Russia, Kazakhstan launch customs union without Belarus

STRELNA, Russia (AFP) - Russian Prime Minister Vladimir Putin and his Kazakh colleague agreed on Friday to launch a customs union as their Belarussian counterpart failed to show up at a trilateral summit.

Russia, Belarus and Kazakhstan have been in talks to create a customs union that had been expected to come into force on July 1.

Talks on the customs union collapsed last week when the prime ministers said they could not resolve sticking points like car duties and tariffs and that more negotiations were needed.

Belarus's Prime Minister Sergei Sidorsky however did not join Putin and Kazakh Prime Minister Karim Masimov for further talks Friday. Putin said Sidorsky cancelled his attendance at the last minute.

"We agreed to launch the customs code of the customs union on a bilateral basis from July 1," Putin told reporters after the talks with Masimov in Strelna just outside Saint Petersburg.

"Today we've signed a relevant international agreement which allows us to move towards a deeper integration, on a bilateral basis, if required," Putin said, referring to Russia's agreements with Kazakhstan.

He added Belarus was welcome to join the two countries when it was ready.

Putin said during the talks with Masimov earlier in the day that a disagreement with Belarus over oil export duties held up the creation of the customs bloc with Belarus.

"Unfortunately, Belarus did not confirm its intentions to sign joint documents," Putin said.

"There still remains one disagreement with our Belarussian colleagues which is not related to the customs union -- export duties on oil and oil products."

Belarus, which earns vital revenue by refining Russian crude oil, which it then sells abroad, says it sees no reason to pay full export duties for the oil it receives from Russia since the two nations are moving towards the single customs bloc.

Putin said he had spoken to Sidorsky by phone and the prime minister, citing his country's president Alexander Lukashenko, reaffirmed Belarus's interest in continuing the talks.

Sidorsky said Belarus would sign the documents once it sorts out technicalities, Putin said without elaborating.

In a surprise move, Lukashenko, whose ex-Soviet nation is heavily dependent on Russian subsidies, said Thursday that Belarus was ready to give Moscow a controlling stake in the country's top energy assets -- gas pipeline operator Beltransgaz and the Mozyr oil refinery -- in return for lower energy prices.

Russian officials said however that the move did not make much economic sense and gas giant Gazprom said Belarus should pay nearly 200 million dollars in debt for Russian gas supplies before the two countries could continue any energy talks.

Relations between Moscow and Minsk have been under strain in recent years as the two ex-Soviet nations frequently wrangle over energy prices and trade issues.


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