Trade policy of Belarus in the CIS region: specific model or country specific trade policy for a small open economy

The working paper critically examines trade policy of Belarus in 2006-2010 in the context of national, regional and international trends of economic activity. The paper analyses basic features of import substitution industrialization relevant for Belarus. There are summarized basic trends of Belarus’ trade, the level of country and commodity diversification of Belarus’ export and import, and the main risks and opportunities for the trade policy of Belarus. The analysis covers period of 2006-2009 when the main factors affecting present trade and trade policy of Belarus showed up. These factors include deterioration in terms of Belarus’ trade due mainly to sharp increase in the price for imported Russian natural gas and crude oil, strengthening trade discrimination by Russia against the most sensitive commodity groups, initiation of administrative reform and privatization of national champions, implementation of country diversification policy in trade to reduce risks in trade with Russia, participation in the Customs Union with Russia and Kazakhstan and consequences of global economic crisis. The trade balance deficit and pure macroeconomic performance of trade, currency policy of the Central Bank which supports real appreciation of national currency, low country diversification of trade which increases risks of economic damage coursed by protective measures of trade partners, high dependence on natural resource import to supply export production and domestic demand, deterioration in terms of Belarus’ trade with the main trade partners are among the main challenges of Belarus’ trade. The specifics of tariff and non-tariff regulations in Belarus are presented in the paper. The National strategy of import substitution and the National export development strategy, as well as basic instruments of Belarus trade policy were considered in the research. Two main options of regional trade integration for Belarus, in particular, closer integration with the CIS countries or intensified integration with the EU were taken into a consideration.