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Customs Union Agreed With Belarus, Kazakhstan

Published: December 1, 2009 (Issue # 1531)


MOSCOW Russia, Belarus and Kazakhstan on Friday gave the go-ahead for the creation of a united customs union, whose tariff regime will be based largely on the one that Russia currently has in place.

President Dmitry Medvedev met with his counterparts Alexander Lukashenko and Nursultan Nazarbayev in Minsk on Friday, where they agreed to the creation of a unified customs tariff, which will start Jan. 1, as well as a unified customs code, which will go into effect July 1.

This is a very significant and long-awaited event, which has come into being through very difficult negotiations, Medvedev told a news conference after the meeting, Interfax reported.

About 92 percent of the new tariff regime is based on current Russian duties, First Deputy Prime Minister Igor Shuvalov said.

And as Russia has, on average, the highest tariffs of the group, that means that Kazakhstan and Belarus will be raising duties on a wide swathe of items.

We had to agree with our partners on lowering certain customs tariffs on certain groups of goods, and our partners had to raise certain tariffs, Shuvalov said, adding that Kazakhstan had to raise tariffs on more than 5,000 items.

This is a difficult process. It was necessary to make compromises in order to ensure all the decisions could go into effect starting Jan. 1, he said.

But with Russia as the largest external market for both Belarus and Kazakhstan, raising tariffs remains a lucrative bet for both countries.

The creation of the customs union of Belarus, Russia and Kazakhstan will allow the three countries to raise their gross domestic product 15 percent by 2015, Nazarbayev said. A common market with a GDP of $2 trillion will be attractive for investors.

Nevertheless, there are still several sore points remaining in the formation of a unified customs tariff, said Alexei Portansky, head of the information office for Russias WTO bid.

These sore points will affect the economies of each of the three countries for example, the customs duties on cars in Belarus, which are lower than those in Russia, Portansky told The St. Petersburg Times.

The countries still havent agreed to a set of automobile tariffs, but the Russian side is concerned that the tentative plan for duties would lead to a flood of used cars from Belarus and Kazakhstan and crush the domestic auto market.

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