BELARUS NEWS AND ANALYSIS

DATE:

20/03/2007

Russia, Belarus fail to sign new trade deal

MOSCOW, March 20 (RIA Novosti) - Russia and Belarus failed Tuesday to sign a new basic treaty removing barriers in mutual trade, Russia's deputy economics minister said.

"Belarus has added a series of proposals to the document initialed by both countries, which drastically amend earlier agreements," Vitaly Savelyev said. "Those proposals require a thorough expert analysis and additional consultations. Therefore, the treaty cannot be signed today."

At talks between the economics ministers earlier Tuesday, Belarus suggested simpler customs arrangements for exports of its trucks and tractors to Russia, Savelyev said, adding the issue needed to be coordinated with Russian customs authorities.

He said Belarus could thereby cause a delay in its sugar supplies to Russia, as the agreement was to be signed in a package with the basic trade deal.

In 2006, Russia accounted for 47.4% of Belarus's overall exports, including basic commodities - heavy trucks, agricultural and household equipment, textiles, sugar, meat, dairy products and vegetables. Energy resources have traditionally dominated the ex-Soviet state's imports from Russia. Bilateral trade grew 26%, year-on-year, to $19.6 billion.

Russia has reportedly demanded that Minsk stop subsidizing its agricultural sector, which has given price advantages to Belarusian producers on the Russian market.

But the deputy minister said the treaty could be signed when the Council of Ministers of the Russia-Belarus Union State gathered in Minsk Friday: "If we manage to coordinate [the changes] shortly, the treaty will be signed."

The two neighbors are building a union in a bid to integrate their economies and political systems, but the process has been complicated by a host of issues, including energy disputes and a tug-of-war between the leaderships.

Belarus was to have adopted the Russian ruble as the union's single currency in January, but the move has been postponed.

Earlier this year, the neighbors were embroiled in an energy dispute after Russia doubled the natural gas price to $100 per 1,000 cubic meters and Minsk in response introduced a transit levy of $45 per metric ton for Russian crude pumped to Europe via Belarus.

Russia briefly halted supplies to Europe, accusing Belarus of tapping its oil transits.

Source:

http://en.rian.ru/russia/20070320/62313963.html