Customs Union States Strengthen Economic Integration, As Kyrgyzstan, Ukraine Seek Closer Ties

ASTANA – The creation of the Customs Union (CU), the Common Economic Space (CES) and the Eurasian Economic Union remains a priority and offers great potential to move the region forward economically, the heads of state participating in last week’s sitting of the Supreme Eurasian Economic Council in Astana agreed. The presidents of Belarus, Kazakhstan and Russia, Aleksandr Lukashenko, Nursultan Nazarbayev and Vladimir Putin respectively, participated in a May 29 meeting in the capital of Kazakhstan and were later joined by Kyrgyzstan President Almazbek Atambayev and Ukrainian President Viktor Yanukovich who both also expressed interest in closer cooperation with the three countries that have advanced the most in terms of integration.

“We are pleased with the results of the meeting,” President Nazarbayev said as he added that the presidents of the CU countries will meet twice more in 2013. They will meet in Minsk at the end of October and in Moscow in December.

Following last week’s talks, the heads of state signed a number of documentsadopting changes in the regulations of the Eurasian Economic Commission’s activities in international negotiations on trade. These documents, as President Nazarbayev said, will enable the member states of the Customs Union to cooperate actively and to expand its circle of trading partners. According to Nazarbayev, this is an important step towards a closer integration of the countries concerned.

In addition, the presidents adopted the concept of a coherent agricultural policy for the CU member states and set out measures for the establishment and development of the integration of the information system relating to trade within the Customs Union. They also concluded an agreement on informational cooperation in the field of statistics.

New directions of integration, including the activity of the Eurasian Economic Commission in the field of development of cooperation mechanisms between parties, as well as perspectives on the participation of Kyrgyzstan and Ukraine in the work of the Customs Union, were also discussed in Astana.

“The creation of the Customs Union, the Common Economic Space and the Eurasian Economic Union is a complex issue. Such questions could not be solved in a single day. There are inconsistencies and in some cases failure to comply with the decisions we made and discontent with trade and interaction between the businesses. These issues are natural and will be solved as we progress. The most important thing is that we have the political will of the heads of state,” President Nazarbayev said as he summarized the meeting.

The Eurasian Economic Union is scheduled to launchJan.1, 2015. On May 1, 2014, the union’s package of documents should be introduced to the heads of state, Nazarbayev said.

“We agreed that our integration will be implemented step by step. Now the main goal is to eliminate all hindrances in the Customs Union and the final formation of the Common Economic Space. Based on this, we will decide on further deepening of integration processes. I would like to emphasize this is a purely economic integration. It is based on pragmatism, the mutual benefit of all states and the union as a whole,” Nazarbayev stressed.

“We are confident that this is beneficial for all parties involved in the integration process, not only in terms of increasing commodity production but also in terms of occupying a worthy place in a developing world and in the current difficult economic situation,” President Nazarbayev continued.

Kazakhstan is estimated to receive a profit of US$16 billion by 2015 from its membership in the CU. The CU could also significantly shorten the distance and time traveled by goods from China to Europe. According to analysts at the Institute of Economic Forecasting of the Russian Academy of Sciences, the creation of the Customs Union between Belarus, Kazakhstan and Russia will stimulate economic development and has the potential to provide an additional 15 percent GDP growth for the participating countries by 2015.

Nursultan Nazarbayev also stressed that Kyrgyzstan has applied for accession to the Customs Union.

“We have already established a working group to develop a road map. [for Kyrgyzstan’s joining the CU]. Ukraine has expressed an interest in obtaining an observer status within the framework of the Customs Union and the Common Economic Space as well as the Eurasian Economic Union. In this regard, the presidents of Kyrgyzstan and Ukraine have been invited to this meeting. We support their intentions and all the necessary documents will be prepared so at the next meeting of the Supreme Council we can approve them,” Nazarbayev said.

In addition, at a separate joint briefing relating to last week’s meeting, Nursultan Nazarbayev and Viktor Yanukovich stressed the economic viability of the Customs Union.

“Our economies have had close ties since the Soviet era. They are complementary. The growth of trade between the two countries leads to the creation of new job opportunities and facilitates preparation for global competition. This is of critical importance for the Customs Union and the Common Economic Space. I want to stress again that no transfer of political functions to supranational bodies affecting the independence of the states, is planned. This is an exclusively economic integration,” Nazarbayev said.

Yanukovich also said all the decisions taken at the meeting are based on consensus and it is an important principle of the Customs Union.

The President of Ukraine said a memorandum on the country’s participation in the work of the Customs Union as an observer will be signed at the Commonwealth of Independent States summit in Minsk.

“Ukraine’s bid for observer status in the Eurasian Economic Union was supported by the decision of the Council of Heads of Member States of the Customs Union and Common Economic Space. Moreover, at the meeting, I also participated in a discussion on the formation of future economic policy in the framework of integration associations because in the core of the economic policy are issues that affect the interests of Ukraine,” Yanukovich said.

President Nazarbayev also held a bilateral meeting with President Putin. Regarding bilateral Kazakhstan-Russia relations, President Putin expressed the hope that a comprehensive treaty on good-neighborliness and alliance, currently under development, will be signed this year.

“We can see how much personal attention you pay to the development of Russian-Kazakh relations. Due to this direct participation, our relations are developing very quickly and efficiently, and our trade volumes are growing. You definitely are the leader in the integration processes,” Putin told his Kazakh counterpart.

The Customs Union within the Eurasian Economic Community is a form of trade and economic integration among Belarus, Kazakhstan and Russia that provides a single customs territory. Within that union, the mutual trade of goods is not subject to customs duties and economic restrictions, with the exception of special protective, antidumping and countervailing measures. In this case, the member states of the Customs Union share a common customs tariff and other common measures regulating trade with third countries.

At the moment, the common customs territory includes the territories of Belarus, Kazakhstan and Russia, as well as artificial islands, buildings and other objects located outside of the territories of the Custom Union states, in respect of which the member states shall have exclusive jurisdiction.