DUSHANBE, May 19, 2009, 2009 – The first session of the working group of experts from the CIS states for negotiations on a draft agreement on free trade zones (FTZs) within the CIS area was held in Minsk, Belarus yesterday, according to the CIS Executive Committee press service.
The draft agreement has been worked out by the Russian Ministry for Economic Development. Yesterday’s meeting brought together representatives from Armenia, Azerbaijan, Belarus, Kyrgyzstan, Moldova, Russia, Tajikistan and Ukraine. Experts from Kazakhstan and Uzbekistan did not attend the meeting.
The meeting participants decided to ask the Russian Ministry for Economic Development to review the draft agreement taking into account their proposals and submit it to the CIS Executive Committee before June 15 this year for sending to the CIS states.
A free trade zone (FTZ) or export processing zone (EPZ) is one or more special areas of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments. It is a region where a group of countries has agreed to reduce or eliminate trade barriers. Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.
Most FTZs are located in developing countries. Bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive. Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the area”s economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).
