by Russia, Belarus, and Kazakhstan, which form a customs union. By 2010, none of these countries was a World Trade Organization (WTO) member, therefore we focus the analysis on the simple average applied tariff including preferences (instead of the most favored nation (MFN) tariff), which varies between 6.012% for Russia and 6.778% for Belarus (Table 1).<sup>3</sup> The MFN tariff is the border (import) tax rate that one WTO member imposes on imports from another WTO member, unless the country is part of a preferential trade agreement (PTA). The MFN tariff is calculated as a simple and weighted average of the rates available at each product-destination combination. The weights are the share of imports on total imports. The average applied tariff including preferences is the effectively applied tariff. To conduct the analysis, we employ data from UNCTAD and the WTO accessed through the World Bank’s World Integrated Trade Solution (WITS).

The highest level of protection imposed by Russia, Belarus, and Kazakhstan is observed in the sector of motor vehicles for the transport of goods. The import duties corresponding to the products that belong to this category range from 22.5% (HS 870423) to 25% (HS 870422). The weighted average applied tariff ranges between 2.241% for Belarus and 3.728% for Russia. The difference between the simple and the weighted average applied tariff is explained by the particular import structure of the country. The lower weighted average applied tariff for Russia is the result of imports of medicaments, the most important category, which accounts for 3.07% of total imports, and has tariffs that vary between 0% and 10%, depending on the trading partner. Motor cars and motor vehicles is the second most important category, representing 2.67% of total imports, and having no tariff. Electrical apparatus for line telephony or line telegraphy, the category that explains 1.67% of total imports, has tariffs that vary between 0% and 5%. Belarus’s imports are concentrated in petroleum oils and natural gas, which account for 32.65% of total imports. The tariffs for these products range from 0% to 5%. Kazakhstan’s leading imports correspond to tubes and pipes (5.42%) and petroleum oils (5.0%). The tariffs for these goods vary between 0% and 13%, and 0% and 5%, respectively.

Table 1. MFN Applied Tariff and Applied Tariff Including Preferences

||<br>**Applied In**|<br>**cluding Pref**|<br>**MFN**|<br>**applied**|
|---|---|---|---|---|
|**Country**|**Simple Av.(%) **|**Weighted Av.(%) **|**Simple Av.(%) **|**Weighted Av.(%)**|
|Russian Federation|6.012|3.728|n.wto|n.wto|
|Belarus|6.778|2.241|n.wto|n.wto|
|Georgia|0.495|0.387|0.687|1.139|
|Kazakhstan|6.482|3.550|n.wto|n.wto|
|Tajikistan|4.355|5.861|n.wto|n.wto|
|Kyrgyz Republic|3.237|2.292|3.948|4.335|
|Moldova|4.564|2.396|5.107|3.397|
|Note: n.wto: non-W|TO member.||||

Source: Authors’ calculations using data from UNCTAD accessed through WITS (2012).

Georgia, Kyrgyzstan, and Moldova are WTO members and have lower tariffs than Russia, Belarus, and Kazakhstan. The simple average MFN applied tariff varies between 0.687% for Georgia, the country with many of the lowest trade policy barriers of the region, and 5.107% for Moldova. The highest level of protection in Georgia corresponds to products such as wheat or meslin flour, cigarettes, and cane or beet sugar, which face an MFN applied tariff of 12%. In Kyrgyzstan, import duties are high for goods like cane or beet sugar and tomatoes prepared or preserved, which have tariffs of 25% and 20%, respectively. Moldova’s protection is concentrated on cane or beet sugar and peas, with tariffs of 30% and 25%, respectively. Imports from these countries are mainly concentrated in petroleum oils and

> 3 Technically, the simple average applied tariff including preferences should be the same for Russia, Belarus, and Kazakhstan as these countries form a customs union. Differences are explained by the presence of missing values for some product lines.

4