Publication: Eurasia Daily Monitor Volume: 5 Issue: 22

On January 25, the prime ministers of Russia, Belarus, and Kazakhstan signed nine trade agreements. These addressed export customs duties, unified customs and tariff regulations, unified rules to determine the countries of origin of goods, unified measures of non-tariff regulation, anti-dumping and protective measures, determination of customs values, customs statistics, technical and sanitary controls, and taxation of imports and exports (Interfax, RIA-Novosti, January 25).

The Kremlin urged all other members of the Eurasian Economic Community (EEC) to join the customs union along with Russia, Belarus, and Kazakhstan. “We expect other members of the Commonwealth [of Independent States] to join the customs union,” Russian Prime Minister Viktor Zubkov said after the meeting. He described the documents signed among the three countries as an “important move” toward further multilateral economic integration (Interfax, RIA-Novosti, January 25).

Belarus Prime Minister Sergei Sidorsky declared the EEC meeting in Moscow to be a “breakthrough.” He also suggested discussing the creation of common EEC energy and transportation markets and developing biotechnology cooperation. The next level of multilateral cooperation would involve creation of a Customs Union Commission, Sidorsky said (Interfax, RIA-Novosti, January 25).

However, even EEC officials conceded that the Moscow meeting turned out to be just another move toward the stated goal of a customs union. On January 25, EEC Secretary-General Tair Mansurov noted that the signed agreements represent only nine of the 29 issues to be resolved before the trilateral customs union can be created. The EEC meeting in Moscow also discussed multilateral transportation cooperation, he added (Interfax, January 25).

EEC member states include Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, while Armenia, Moldova, and Ukraine have observer status. Moscow has a 40% share in the EEC voting and financial rights; Kazakhstan, Uzbekistan, and Belarus have 15% each; while Kyrgyzstan and Tajikistan have 7.5%.

Yet despite optimistic official pronouncements, the Russian media have voiced doubts over the economic viability of the EEC plans and questioned the motives of the participants. Integration into the world economy, notably the World Trade Organization, is more important for Moscow than closer ties with neighboring states, RBK Daily commented. The daily also pointed out that the nine agreements on the customs union were signed only by Russia, Belarus, and Kazakhstan; WTO-member Kyrgyzstan, as well as Tajikistan and Uzbekistan, remain reluctant to join.

In the meantime, even the customs union among Russia, Belarus, and Kazakhstan may take another three or four years to materialize, due to remaining conflicts of interest, it said. The union may become an economically viable institution only if Kazakhstan is granted equal rights to transit its energy resources to Europe, and Belarus is given equal access to Russian oil (RBK Daily, January 24).

The meeting also reviewed several innovative ideas put forward by Kazakhstan’s leadership. Kazakhstan’s Prime Minister Karim Nasimov suggested holding a major business forum in Astana to discuss the creation of a Eurasian Economic Union, an idea first suggested by Kazakhstan’s President Nursultan Nazarbayev. Nasimov also suggested forming a Eurasian scientific club and Eurasian new technology bank in order to coordinate and finance joint projects. The EEC states have sufficient resources to pursue promising joint projects without relying on external financing, he told the meeting (Interfax, January 25). However, participants apparently made no decisions regarding Kazakhstan’s initiatives.

In the meantime, the Moscow meeting also revealed that the EEC member states remained divided over a variety of issues. Other draft agreements – on Central Asian water resources, currency policy, investment promotion and protection – were dropped from the meeting’s agenda, according to Tajikistan’s Prime Minister Akil Akilov (Interfax, January 25).

Simultaneously, the Kremlin used the Moscow meeting as an opportunity to push bilateral projects. Zubkov hailed cooperation with Kyrgyzstan and told Kyrgyzstan’s Prime Minister Igor Chudinov that Moscow would continue to respond positively to Kyrgyz requests for economic or military assistance. Zubkov also pledged to develop trade, investment, and energy ties with Kyrgyzstan, but he recommended pursuing multilateral EEC projects as well (Interfax, RIA-Novosti, January 25).

In response, Chudinov promised to grant Russia’s gas giant Gazprom licenses to develop hydrocarbon resources soon. “We have high hopes to cooperate with Gazprom,” he said, adding that actual exploration may start as soon as March 2008. He also suggested pursuing bilateral cooperation in building the Kambarata-2 hydropower plant (Interfax, RIA-Novosti, January 25; see EDM February 1).

The meeting also discussed the issue of migration. Kyrgyzstan’s Chudinov suggested improving the regulatory framework EEC citizens face when traveling throughout member states. “Conditions should be created to allow citizens to visit other EEC countries without registration,” he insisted (Interfax, January 25). In other words, Kyrgyzstan and other Central Asian states apparently tried to lobby on behalf of their labor migrants working in Russia, but Moscow refrained from any concrete commitments.