OREANDA-NEWS. The session of the Supreme Eurasian Economic Council on the level of the heads of state took place in Novo-Ogarevo, Moscow Oblast, 5 March 2014

The establishment of the Eurasian Economic Union should be based on the full-fledged Customs Union without any exemptions, Belarusian President Alexander Lukashenko said at the session of the Supreme Eurasian Economic Council on the level of the heads of state that is taking place in the official residence of the Russian President in Novo-Ogaryovo on 5 March.

“Our principled position is the following: the Eurasian Economic Union should be based on the full-fledged Customs Union without exemptions, in particular, without duties, quantitative restrictions or anything else,” Alexander Lukashenko said.

The Belarusian head of state pointed to the two things that are crucial for Belarus when it comes to the Eurasian Economic Union. “First of all, we should achieve tangible results in our integration project. One of the targets is to complete the formation of the Customs Union that will have no restrictions and exemptions. We have made the biggest progress here. Only a few exemptions are left, but these exemptions apply to very sensitive commodities, like alcohol, tobacco, medicines, oil and gas. We need to make a principled decision on them,” the President of Belarus said.

At the same time Alexander Lukashenko noted that some started linking the abolition of exemptions on commodities to the abolition of exemptions on services, capital and workforce. “The freedom of movement of goods should become an example for us in addressing other matters related to these freedoms. Otherwise, the future economic union will have no solid foundation. Simultaneously, we keep working on the provisions that were formalized in the basic agreements of the Single Economic Space,” the Belarusian leader believes.

Speaking about the draft agreement, Alexander Lukashenko noted that Belarus' position on the individual provisions of the institutional part of the document was voiced during the previous meeting of the heads of state in Moscow. Experts are working now to harmonize it.

Speaking about the functional part of the document, the Belarusian President noted that although the work was intensified, only 70-80% of the document has been prepared, the same as by the time of the previous meeting. The partners made little headway in reconciling their positions on the most sensitive commodities. “This pertains to the formation of the common energy market, liberalization of the road transportation market, access to the gas transportation system, subsidies for agriculture. The partners keep putting forward new suggestions that can wash out the existing arrangements,” the Belarusian head of state said.

Alexander Lukashenko suggested focusing efforts on improving the legal framework of the SES provided all the three partners agree with the new suggestions. If someone objects, the partners should include the existing provisions related to the SES into the draft agreement without any changes in order to avoid any setbacks. Otherwise, the preparation of the agreement might drag on for a long time and the commissioning of the Eurasian Economic Union will be delayed,” Alexander Lukashenko said.

The Belarusian leader remarked that the session had been initially scheduled for mid-March. “But after work in Astana experts encouraged us to address a number of issues at our level in order to let them work more actively. Contrariwise, they said we will not be able to create this powerful legal mechanism for our economic union by the middle of this year,” the Belarusian head of state remarked.

The Belarus President also remarked that the effort to create the Eurasian Economic Union should not repeat the sad experience of the formation of relations in the Commonwealth of Independent States. “We talked a lot about the CIS. People expected us to use the CIS to enable normal relations and a union. We failed to do that. And people are now concerned about the situation repeating itself with regard to the Customs Union and the Single Economic Space,” the Belarusian leader remarked. “Therefore, we just don't have a choice. We should prepare and sign the treaty within the declared time limits. Otherwise, people will fail to understand us,” he added.

Alexander Lukashenko went on saying that the events going on in the world encourage the sides to take faster steps on the way of Eurasian economic integration. “Perhaps, we should mind our business, our nations instead of other things. Then we will be respected and valued,” the Belarusian President is convinced.

In turn, Kazakhstan President Nursultan Nazarbayev spoke in favor of ending the disagreement and of creating an economic union. “We will create all the other things later on. Let's keep the issues that cause some misunderstanding inside our countries out of the mix. Let's deal with economic matters. We can approach our differences gradually to remove them,” the Kazakhstani leader said.

Nursultan Nazarbayev suggested holding another session of the Supreme Eurasian Economic Council in April one month before the Eurasian Economic Union Treaty has to be signed in order to adjust the views.

“Naturally the agreement that we have to make any decisions by consensus still stands. Therefore, in order to move on, we should come up with these consensus decisions and go forward instead of waiting on the spot for all the issues to be fixed,” President of Russia Vladimir Putin agreed.

Vladimir Putin deems it necessary to grant extensive powers in economic regulation to the future Eurasian Economic Union. According to the Russian President, this will allow conducting a common and harmonized policy in the key industries, secure the stability and enhance development potential of the national economies, bring about a powerful common market and the inflow of additional investments.

Vladimir Putin said that the institutional part of the agreement should define the international legal status and organizational framework of the future union and to set forth its operation principles.

The functional part of the document is aimed to regulate economic interaction mechanisms. “It is important to guarantee the so-called four freedoms - the freedom of movement of goods, services, capital and workforce, to formalize obligations to remove the remaining exemptions and restrictions in the Customs Union and the Single Economic Space,” the President of Russia said.

In his words, the Eurasian integration is already bearing fruit. He cited data suggesting that despite the economic slowdown worldwide, the trade between the three partner states slightly increased to make up USD 64.1 billion. The structure of the mutual trade is improving; the share of raw materials in export/import transactions is decreasing. The interests of the business community remain the priority of the integration effort.

Chairman of the Board of the Eurasian Economic Commission Viktor Khristenko, who was also present at the session, delivered a report about the progress in preparing the agreement at various levels. “We have every chance of signing the treaty on the Eurasian Economic Union in May the way we were instructed. I think in April we will be able to suggest the choices that you need to make final decisions for,” the Chairman of the Board of the Eurasian Economic Commission noted.

The Eurasian integration union is open for cooperation with all countries. In his words the Eurasian Economic Commission has started drafting a package of free trade agreements with a number of states. About 40 proposals on signing such agreements were submitted, including from the European Free Trade Association, Vietnam, Israel, India, Chile and Peru.

At the session the Troika also discussed the interaction with Ukraine in the current situation.

“The extraordinary situation in Ukraine is alarming. The Ukrainian economy is in a difficult state, or we can even say in a crisis. The Customs Union market may be adversely affected by this, which is why I suggest we think together which measures we could take to protect our companies and exporters and work out the framework of our further cooperation with Ukraine,” the Russian President said. Vladimir Putin noted that Ukraine is the Customs Union's key economic partner. “We are united by close industrial and trade ties. Ukraine is a member of the CIS free trade zone,” he said.

“Of course we should do our utmost to help our partners find the way out of this situation in which they have found themselves,” the Russian leader added.