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Central Asia: Eurasian Economic Community Members Discuss Customs Union, WTO Membership

  • Eugen Tomiuc

A summit of the Eurasian Economic Community (EURASEC) was held in Moscow today. Leaders of the five member states -- Russia, Kazakhstan, Belarus, Kyrgyzstan, and Tajikistan -- discussed ways to improve their customs-union agreement and to coordinate efforts to gain accession to the World Trade Organization. The community's Interstate Council extended Kazakh President Nursultan Nazarbaev's term as chairman of the organization and granted Moldova and Ukraine observer status at EURASEC.

Prague, 13 May 2002 (RFE/RL) -- The presidents of five Commonwealth of Independent States (CIS) members held a summit today in Moscow of the newly established Eurasian Economic Community (EURASEC).

Russian President Vladimir Putin hosted the group's Interstate Council meeting attended by Belarusian President Alyaksandr Lukashenka, Kyrgyz President Askar Akaev, Tajik President Imomali Rakhmonov, and Kazakh President Nursultan Nazarbaev.

Moldovan President Vladimir Voronin was also present at the meeting.

The summit's main topics of discussion were improving a customs union among the five member states and coordinating their efforts to join the World Trade Organization (WTO).

Kazakhstan's Nazarbaev, EURASEC's most vocal backer, today saw his term as chairman of the group extended. Nazarbaev also announced that Moldova and Ukraine have been granted EURASEC observer status.

"Today we have made an important decision: Moldova has been accepted as an observer in EURASEC. And as it has been requested by Ukrainian President Leonid Kuchma, we have also decided to grant observer status to Ukraine," Nazarbaev said.

But Nazarbaev said Moldova must bring its legislation in line with that of the member countries before it can fully join the organization.

EURASEC was formed in October 2000, when an agreement on establishing the Eurasian Economic Community was signed at a CIS summit in Kazakhstan. The agreement was ratified in Minsk last year in May.

The Eurasian Economic Community has its origins in a series of free-trade and customs agreements concluded within the CIS, and is structured on the framework of a 1996 customs union.

Russia, Belarus, and Kazakhstan first signed a tripartite customs agreement in 1995, after previous CIS agreements proved largely ineffective.

Kyrgyzstan joined the group the same year, and the four countries signed a Customs Union Agreement and a Treaty on Integration in 1996. Tajikistan joined in 1998.

Russia, far and away the group's dominant economic power, has a leading role within EURASEC. It has 40 percent of the voting rights and is supposed to cover 40 percent of the group's budget.

Kazakhstan and Belarus each have 20 percent of the vote and cover the same percentage of the budget, while Tajikistan and Kyrgyzstan have 10 percent each.

In his remarks, Nazarbaev pointed to what he called the "major achievements" of the group last year. He said EURASEC economies were growing steadily, with gross-domestic-product (GDP) growth rates between 4 and 13 percent, and trade turnover reaching $3 billion.

President Putin also praised the five countries' efforts, saying EURASEC "was gradually turning into a locomotive of integration processes." Putin said that prosperity and progress in the region depend on the group's ability "to cooperate [and] remove barriers on the road to cooperation."

But critics argue that it is precisely this ability that EURASEC lacks. Russian analyst Sergei Blagov, an expert on CIS affairs, told RFE/RL that the member states have a poor record of enforcing previous agreements.

"The previous efforts -- namely the so-called customs unions -- also lacked substance, because even during the period of the customs unions' existence, there were customs disputes and even sanctions among the members of the union. Therefore, it remains to be seen whether these [current] efforts can achieve any substantial results, given the poor record of enforcement of the intergovernmental [customs] agreement among the member states," Blagov said.

Surprisingly, criticism could also be heard coming from some of the group's members. Belarusian President Alyaksandr Lukashenka today complained to journalists that the group had failed to boost trade substantially since its creation.

Lukashenka said despite the proximity of the member states and their Soviet-era ties, only some 25 percent of their overall trade is with one another. He added that the customs agreements are not being "fully and accurately fulfilled."

Analysts say that despite visible efforts by leaders like Putin and Nazarbaev, trade and customs agreements within the CIS are notoriously inefficient.

Blagov said the main cause is the incompetence of the government apparatus in many former Soviet republics.

"While the country leaders could be serious about their intention to bring these member states together, actual officials who are in charge of implementing concrete policies have standards of work well below international standards. So this is probably one of the main reasons why the previous efforts such as customs unions didn't work, and this is why we could be quite apprehensive about the possibility of achieving any meaningful results with these current efforts, such as the Eurasian Economic Community," Blagov said.

The five leaders today also discussed their efforts to gain admission to the WTO, which they called a "chief task facing member countries."

Putin said member states must coordinate their positions in pursuing WTO membership. "All EURASEC members will coordinate positions in the process of admission to the World Trade Organization in accordance with principles of [EURASEC]."

Kyrgyzstan is the only EURASEC member country to have gained accession to the WTO. Blagov said that on some concrete issues, Kyrgyz experience could be useful to Russia, Kazakhstan, or other larger states in their efforts to join WTO.

However, Blagov thinks that Russia, at least, would be better off pursuing WTO membership on its own and not as part of a group. "Kyrgyz experience is unlikely to help Russia a great deal to accommodate the Russian goals with the demands of the World Trade Organization."

The member states today agreed to refrain from anti-dumping measures against each other's products. They also decided to pursue a common border policy and present "a common front" against foreign threats, terrorism, drug trafficking, and other major challenges.

Tomorrow, the presidents are due to meet again at a conference marking the 10th anniversary of a collective security treaty signed by six ex-Soviet republics.