 (2003): 747-761. Print. Dragneva-Lewers, Rilka. “Legal Regime of the Belarus-Kazakhstan-Russia Customs Union.” (2012): 1-17. University of Manchester, Mimeo. PDF File. The green solid line in the graph shows the sharpest decline from its previous position and it represents the European Union. Imports from China had almost remained constant according to the estimates. Figure 1: Deviation of import trend from trading partners (Source: Asel and Alexander) The overall external trade pattern of Kazakhstan is shown in the following pie chart for 2010. Figure 2: Share of imports from trading unions (Source: Asel and Alexander) Isakova, Asel and Alexander Plekhanov. “Customs Union and Kazakhstan’s Imports.” (2012): 1-20. CASE Network Studies and Analyses. PDF File. It can be seen from the above graph that maximum imports of Kazakhstan comes from the Customs union and relatively lesser proportion from all the other economic unions. The European Union is the second largest trading partner of Kazakhstan. Vehicles, automobiles and car parts were majorly imported from the European Union before the formation of Customs Union. In terms of trading commodities the following graph shows the proportion of commodities that were imported in Kazakhstan from its major trading partners. Figure 3: Share of imports of commodities (Source: Asel and Alexander) From the above graph it can be seen that majority of vehicle imports in Kazakhstan came from the EU and least of it were imported from China. Isakova, Asel and Alexander Plekhanov. “Customs Union and Kazakhstan’s Imports.” (2012): 1-20. CASE Network Studies and Analyses. PDF File. Among the European countries majority of imports came from Germany. Both used and new foreign cars were imported from the foreign countries. Automobile Industry imports There is a dearth in the existing literature about studies undertaken by researchers to study the impact of the Customs Union on Kazakhstan’s automobile sector. Majority of the research work that is undertaken focuses only on the imports of the country as a whole. Therefore, it is very difficult to comment on the overall state of the automobile sector based on the present state. It had often been argued that the gains from trade are often unequally distributed from the Custom’s Union in favor of Russia. With the passage of time it has been realized that the formation of Customs Union have displaced the imports of Belarus and Kazakhstan from EU and China to Russia. Such an effort have provided relatively greater gains for Russia compared to Belarus and Kazakhstan as both of these countries have experienced rise in tariff rates while Russia had experienced fall in tariff rates after the establishment of Customs Union. Kazakhstan’s car market can be broadly divided into two groups namely the used imported foreign car, new imported cars and the domestically produced cars. The imported car market of Kazakhstan was mainly dominated by imports from Japan, Germany and the USA that formed more than 80% of the market share (Roman). The formation of the Customs Union of Belarus, Russia and Kazakhstan had impacted the automobile market primarily through the introduction of the Common Customs Tariff. The government had temporarily exempted the Common Customs Tariff on personal cars which had been lifted in July 2011. The impact of the tariff on the import of cars can be pictorially represented as: Mogilevskii, Roman. “Customs Union of Belarus, Kazakhstan and Russia: Trade Creation and Trade Diversion in Central Asia in 2010-2011.” (2012): 1-34. University of Central Asia. PDF File. Figure 4: Share of car imports in Kazakhstan from different partners (Source: Roman) The above graph shows that the imposition of tariff had led to the fall of imports of cars in 2011. It has been estimated that the cumulative share of traditional suppliers had fallen below 60% by 2011. The domestic demand was however insatiable which was compensated by the imports of cars from Russia. Considerable imports were also made from Uzbekistan which began to enjoy duty-free access to the markets of Kazakhstan. According to the reports published by the Observatory of Economic Complexity cars in Kazakhstan ranks among top five items that are imported. Cars account 3.2% of the total imports and is preceded by crude petroleum, railway freight and crude petroleum. Joining of the Customs Union had adversely impacted the import of cars into Kazakhstan (“Trade in Kazakhstan”). Majority of factors have contributed to the decline of car markets in Kazakhstan namely global recession, galloping inflation and overall sluggish economy had slowed the growth of the car market. Statics reveal that the number of cars imported in Kazakhstan in 2009 reduced by 23% compared to its value in 2008. Furthermore, the importation of new cars in the country in 2009 had fallen two times compared to its value in 2008. “Trade in Kazakhstan.” Observatory of Economic Complexity. Macro Connections. 5 September. 2014. Web. 5 September. 2014. Importation of new cars had fallen by 14,000 units and importation of used cars had fallen by 26% (“Kazakhstan Car Market Study 2010”). According to the report published by Tengrinews it has been reported that majority of the fall in imports could be attributed to the policies adopted by Customs Control Commission of Kazakhstan as per the conventions of the Custom Union. It has been reported that the import of cars were estimated to be around 119,809 cars in 2011 which had fallen to 1,599 cars in 2012 (Khegai “Car import dropped 75-fold in Kazakhstan”). Import duties are cited as the main reason that had contributed to the fall of the car imports. It has been forecasted that Kazakhs will have to switch to Russian cars to meet the shortage in car demands in future. One of the major reasons that had resulted in the fall of car imports in Kazakhstan is the increase in the tariff rates of the cars in the country. The rise in tariff rates can be cited as one of the major reasons that had resulted in the trade diversion of Kazakhstan. Raising import duties on cars has discouraged trading partners from exporting cars to Kazakhstan (Oraz and Lyaziza). A major impact of the trade diversion will be loss in welfare for the consumers. In case of Kazakhstan it has been found that import of cars have shifted from more efficient producers like China and other Asian countries to less efficient producers like Russia and Belarus. The abnormal rise in the tariff rates due to the common external tariff in Kazakhstan have made imported cars in Kazakhstan highly expensive (Rozhkov 16-26). Trade diversion has already been found to have a detrimental impact on the economy and furthermore switching over to inferior quality cars reduces the welfare for the customers. This trend has also been observed in “Kazakhstan Car Market Study 2010.” BRIF Research Group. BRIF Research Group, 2014. Web. 5 September. 2014. Khegai, Dmitriy. “Car import dropped 75-fold in Kazakhstan.” Tengri News. LLP, 3 December. Web. 5 September. 2014. Jandosov, Oraz and Lyaziza Sabyrova. “Indicative tariff protection level in Kazakhstan: Before and after the customs union (part I).” (2011): 1-7. RAKURS Centre for Economic Analysis. PDF File. Rozhkov, Dmitry. “Trade in Kazakhstan: Recent Trends and the Customs Union.” IMF Country Report 11.151(2011): 16-26. Print. Kazakh as well (De Haas, Ralph and Plekhanov, “Let’s Stick Together: Pros and Cons of the Tripartite Customs Union in the CIS”). The government has deliberately done the hikes in some of the selective sectors including cars to boost the export sector of the country. The economic rationale behind the government decision was to provide a boost to the domestic car industry of the country. In an effort to achieve this, the government had increased the duty on imported used cars from 10% to 30% (Bisenov “Kazakhstan calculating gains from an increase in duties for imported used cars.”). The government had expected that with an increase on import duties of used cars the import of non-Russian cars can improve. However, the statistics compiled shows results which are not something that the government had expected. The European Union had already began a propaganda in the WTO that the duties imposed on used foreign cars should immediately be scrapped or else official complaint will be launched in the WTO. Based on the statistics in the above discussions it can be argued that automobile industry is one of the industries that had experienced maximum trade diversion among other sectors in the economy. The exports of Russia and Uzbekistan and other countries of the Central Asia had received a boost due to formation of Customs Union. The government of Kazakhstan has promised to reduce the import duties on foreign cars after the accession of Kazakhstan into the WTO. The government is expecting to improve the imports of the country by encouraging exporters to export their products in Kazakhstan (Adam and Teodor). De Haas, Ralph and Alex Plekhanov. “Let’s Stick Together: Pros and Cons of the Tripartite Customs Union in the CIS.” European Bank for Reconstruction and Development. EBRD, 1 February. 2010. Web. 5 September. 2014. Bisenov, Naubet. “Kazakhstan calculating gains from an increase in duties for imported used cars.” Central Asia Online. Central Asia Online, 20 March. Web. 5 September. 2014. Heal, Adam and Teodora Mladenovic. “Kazakhstan’s membership of the Eurasian Customs Union: Implications for trade and WTO accession.” (2014): 1-12. ArtNet. PDF File. According to the research conducted by Jensen and Tarr Kazakhstan can expect to reap benefits in terms of reduced import duties (5-26). It is also expected that liberalization of trade barriers to foreign investment can bring in fresh investments in the manufacturing and the service industry which can improve the productivity of Russia, Kazakhstan and Belarus. Accession to WTO can be considered as a milestone in the economic history of Kazakhstan. The joining of Kazakhstan into the WTO will mark the reduction in import tariffs, government procurement practices and open its markets for access by most of the global countries. Impact on Consumers and Economy The altered dynamics of trade creation and trade diversion has shifted the equilibrium of the Kazakhstan economy. The economy has experienced positive growth in some sectors while negative growth on others. The impact of trade diversion on the consumption can either be positive. It has been observed that consumers of the Custom Union are affected only when the production efforts undertaken by the Union results in efficient resource allocation. Before the trade integration customers were have no option but to purchase inferior quality products from the local producers. Formation of trade union on the other hand allows the customers to purchase products at lesser price thereby raising their real income. The effects of formation of customer union can be negative if a condition of imposition of tariff is created after its formation. For instance, if a nation did not have any prior tariff before the formation of Union and was importing freely from other countries then formation of Union impacts the customers negatively. The case of Kazakhstan can be considered as a classic example of negative consumption effect on account of the hike in the tariff rates. Empirical studies conducted in Kazakhstan has revealed that formation of Customs Union have had an overall negative impact because the trade creation of the country has not been enhanced while there are significant evidences of trade diversion. Jensen, Jesper and David Tarr. “Impact of Local Content Restrictions and Barriers against Foreign Direct Investment in Services: The Case of Kazakhstans Accession to the World Trade Organization.” Eastern European Economics 46.5 (2008): 5-26. Print. The car industry is a classic example where efforts to raise the domestic production of cars have made the country forgo superior quality cars imported at lesser price from Asian countries (Corden 465-475). According to the static impacts of diversion method created by Viner, the following diagram shows the extent of welfare loss to the economy on account of the Custom Union. Figure 5: Welfare Loss in Customs Union Formation (Source: Cherunilam, 54) The above diagram shows the demand and supply curve of a country marked by DD1 and SS1 respectively. The imposition of tariff inflates the supply curve from CC1 to TT1. The total welfare loss of the economy is presented by FGRU prior to the formation of the union. After the union is formed only the part UKNR is gained by the customer but the remaining FGNK part is lost due to the shift of production from more efficient producer to less efficient producer. Cherunilam, Francis. International Eco. New York: Tata McGraw-Hill Education, 2005. Print. Corden, Warner Max. “Economies of scale and customs union theory.” The Journal of Political Economy (1972): 465-475. Print. In case of Kazakhstan cheaper cars with superior quality could have been purchased by the customer if the import duties were not levied by the Custom Union. However, it cannot be implied that formation of Customs Union entirely has a bad impact on the economy. Static impact of formation of Customs Union can be beneficial for the economy if the summation of positive production effect and the positive consumption effect represented by triangles MUN and KRP respectively outweighs the area of the rectangle represented by NKFG. Customs Union also has the capability to generate number of dynamic advantages of the economy as well. For instance, it has the capability to provide increased competition within the member states by expanding their markets; provides the member with greater economies of scale by allowing them to integrate with other economies; and also provides the member states with external economies. Economists have established that external economies allow a country to access technological know-how and smoothens the process of knowledge diffusion (Blink and Dorton, 67). Therefore, it is difficult to comment on the overall impact of formation of a Customs Union on the economy based on only disadvantages of trade diversion. According to the researchers, the Custom’s Union of Belarus, Kazakhstan and Russia it has been revealed that introduction of tariffs is bound to produce economic losses in the member states. The condition is likely to worsen more if the member countries of the trading union have a non-sloping supply curve. This is primarily the reason for which the losses of small economies like Kazakhstan will be magnified (Constantine and David). Their research had revealed that preferential trade arrangements with economies of unequal size and scale where smaller countries are expected to raise the supply of goods produced at protected prices can lead to worse outcomes compared to a state where non-preferential tariffs are imposed at same rates. Import Substitution and the automobile industry The application of import substitution in the automobile industry and its considerable success in the market has often been debated in the academic literature. Blink, Jocelyn, and Ian Dorton. IB Course Companion. Oxford: Oxford University Press, 2011. Print. Michalopoulos, Constantine, and David Tarr. “Are Customs Unions Economically Sensible in the Commonwealth of Independent States.” (2005): 4-30. World Bank, Washington. PDF File. For instance, in case of Taiwan the import substitution of the automobile industry did not meet the required success standards because researchers have pointed out that import substitution of the automobile industry is not directly or indirectly by any export market. In case of the Taiwan automobile industry the government had imposed barrier on imports of cars and this in turn had increased the power of the local automobile producers. The domestic producers imported automobile parts from foreign producers and the quality of the products deteriorated. In case of Latin America it was observed that the benefits of import substitution were reaped only till the early 80’s after which negative returns had set in. Locally manufactured goods failed to meet the quality of international standards and welfare loss of the economy was reported (Fei, et al., 45). The case of Kazakhstan could not be directly compared to that of Taiwan because the government had not banned the entry of foreign cars yet the rise in price of cars has reduced consumer welfare. There are numerous examples in the past where import substitution was considered as a major process for industrialization of the economy. In Latin American countries like Brazil and Mexico import substitution of manufacturing industries including automobiles were subjected to import substitution industrialization. The results after three decades had shown that the results were mixed (Baer 95-122). The policy that has been adopted by the Kazakhstan market in its automobile sector has been termed as the import substitution policy and this strategy has been used by multiple countries in the past with mixed results. For instance, countries like Malaysia and Thailand had pursued the import substitution policy in the automobile industry in the period of early 1960s and 1970s ((Wad 172-193). Fei, John C. H., Gustav Ranis, Sheng-Cheng Hu, Yunpeng Zhu and Yün-pʻeng Chu. Essays in Memory of John CH Fei: The political economy of Taiwans development into the 21st century. Edward Elgar Publishing, 1999. Print. Baer, Werner. “Import substitution and industrialization in Latin America: experiences and interpretations.” Latin American Research Review (1972): 95-122. Print. Wad, Peter. “The automobile industry of Southeast Asia: Malaysia and Thailand.” Journal of the Asia Pacific Economy 14.2 (2009): 172-193. Print. These policies were later changed in the late 90’s with the accession of the countries into the WTO to liberalize trade. Conclusion The formation of the Customs Union of Belarus, Kazakhstan and Russia has become a matter of considerable interest among researchers. This paper had simply focused only on the automobile industry of Kazakhstan to understand the impacts of imports. Based on the research that has been conducted in this paper it can be seen that the formation of the Customs Union of Belarus, Kazakhstan and Russia had adversely impacted the imports of foreign cars from non-member countries. The worst hit was the imports from the European Union. Imports of cars from Russia had increased considerably in Kazakhstan. The primary reason behind this reduction in the imports was rise in the import duties of foreign cars as per the new government policies. A formidable impact of this rise in the import duties meant that greater number of cars began to be imported from Russia. The quality of cars that were imported had deteriorated significantly. Therefore it can be commented that trade diversion had occurred in case of Kazakhstan in favor importing products from countries with higher costs of production. It is very difficult to comment on the overall impact of the automobile sector in Kazakhstan automobile market due to formation of Eurasian Customs Union. This is because the strategy adopted by the government can be termed as import substitution and this type of a strategy is not uncommon for developing countries like Kazakhstan. Countries like Malaysia, Indonesia and other countries of Latin America had already used import substitution measures to promote their automobile industry. However, after initial years of promoting domestic production the benefits from these strategies tend to wear out and same can be expected to happen for Kazakhstan. Work Cited Baer, Werner. “Import substitution and industrialization in Latin America: experiences and interpretations.” Latin American Research Review (1972): 95-122. Print. Bhagwati, Jagdish N., Pravin Krishna, and Arvind Panagariya. Trading blocs: alternative approaches to analyzing preferential trade agreements. Cambridge: MIT Press, 1999. Print. Bisenov, Naubet. “Kazakhstan calculating gains from an increase in duties for imported used cars.” Central Asia Online. Central Asia Online, 20 March. Web. 5 September. 2014. Cherunilam, Francis. International Eco. New York: Tata McGraw-Hill Education, 2005. Print. Corden, Warner Max. “Economies of scale and customs union theory.” The Journal of Political Economy (1972): 465-475. Print. De Haas, Ralph and Alex Plekhanov. “Let’s Stick Together: Pros and Cons of the Tripartite Customs Union in the CIS.” European Bank for Reconstruction and Development. EBRD, 1 February. 2010. Web. 5 September. 2014. De Souza, Lucio Vinhas. “An initial estimation of the economic effects of the creation of the EurAsEC Customs Union on its members.” The World Bank. The World Bank, 19 March. 2011. Web. 5 September. 2014. Dragneva, Rilka and Kataryna Wolczuk. Russia, the Eurasian Customs Union and the EU: Cooperation, stagnation or rivalry? New York: Chatham House, 2012. Print. Dragneva-Lewers, Rilka. “Legal Regime of the Belarus-Kazakhstan-Russia Customs Union.” (2012): 1-17. University of Manchester, Mimeo. PDF File. Fei, John C. H., Gustav Ranis, Sheng-Cheng Hu, Yunpeng Zhu and Yün-pʻeng Chu. Essays in Memory of John CH Fei: The political economy of Taiwans development into the 21st century. Edward Elgar Publishing, 1999. Print. Heal, Adam and Teodora Mladenovic. “Kazakhstan’s membership of the Eurasian Customs Union: Implications for trade and WTO accession.” (2014): 1-12. ArtNet. PDF File. Isakova, Asel and Alexander Plekhanov. “Customs Union and Kazakhstan’s Imports.” (2012): 1-20. CASE Network Studies and Analyses. PDF File. Facchini, Giovanni, Peri Silva and Gerald Willmann. “The Customs Union issue: Why do we observe so few of them?” Journal of International Economics 90.1 (2013): 136-147. Print. Jandosov, Oraz and Lyaziza Sabyrova. “Indicative tariff protection level in Kazakhstan: Before and after the customs union (part I).” (2011): 1-7. RAKURS Centre for Economic Analysis. PDF File. Jensen, Jesper and David Tarr. “Impact of Local Content Restrictions and Barriers against Foreign Direct Investment in Services: The Case of Kazakhstans Accession to the World Trade Organization.” Eastern European Economics 46.5 (2008): 5-26. Print. “Kazakhstan Car Market Study 2010.” BRIF Research Group. BRIF Research Group, 2014. Web. 5 September. 2014. Khegai, Dmitriy. “Car import dropped 75-fold in Kazakhstan.” Tengri News. LLP, 3 December. Web. 5 September. 2014. Krotov, Igor. “Customs Union between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation within the framework of the Eurasian Economic Community.” World Customs Journal 5.2 (2011): 133. Print. Michalopoulos, Constantine, and David Tarr. “Are Customs Unions Economically Sensible in the Commonwealth of Independent States.” (2005): 4-30. World Bank, Washington. PDF File. Mogilevskii, Roman. “Customs Union of Belarus, Kazakhstan and Russia: Trade Creation and Trade Diversion in Central Asia in 2010-2011.” (2012): 1-34. University of Central Asia. PDF File. Rozhkov, Dmitry. “Trade in Kazakhstan: Recent Trends and the Customs Union.” IMF Country Report 11.151(2011): 16-26. Print. “Trade in Kazakhstan.” Observatory of Economic Complexity. Macro Connections. 5 September. 2014. Web. 5 September. 2014. Venables, Anthony J. “Winners and losers from regional integration agreements.” The Economic Journal 113.490 (2003): 747-761. Print. Wad, Peter. “The automobile industry of Southeast Asia: Malaysia and Thailand.” Journal of the Asia Pacific Economy 14.2 (2009): 172-193. Print. Wolffgang, Hans-Michael, Gennadiy Brovka and Igor Belozerov. “The Eurasian Customs Union in transition.” (2013): 93-102. World Customs Journal. PDF File. Bibliography Blink, Jocelyn, and Ian Dorton. IB Course Companion. Oxford: Oxford University Press, 2011. Print. 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