ROAR: Customs Union strives to become “a geopolitical reality”

As the Customs Union of Russia, Belarus and Kazakhstan is not expected to start working on schedule, the three countries may still find a compromise, analysts believe.

The news that the union will not begin to operate on July 1 was announced by Russian Prime Minister Vladimir Putin on May 22 after the heads of the three governments failed to resolve the main issues that hinder the creation of the organization.

The Customs Union became formally effective on January 1, 2010. However, it has been expected to become a full-fledged organization in July with the common Customs Code coming into effect.

Russia is concerned about its auto and aerospace industries, while Kazakhstan is apprehensive about the private import of goods. Belarus is interested in removing Russia’s duties on oil and oil products.

If Moscow and Astana are still ready to make certain concessions, Minsk abandoned any compromises long ago, media say. Belarus wants to get rid of oil duties so much that this task may be more important to it than the entire project of the union, observers note.

Despite the difficulties, Putin stressed that the union is growing beyond the economic format and is becoming “a geopolitical reality.” He went further, saying that the Customs Union’s members are able to reach a new level of integration, establishing a Common Economic Space by 2011.

However, “it is the bilateral relationship between Russia and Belarus that demonstrates the existence of serious systematic problems inside the organization,” said Evgenia Voyko of the Center for Political Conjuncture.

“Moscow and Minsk have not managed to remove disagreements regarding Russia’s oil supplies to Belarus, which is seriously limiting the expansion of the Customs Union in the post-Soviet space,” the analyst said.

The union may even start operations this summer without Belarus, although it is “the least desirable option,” Vedomosti daily said. Minsk may be offered to join the organization when it is ready to accept the conditions of its work, the paper said.

There have been proposals to create the union only with Kazakhstan at the first stage, the daily noted. It was that country’s initiative to establish such a union, the paper added. “President Dmitry Medvedev supported the idea, but when it came to details, it occurred that the countries saw the tasks of the Customs Union in a different way,” it wrote.

“For Russia, it is a geopolitical project, and for Kazakhstan and Belarus it is rather a pragmatic project,” an anonymous official close to the presidential administration told the paper.

When the three countries’ leaders had abandoned the principle “politics above economy,” it became clear that the integration should be based on economic rather than political compromise, believes Aleksey Vlasov, director of the Center for Post-Soviet Studies.

Another political analyst, Sergey Mikheev of the Center for Political Technologies, believes it is premature to speak about the failure of the Customs Union. Integration in the European Union lasted for 50 years, and it started with politics concerning the relations between France and Germany, he told the paper.

Vremya Novostey daily described the disagreements within the union as “a conflict of brotherly interests.” At the same time, for Belarus, economic benefits are “more important than the union,” the paper noted.

But the absence of mutual understanding in the process of creation of the organization "may provoke more tensions in relationship between Minsk and Moscow,” the daily said.

“Minsk does not comment on the results of the premiers’ meeting,” the paper noted. “It is not ruled out that officials will refrain from comments until Belarusian President Aleksandr Lukashenko speaks on this.”

Yet the outcome of the last prime ministers’ meeting was predictable because, prior to it, Minsk made it clear that it would strongly defend its interests, the daily said. The problems in the union may force Russia to pursue more pragmatic policies, it noted. But if Moscow exerts pressure on Belarus, it may provoke a sharp reaction from Minsk, it added.

Further participation in the union may become a bargaining chip for Minsk, the daily opined. At the same time, the union has not only economic, but also a political importance for Russia, believes political scientist and former deputy of the Belarusian parliament Olga Abramova. “Moscow may not allow this project to become a fiasco because of the position of the Belarusian side, for it is a matter of image for Russia,” she told the daily.

Despite the problems with the creation of common customs territory of the union, its Customs Code will come into effect on July 1, Kommersant daily said. “It is President Dmitry Medvedev’s decision, and there have been no orders to abrogate it.”

But the “partial” introduction of the documents of the Customs Union may lead to the problems with the application of national legislation, the daily said. So, difficulties in the Russian administrative reform have emerged because part of it has been integrated with the documents of the united customs space.

Gazeta online newspaper is rather skeptical about the prospects of the Customs Union “As the project starts, Russia is not ready to fulfill all the economic requirements of its partners,” it said. “And Belarus and Kazakhstan in the future will not miss its opportunity to liberalize the trade with Russia to the maximum and receive preferences for the idea of the Customs Union.”

Russia will constantly have to pay for “the partners’ loyalty,” and any refusal to satisfy their financial requirements “will lead to stagnation or failure of Russia’s geopolitical projects with former Soviet republics,” it said.

However, “the political project” of the Customs Union may still succeed, believes political scientist Yury Solozobov. It was difficult to expect that its realization would go smoothly, and “the working structure” would immediately emerge, he told Regnum news agency.

The Union should be based on an energy agreement, he noted. “The European Union emerged from the Coal and Steel Community, and our organization, undoubtedly, should be the union of pipelines and hydrocarbons,” he said.

Tactical maneuvers linked to the coordination of the countries’ positions have been practically completed, and the governments cannot afford further concessions without provoking discontent in their countries, the analyst added.

Also, the Customs Union should have clear goals and allies to be successful, the analyst believes. So far it has not found friends among mid-level officials in the three countries, but already has “enemies” connected with energy companies, lobbyists and nationalists.

There have been articles in the Belarusian media saying that the country “may be happy with the European Union,” the analyst said. Others stress that Minsk may “hang” the union to find more preferences, Solozobov noted, adding that “Minsk may really torpedo the agreement on the Customs Union.”

However, it would be more productive to concentrate not on “the increasing appetite of Minsk,” but on “the most valuable strategic union that has appeared now in the post-Soviet space, that between Moscow and Astana.”

The two countries “may move this formation further” as the political project of the Customs Union ”has entered the stage of political struggle,” the analyst stressed.

Sergey Borisov,
Russian Opinion and Analysis Review