Aleksandr Lukashenko attends Supreme Eurasian Economic Council session 

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Presidents of Belarus, Russia and Kazakhstanagreed to move towards the complete removal of all existing withdrawals and restrictions in the Customs Union and the Single Economic Space in the long term in order to launch the Eurasian Economic Union on 1 January 2015. The three Customs Union member states also welcome the accession of new members. These are the results of the Supreme Eurasian Economic council session which took place in Minsk on 24 October.

Before the session started, the three heads of state had discussed virtually the entire agenda. “We touched upon a lot of matters, which are subject to discussion at the narrow format session and at the extended session,” the Belarusian head of state said.

Preparing the draft treaty on setting up the Eurasian Economic Union was the key item on the agenda of the session. “The success of our new integration association and its appeal to other countries will depend on what treaty we will create,” Aleksandr Lukashenko said. In his opinion, it will directly influence the development of mutual relations between countries of the huge region.

The President of Belarus believes it is symbolic that the most significant integration decisions are made in Minsk. The practical operation of the Customs Union of Belarus, Kazakhstan, and Russia began with the adoption of the Customs Code and the unified customs tariffs in Minsk in November 2009.

“Of course, all partners have their own vision of the future. It is normal. However, we have to find the solutions that will suit everyone. We believe it is possible,” the Belarusian leader said.

Being the chairman of the session, Aleksandr Lukashenko touched upon the principles, on which Belarus relies when promoting integration.

According to the Belarusian side, the development of integration should first of all represent advancement in removing any barriers on the way of comprehensive mutually beneficial cooperation.

Aleksandr Lukashenko remarked that unfortunately despite the work that had been done so far the number of restrictions and provisos has not been reduced. In some areas the number has even increased.

“We cannot productively move forward without fulfilling our previous arrangements, without reaching pragmatic or, if you wish, practical goals of integration that we have stated repeatedly,” the President of Belarus emphasized.

The Belarusian head of state believes that there is no need to fear the transfer of ancillary powers to the supranational level in the Customs Union.

“Sovereignty is not an icon. Everything has its price. If we want to have better living standards, something has to be sacrificed. The wellbeing of people is the overriding priority,” the Belarusian leader believes.

According to the President of Belarus, the same is true for the architecture of the future union – the structure of agencies and mechanisms to make decisions. “These components should be understandable, optimal, and, most of all, effective,” the Belarusian head of state underlined. He added that functions of the Eurasian Economic Commission should not be diffused.

“We are not creating an interstate institution but a joint body for state administration that has to see to everyday decisions. And these decisions have to be binding for our entire union,” Aleksandr Lukashenko stressed.

The President of Belarus also drew attention to the relations with partners in the CIS.

“On the one hand, we see Armenia’s interest in joining our integration association. On the other hand, friendly Ukraine is interested in the association with the European Union,” the Belarusian head of state said.

Aleksandr Lukashenko stressed that Belarus welcomes new partners in the Customs Union and suggests elaborating constructive mechanisms for the Troika cooperation with these countries.

“Of course, Belarus welcomes new partners in the Customs Union. It makes the alliance more stable. The door to our association is always open to other countries,” the Belarusian leader said.

“We should understand, however, that Armenia and others need to go the same integration way that Belarus, Kazakhstan and Russia went and take up all the obligations without any withdrawals,” the Belarusian head of state believes.

As for Ukraine, the Belarusian President pointed out the importance that while moving towards the European Union, the country remains open to the Customs Union and the Eurasian Economic Union in the future.

“These are not easy issues, on which we are set to make well-thought decisions today. We should give a clear signal to our governments in what direction we are moving,” the Belarusian head of state said.

“Just like Nursultan Abishevich [Nazarbayev] suggested, we should not quarrel about the disputable issues that we certainly have. We should instruct specialists, governments to promptly work out acceptable solutions, maybe, on the basis of compromises to avoid breaking our agreement concerning further advancement,” the President of Belarus said.

Aleksandr Lukashenko invited his colleagues to speak their minds about topical integration aspects.

President of Kazakhstan Nursultan Nazarbayev also believes it is necessary to remove all withdrawals and restrictions in the Customs Union.

Along with the positive developments in the Customs Union and the Single Economic Space, the President of Kazakhstan mentioned negative things. "We need to talk frankly, in a friendly way, about negative things that we all need to work on," the Kazakhstan leader believes. “In January-July alone Russia exported goods to Kazakhstan three times more than imported. With Belarus this gap is eight times,” the President of Kazakhstan said.

In addition, according to Nursultan Nazarbayev, difficulties persist in access to markets for Kazakhstan products. Our goods face non-tariff technical barriers, excessive sanitary and phytosanitary requirements, certification, licensing and quotas. “Take, for example, meat or milk from Belarus. Sometimes notoriously impassable conditions are created as the standards that are not envisaged in sanitary certificates for our countries are required. Deliveries of Belarusian goods to the Russian market have reduced. So have our meat deliveries,” the President of Kazakhstan stated.

“Expansion of technical regulation is at odds with our policy for improving the business environment. There are problems in the electric power sector. There is no access to consumers and suppliers of electricity. Kazakhstan cannot transit electricity through Russia to sell to Belarus,” Nursultan Nazarbayev remarked.

He also said that entrepreneurs heavily criticize the customs code urging its liberalization, simplifying customs procedures at the external border.

“I believe that the Eurasian Economic Commission should direct its effort towards the elimination of these disparities and barriers to mutual trade," the President of Kazakhstan emphasized.

“The work of the commission is obviously politicized; the resources and efforts are scattered on the expansion of integration,” the President of Kazakhstan said.

“We should prevent the commission from violating the principles and regulations of the work. Sometimes the documents of the commission are submitted for approval a day before a decision should be made. I should also say that the Russian members of the Board take part in the sessions of the Russian government and get some guidelines there, although in line with our agreement, the Commission, the members of the Board should be independent from our governments,” Nursultan Nazarbayev noted.

“We need to finish working on the things that were formalized by the agreements. We signed the agreement on oil and gas transportation, but the matter got stalled, so did the work on railway rates and electric energy. Let us focus on that. Do we need to move forward without fulfilling our previous arrangements? Who is chasing us? We have time,” the head of state of Kazakhstan said.

Speaking about the integration, Nursultan Nazarbayev remarked that the states get involved in this process, first of all, to deal with the issues that they cannot deal with alone. Secondly, the integration association should provide for equal rights.

“Kazakhstan's accession to the WTO is a very serious issue,” Nursultan Nazarbayev said. “We were walking in the footsteps of Russia. We were promised support with the WTO accession. The Bali Conference will take place in December this year. Kazakhstan’s accession could have been formalized then. But it will not happen because we supported the level of protection of Russia. This is probably the issue between Russia and Kazakhstan, but this applies to Belarus too,” he added.

In this regard, the President of Kazakhstan said that the Russian-Kazakh delegation needs to negotiate with the European Union and the United States, "that do not allow us there [the WTO].”

“They insist we join from the positions we defended before joining the Customs Union. In this case we will have a problem with the Customs Union in Kazakhstan,” Nursultan Nazarbayev added.

As for the future of the EurAsEC, the presidents of the Customs Union member states deem it necessary to preserve part of the EurAsEC legal framework as a basis for the functioning of the Customs Union.

According to Nursultan Nazarbayev, the EurAsEC that will cease to function on 1 January 2015 signed several dozens international treaties related to the members of the Customs Union. The President of Kazakhstan suggested extending their validity, adjusting to the Customs Union or signing them anew.

“The question is what to do with the members of the organization [the EurAsEC] that includes Kyrgyzstan and Tajikistan. We need to negotiate it. Maybe, they will be observers, if we do not want to define their status. This organization [the EurAsEC] should be disbanded for sure,” the President of Kazakhstan believes.

According to President of Russia Vladimir Putin, a lot has been done recently in the integration union in terms of codification and improvement of the legal framework. “All this should make the basis of the Eurasian Economic Union,” the President of Russia said.

Vladimir Putin agreed with the position of the President of Kazakhstan and urged against losing the legal foundation on which the Customs Union and other organizations stand. “We can do what Nursultan Nazarbayev has suggested: to adopt part of the legal framework or re-sign it and include in the legal framework of the Customs Union. We cannot just eliminate it [the EurAsEC], because in this case we will undermine the legal foundation of the Customs Union,” the Russian President said.

Speaking about further prospects of integration, Vladimir Putin noted that the Eurasian Economic Union is designed to provide the maximum freedom of movement of goods, services, capitals and workforce.

“I believe that we need to include the long-term objectives of our cooperation into the Eurasian Economic Union Treaty that is the focus of our meeting today. It needs to reflect the new quality of integration compared to the current format of the Customs Union and the Single Economic Space. It should indicate clearly that we will stick to a coordinated policy in key areas of economic regulation,” the President of Russia said.

“It is a pity that we have not materialized some of our plans. I agree with my colleagues that we need to keep working on them and try to achieve the goals we have set. As we agreed at the meeting in Astana, we need to work on the removal of withdrawals. We need to create equal conditions. This implies a tremendous amount of work, and it should be a two-way process. The parties should look for a compromise,” Vladimir Putin said.

According to the Russian President, the parties need to consider the establishment of Eurasian networks in power engineering, transport and telecommunications. “This way we will be able to offer the most favorable terms to fulfill the potential of our economies. Hardly anyone has doubts that regional integration (the entire world is doing it) is the most efficient instrument to maximize internal growth potential and raise the competitiveness on the international market. Together we are stronger and better positioned to respond to global challenges,” Vladimir Putin is convinced.

According to the President of Russia, against the background of the general economic slowdown in the world, Troika’s macroeconomic performance looks quite decent. “No doubt the global economic crisis has affected our states. However, in order to fight off these consequences we need to further strengthen our integration, improve our common market of goods and services as well as doing business conditions,” the Russian President noted.

“Russia is ready for the closest integration cooperation,” Vladimir Putin stressed.

Participants of the meeting also discussed the involvement of new partners in the Eurasian integration association.

“I have heard many say that, for instance, Syria would like to enter [the Customs Union]. Turkish Prime Minister Erdogan has contacted me to ask whether Turkey could be part of the Customs Union,” the Kazakhstan President remarked.

Speaking about the interest of third countries in the cooperation with the Customs Union, Vladimir Putin noted that another major world economy, India, has shown interest. “We just hosted the Prime Minister of India, and he asked me to put this issue on the agenda of our today’s meeting, namely that India would like to consider the possibility of signing a free trade agreement with the Customs Union,” he said.

According to the Russian President, in view of the volume and scale of the Indian market, the development prospects of Asia as a whole, the parties must consider this proposal seriously.

After the long negotiations in the narrow format Presidents of Armenia, Tajikistan, Ukraine and the First Vice Premier of Kyrgyzstan joined the presidents of Belarus, Kazakhstan, and Russia.

Before the extended meeting started, new participants had been informed about the decisions made by the Troika.

In a constructive manner participants of the session discussed the most urgent issues which determine the dynamics and prospects of further integration. The talks were productive. The parties outlined new milestones for the Eurasian economic integration development, confirmed the strategic course for building up industrial cooperation, trade and investment relations.

The codification of the Customs Union and the Single Economic Space is nearing completion. The process of coordinating the text of the Treaty on the Eurasian Economic Union is in its final stage. The sides have a common understanding that the union must pursue balanced macroeconomic and budgetary policies. They also plan to cooperate closer in the issues of employment and infrastructure development, including the establishment of the Eurasian transport and energy networks.

A large number of questions had focused on the development of the Eurasian Economic Union Treaty.

Aleksandr Lukashenko stressed that the discussion was tense but the parties resolved all the issues concerning the treaty, they have come with a common opinion and have made the relevant decision.

“The colleagues and I agreed on what specific instructions will be given to the governments of our countries for the sake of finishing the draft treaty,” the Belarusian leader said.

“We have agreed that we will sign the Eurasian Economic Union Treaty. The Union will become operational on 1 January 2015. To this end, in May 2014 we need to see the draft document and sign it, so that our parliaments will have half a year to ratify it,” Nursultan Nazarbayev said.

The Customs Union welcomes new participants.

The Belarusian head of state remarked that exhaustive and honest answers regarding the Customs Union, the Single Economic Space, and the future Eurasian Economic Union had been given to potential Customs Union member states.

“We have discussed matters concerning the Troika’s future cooperation with Armenia, which said it is willing to be part of the Customs Union and the Single Economic Space, and with Ukraine, which is willing to sign an agreement on association with the European Union,” the Belarusian President noted. “These are very important matters that will greatly affect the development of trade and economic relations in the entire region”.

For this purpose there are plans to create a task force and develop a roadmap for the accession of Kyrgyzstan and Armenia to the Customs Union.

“We have never shut the door on anyone willing to join. If someone shuts the door on his or her own, it will be unnatural. Our nations have too much in common for us to build fences and be separated from each other,” the Belarusian head of state noted.

The President of Belarus underlined that the integration association is open to new members, which share the association’s goals and are ready to undertake the required commitments. “Today’s Single Economic Space is a colossal market with a huge number of consumers. It provides significant opportunities for manufacturing cooperation, the implementation of investment projects, and innovation development,” Aleksandr Lukashenko said.

According to the President of Belarus, the success of the integration project has resulted in the interest of Vietnam, New Zealand, members of the European Free Trade Association, India, Israel, and other countries and economic blocs in establishing free trade procedures with the Customs Union.

Aleksandr Lukashenko stressed that Belarus sees integration as a powerful factor for the dynamic development of countries. “Since the very early stages of integration Belarus has been consistent in believing that integration processes in the post-Soviet space are a blessing for the economic development of their participants and, in the end, for all people, citizens of these countries,” the Belarusian leader said.

“It is obvious for everyone that it is much easier to overcome the crisis phenomena that exist in the global economy together. This is why Belarus speaks in favor of stepping up integration processes in the post-Soviet space,” Aleksandr Lukashenko stressed.

Apart from that, the session tabled matters concerning the model law on competition, the procedure for transporting narcotic psychotropic substances in the Customs Union, the execution of the Eurasian Economic Commission budget, and several other topics. The Troika will also seek to create the common market of high-tech products, to improve the investment and business climate.

Participants of the session adopted the model law which is aimed at the approximation of laws on competition policy of Belarus, Kazakhstan and Russia.

“The decisions that have been made demonstrate the unwavering intention of the Customs Union and Single Economic Space member states to further enhance integration processes in a consistent manner,” the President of Belarus noted.

After the session of the Supreme Eurasian Economic Council President of Russia Vladimir Putin told reporters that Russia is ready to remove all the withdrawals and restrictions in the operation of the Customs Union.

Yet Vladimir Putin stressed that Russia expects its partners in the Customs Union to do the same.

“We understand that it is important for our partners to rule out these withdrawals concerning oil, oil products, and so on,” Vladimir Putin said. “We are ready. It will result in state budget losses for us, but we are ready for it,” he added.

“We expect that our partners will meet us halfway by removing the provisos, which they believe to be important for them,” the President of Russia underlined.

Vladimir Putin remarked that a balance of interests was needed. If provisos in Customs Union rules have to go, then all of them have to be scrapped. “Why do we talk about some concessions? We should move in a balanced manner and taking into account each other’s interests,” the Russian head of state said.

In his words, it will require some time. Kazakhstan has suggested a formula to agree the timeline and steps concerning these exemptions. “We have agreed to it acting upon the belief that it is a sound and professional approach,” Vladimir Putin said.

President of Belarus Aleksandr Lukashenko remarked that Vladimir Putin had set the question the right way. Aleksandr Lukashenko underlined that Belarus was ready to work without withdrawals and restrictions. “Yes, it will mean tougher competition in some areas. But if we ask and demand that our partners should forfeit these provisos, then we should make the relevant steps,” the Belarusian leader said. He added that in this case Belarus will not ask for some period of adaptation.

“Therefore, I believe that within the shortest time possible we will make a decision that will suit the Russian Federation, Kazakhstan, and Belarus,” Aleksandr Lukashenko said.

The three Presidents have agreed to move toward complete removal of withdrawals and restrictions in the Customs Union and the Single Economic Space. “It means that all the existing barriers to the free exchange of goods, services, capital, technology, and workforce will be eliminated,” Vladimir Putin said.

As for the accession of Ukraine to the Customs Union, the President of Russia said that it will be impossible after the country signs the association agreement with the European Union.

Vladimir Putin explained that the association implies the establishment of a free trade area between the EU and Ukraine. Ukraine shall undertake to implement the rules and trade policy of the European Union.

"We believe that such degree of market opening is very dangerous and unacceptable for us at this stage of the development of our economy. We seek to create the Eurasian economic space from Lisbon to Vladivostok, and for this process to be on equal footing, for us not to face economic losses and social problems, it should be well-coordinated, gradual,” the Russian president said.

The Russian head of state drew attention to the fact that Ukraine shall undertake to implement technical regulations of the European Union. According to him, this means that almost all goods produced in Ukraine must be complaint with the EU technological rules. The Russian side believes that this may squeeze the Ukrainian goods to other markets, especially to the market of the Customs Union. “We, therefore, reserve the right to use Protocol No. 6 to the free trade agreement [the CIS agreement of 18 October] to protect our market,” Vladimir Putin said. “This does not mean that we will ban the import of Ukrainian goods to the Russian market. It means that these products will not enjoy preferential treatment within the framework of the free trade area, but the so-called most favored regime. The Ukrainian goods will be placed in the same position as the goods from all other WTO member states,” he noted.

Vladimir Putin noted that an agreement was reached with Ukrainian President Viktor Yanukovich to hold consultations with the Ukrainian partners in accordance with the rules set out in the free trade agreement. "But we reserve the right to apply protection measures," he said. 

Speaking about Ukraine’s plans to sign the association agreement with the EU, Putin said: "We are not for or against. It is not our business. It is the sovereign right of the Ukrainian people, the Ukrainian leadership in the person of the President, Parliament and Government.”

The next session of the Customs Union heads of state will take place in Moscow in December. The meeting had been agreed upon earlier. These will be final talks in this format this year.

The same day President of Belarus Aleksandr Lukashenko met with his Russian counterpart Vladimir Putin.

Aleksandr Lukashenko thanked Vladimir Putin for the visit and support rendered during the session. “We have managed to discuss not so many matters that have yet to be processed. We have made a big step as part of today’s work,” the Belarusian head of state said. Aleksandr Lukashenko remarked that they had managed to advance considerably in many fundamental aspects relevant for the establishment of the Eurasian Economic Union and, most of all, the preparation of the treaty to set up the Eurasian Economic Union.

“We have sketched out its shape. Certainly, a lot of work has yet to be done,” the Belarus President believes. “But what we have done is great. The day before neither you nor I thought that we would be able to advance so far on fundamental issues,” he added.

President of Russia Vladimir Putin spoke in glowing terms about the work done at the session of the Supreme Eurasian Economic Council in Minsk. He remarked that many of the items the presidents discussed on that day had been reviewed by experts.

“As the chairman you have managed to wisely steer the discussion. As a result, we managed to come up with a unified stance on virtually all the items on the agenda,” the Russian President stressed.

On 25 October Minsk will host the session of the CIS Heads of State Council.