Azerbaijan has signed ten bilateral free trade agreements and one preferential trade agreement, six of which have been notified to the World Trade Organization (WTO):
- Turkey, Baku, February 25, 2020 (came into force on March 1, 2021)
- Uzbekistan, Tashkent, February 26, 1992
- Russia, Baku, September 30, 1992
- Moldova, Minsk, May 26, 1995
- Ukraine, Baku, July 28, 1995
- Georgia, Tbilisi, March 8, 1996
- Turkmenistan, Baku, March 18, 1996
- Kazakhstan, Almaty, June 10, 1997
- Kyrgyz Republic, Moscow, January 12, 2004
- Belarus, Minsk, March 31, 2004
- Tajikistan, Baku, July 13, 2007
Main features of bilateral agreements in Azerbaijan
The following are the main features of those bilateral agreements:
- Elimination of customs tariffs and other charges on the import and export of commodities originating in one contracting party’s customs jurisdiction but intended for another contracting party’s customs area. The parties might agree on exemptions and revise the agreement on an annual basis.
- Rules of Origin
- Rules governing anti-discrimination measures and the implementation of national treatment and preferential treatment
- Parties are required to avoid quotas and other quantitative constraints. When such limits can be enforced, there are some exceptions to these rules and conditions. The Agreements also give the parties the option to impose quantitative constraints if they agree.
- The importance of using a standardized system for customs classification, as well as the establishment of collaboration between the countries’ customs administrations.
- Policy coordination on export controls
- Provisions relating to unfair commercial practices and anti-competitive behavior
- The right to unrestricted access to public transportation
- The right to take steps necessary to protect the parties’ critical interests. All bilateral agreements contain such provisions, the application of which has an extraordinary character, to preserve national security, public interests, human, animal, and plant life, copyright, and so on.
- Dispute resolution through negotiating
Despite their commonality, each agreement has unique clauses that are not reflected in the others. The Free Trade Agreement with Russia, for example, includes clauses allowing parties to establish trade representatives in the counterparty’s territory, as well as prohibitions on subsidies and government support that distort the free trade environment.
Agreement on the establishment of free trade areas between members of GUAM
On July 20, 2002, the agreement was signed and on December 10, 2003, it became law. Georgia, Ukraine, Azerbaijan, and Moldova are all signatories to the agreement. The parties are only permitted to use bilateral agreements if they do not conflict with the conditions of the Agreement. Third parties are welcome to join the agreement.
The agreement covers both products and services commerce, as well as intellectual property rights protection.
The Agreement’s core elements are the elimination of customs duties and other taxes and charges with a similar effect, the prohibition of new quantitative restrictions and any charges after the Agreement’s enforcement (with some exceptions), the application of a national treatment, and most-favored-nation treatment, the determination of reasonable charges for import-export operations (fees for licenses, clearance, testing, inspection, and so on), and the harmonization of customs procedures, exemption from the application of value-added tax and excise tax to commodities originating from any party to the Agreement’s territory, elimination of export subsidies and subsidies that lead to unfair competition, the establishment of free transit conditions, and mutual liberalization of the services sector.
The Agreement also includes provisions for non-discriminatory government procurement and reciprocal liberalization in this area. Parties also agreed to include provisions in the Agreement relating to general and indirect exemptions arising from security issues. Another intriguing feature of the Agreement, included in Article 15, is the reference to the use of GATT 1994 provisions when using anti-dumping, countervailing, and safeguard measures.
In terms of dispute resolution, all disagreements between the parties must be resolved through discussions or a process established by the Working Body. If the above-mentioned processes fail to resolve the disagreement, the party who has been affected as a result of a violation of the Agreement’s terms may withdraw from the Agreement’s obligations and employ measures equivalent to compensate the amount of the damage. The parties might also use international legal tools to address disputes within the terms of the agreement.
