Belarus minimizes customs union fears

On Friday, Belarus diminished the fear by announcing that a new customs union with Russia and Kazakhstan will lead to widespread duty hikes but at the same time they said that in the deal the tariffs on oil will remain at the constant point.

Belarussian Deputy Prime Minister Andrei Kobyakov told the country's parliament that "Significant changes to customs tariff regulation in Belarus, in connection with the introduction of the single customs tariff on Jan. 1, 2010, are not expected."

He also mentioned that under the unified tariff system only 34.1% will get affected of the total volume of goods that are imported.

It was also reported by Kobyakov that only 6.7% of the nation's tariff is likely to increase. It is because Belarus has already harmonized 95 % of its customs tariffs with Russia.

Discussions are in the process for unifying the oil tariffs among the three countries. And along with it a new deal has yet to be struck on the delivery of Russian oil to Belarus in 2010.

"[The oil tariffs] issue must be resolved before July 1, 2010," he said.

On Wednesday, Energy Minister Sergei Shmatko said that oil contracts with Belarus will be a turning point for Belarus granting Russian investors access to its oil infrastructure. Government sources reported that the proposition amounted to "blackmail."

Kobyakov said Deputy Prime Minister Igor Sechin will soon visit Minsk to discuss about the privatization plans. "At the moment, a working group led by [Belarussian First Deputy Prime Minister] Vladimir Semashko and Igor Sechin is carrying out active consultations."

Negotiations are meanwhile in progress between Belarussian and Russian companies on how to increase oil transit volumes through Belarus.

Many parts of Central and Eastern Europe suffered from energy shortages in January 2007 during a dispute between Belarus and Russia over transit fees. "There is enough time, I think, to reach a deal," said Kobyakov. "The heads of government are willing to negotiate."

Russian dealers show huge concerns over opening the boundaries of both the countries. They said that it could lead to a flood of used cars from Belarus in the first half of 2010.The unification of duties for private individuals will need to be agreed to under a separate deal by July 1, 2010.

Russia decided to raise duties on trucks, combine harvesters, machinery and electric motors in return for Belarus' tariff hike.The three sides are scheduled to meet in St. Petersburg on Friday to discuss technical and health regulations for the customs union.


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