Russia, Belarus, Kazakhstan agree on customs bloc

MINSK (AFP) - The presidents of Russia, Kazakhstan and Belarus reached a deal Friday to create a customs union among their three ex-Soviet states from July 1 next year.

"This is a very significant and long-awaited decision, resulting from difficult negotiations," Russian President Dmitry Medvedev said, quoted by Russian news agencies in the Belarussian capital.

"The switch to a joint economic zone is a completely new economic format," he said, adding that the customs bloc would be open to other members in the future.

"From July 1, the single customs union will start to function on the territory of Russia, Belarus and Kazakhstan," Belarussian President Alexander Lukashenko said.

He added the three leaders will meet next in the Kazakh city of Almaty on December 18 to hammer out a timeline for setting in place common tariffs and launching the customs union.

Russia's First Deputy Prime Minister Igor Shuvalov said the accord marked the start of difficult talks, which would result in the three states relinquishing decision-making power to a "supranational body".

For his part, Kazakh President Nursultan Nazarbayev estimated that the creation of the new trade bloc would push up by 15 percent the gross domestic product of each of the three countries by 2015.

Kazakhstan's Central Asian neighbors Tajikistan and Kyrgyzstan have already announced their intention to accede to the union, he added.

Russia's Prime Minister Vladimir Putin in June shocked the World Trade Organization (WTO) by saying that Russia would apply to join the trade organization as a single customs union with Belarus and Kazakhstan.

Moscow has since adopted a more nuanced approach, suggesting that each country would pursue membership with the WTO separately, despite an effort to coordinate the timeline of their accession talks.

But Shuvalov, speaking after Friday's signing, reiterated that Russia, Kazakhstan and Belarus would strive to join the WTO "on the same terms and at the same time".

Russia is the sole remaining major economy not to be integrated in the WTO system. Tortuous talks on joining started in 1993, but the United States called Russia's accession into question after its war with Georgia in August 2008.


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