The presidents of Russia, Belarus and Kazakhstan reached an agreement on Friday, November 27, to create a new customs union with common customs regulations. The agreement on the union will come into effect on January 1, 2010, when the three countries will start using common foreign trade tariffs, with all taxes to be coordinated by July 1, 2010.
"Our end goal is to create a single economic space, and the customs union is a major step towards it," Belarusian President Alexander Lukashenko said.
According to Russian newspaper The St. Petersburg Times, which cites Russia's first deputy prime minister Igor Shuvalov, about 92 percent of the new tariff regime is based on current Russian duties. And as Russia has, on average, the highest tariffs of the group, this means that Kazakhstan and Belarus will be raising duties on a wide swathe of items.
"We had to agree with our partners on lowering certain customs tariffs on certain groups of goods, and our partners had to raise certain tariffs," Mr. Shuvalov stated, adding that Kazakhstan had to raise tariffs on more than 5,000 items.
Meanwhile, Russian President Dmitry Medvedev repeated his assertion that entering the customs union would not affect Russia's plans to join the World Trade Organization. "There are two options: either enter [the WTO] with the customs union, which no longer exists only on paper, or each country can enter with the agreed-upon positions, but separately," he said, adding that both options were acceptable.
Russia, the sole remaining major economy not to be integrated in the WTO, has been trying to join the organization since 1993.