September 2014

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Trade in services between CU Member States

Amount of trade in services in 2013: • Russia – Kazakhstan – 3 192 mln US Dollars  Import to Russia – 968 mln US Dollars  Export from Russia – 2 223 mln US Dollars

• Russia – Belarus – 3 537 mln US Dollars  Import to Russia –2 065 mln US Dollars  Export from Russia - 1 471 mln US Dollars

Export from Russia to Belarus Rail transport 9.06%

Road transport

15.45%

Travel

2.22% 10.59%

2%

2.47%

Construction Financial services

4.08% 17.88%

7.53%

Operational leasing Technical services and engineering Telecommunication

8.43% 7.27% 7.59% 6.43%

Air transport Computer services

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Import to Russia from Belarus Rail transport 20.00%

15.14%

Road transport

Travel

1% 1.63%

Construction 10.00% Operational leasing

4.27% 4.46% 16.74%

7.31%

Engineering and technical services Telecommunication Air transport

12.39%

3.88% 3.18%

Computer services

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Export from Russia to Kazakhstan Rail transport 8.93%

1.43% Construction Travel

24.60%

28.71%

3.50%

Services incidental to agriculture, mining and manufacture Insurance services Operational leasing

2.87%

Engineering and technical services 4.17% 3.44% 5.39%

Telecommunication 7.51% 2.15% 3.27%

4.05% 1.00%

Water transport

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Import to Russia from Kazakhstan Rail transport 9.20%

1.30%

10.16%

3.53%

Construction Travel

7.48%

Engineering and technical services Operational leasing

3.86% 1.13% 5.69%

Telecommunication

7.95%

47.74%

Road transport Consulting services

1.97%

Accounting and bookeeping services

Common market of services| 7

According to the Treaty of the Eurasian economic union, Member States undertake a commitment to create and provide all necessary conditions for the functioning of common market of services.

The services suppliers will be given the following opportunities:  the right to supply services without establishing of additional juridical persons;  the right to supply services with the permission of its own state;  mutual recognition of qualifications of services suppliers. • • • •

By means of: gradual reduction of existing exemptions and restrictions of Member States; harmonization of national legislation; recognition of qualifications and licenses; cooperation between competent authorities.

Common market of services| 8

According to the Treaty of the Eurasian economic union Member States endeavor to spread the rules of the common market to the maximum number of services sectors. All services sectors are divided into the following groups: • 1 group - services sectors in which rules of common market will start working from January, 1 2015 (for example, advertising services, courier services, management consulting service, placement and supply services of personnel, entertainment services). • 2 group - services sectors in which rules of common market will start working after a transitional period in accordance with the plans of liberalization (transport, telecommunication and financial services, construction, engineering services and health related services can be put into this group). • 3 group - services sectors in which common market will not function (for example, for reasons of national security). At the moment the work on the separation of services sectors has not been completed yet.

Common market of services| 9

Overview of specific sectors - financial services (the harmonization of legislation in the field of banking,

insurance services and services on the securities markets, a single supranational body for the regulation of financial markets, coordination of actions between Member States); - transport services (common transport policy 2020 “Time for Action”, the program of gradual liberalization of road freight transportation for 2016-2025, coordination of actions between Member States ); - services related to energy sector (the creation of common electric energy market up to July,1 2019, gradual establishment of common gas market and the creation of common oil and petroleum market up to January,1 2025).

Trade in services with third countries  Member States coordinate their actions although there is no supranational competence in this sphere.

Main tracks for cooperation| 10

Trade in services between Russia and Israel (in USD mln) 1200

1166.243

1100 1000

941.221

900 800

777.923

700

596.352

584.399

638.794

600 500

387.531

445.187

400

388.037

363.676

300

254.101 200 100

162.553

151.354

176.454

217.832

217.069

222.899

245.277

0

2005

2006

2007

2008

Export of services from Russia to Israel

2009

2010

2011

2012

2013

Import of services from Israel to Russia

Main tracks for cooperation | 11

Trade in services between Belarus and Israel (in USD mln) 20

18.99 18

16.11 16

16.27

14 12 10

11.65 8.79

6.95

8

7.84

9.43

8.31

8.58 6

10.38

8.82

8.46

7.25

5.9

7.78

4 2 0 2005

2006

2007

2008

2009

2010

Export of services from Belarus to Israel Import of services to Belarus from Israel

2011

2012

Common market of services: main tracks for cooperation| 12

Trade in services between Kazakhstan and Israel (in USD mln)

25

20

19.75 16.16

15

13.13

12.16 10.36

10

9.97 5

4 2

4.07

2.28

2.22 2.99

0.87

2.52

3.26

1.07

0 2005

2006

2007

2008

2009

2010

Export of services from Kazakhstan to Israel

Import of services to Kazakhstan from Israel

2011

2012

Main tracks for cooperation| 13

• The main services sectors in Russian-Israeli trade in services are "Travel" for personal reasons, "Other Business Services" (especially technical testing and analysis services, scientific research and development, consulting services in the field of management), transport services, telecommunication and computer services. • In bilateral trade in services between Belarus and Israel the priority sectors are practically the same as between Russia and Israel. • Bilateral trade in services between Kazakhstan and Israel is characterized by interaction only in such sectors as other business services (architectural, engineering and other technical services) and computer services.

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Key areas for cooperation between Member States and Israel may be: • • • •

Computer services Medical services Services related to agriculture Construction services

Main tracks for cooperation| 15

Free trade agreements (chapters on trade in services and investments) Israel has included a services chapter only in one of its free trade agreements (with Columbia in 2013). Member States are right now in process of negotiating agreements which include such provisions. In general, services and investments chapters of FTA can ensure:  more liberalised, in comparison to WTO obligations, commitments on market access of services and services suppliers;  more liberalised conditions for the establishment of companies and their activities on the market of each other;  the support of joint investment projects;  the protection and promotion of investments (especially if agreements on the protection and the promotion of investments are not concluded as between the Russian Federation and Israel).

For additional information

The official site of the CU and the SES: www.eecommission.org