RUSSIA TAKES STEPS TOWARD CUSTOMS UNION.

The Russian government announced yesterday that it had approved a draft agreement with Belarus on coordinated price policy. A key provision of the agreement allows Russian oil companies to sell crude oil and oil products to Belarus firms at domestic Russian market prices. Belarus would be required to ban re-export of that oil to third countries. In addition, a decree by President Boris Yeltsin yesterday lifted Russian customs controls on Kazakh cargoes at the Russian-Kazakhstan border. Only third-country cargoes transiting Kazakhstan will be subject to customs controls in the future. The decree also orders development and implementation of a plan to establish "joint customs controls on the outer borders of Customs Union member states." (6)

Barring hidden strings, Belarus and Kazakhstan should hail recent developments. The two countries have sought such trade arrangements since joining the January 1995 agreement concerning the formation of a Russia-Belarus-Kazakhstan customs union. After the agreement was signed, however, Russia continued to impose oil price differentials on Belarus and maintain customs barriers against goods from Kazakhstan. The timing of the concessions may be related to the CIS summit scheduled for January 19 in Moscow.

Grachev Pushes Closer Security Relations with Ukraine.