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Minsk Wants Free-Trade Zone With EU

First Deputy Prime Minister Uladzimir Syamashka
MINSK (Reuters) -- Belarus has pressed forward with its bid to improve ties with the West by calling for a free-trade zone with European Union within three to four years.

Deputy Prime Minister Uladzimir Syamashka said it would take a decade or more for a new former-Soviet customs union, including Russia, Belarus, and Kazakhstan, to win membership of the global free-trade body, the World Trade Organization (WTO).

Long accused of human rights violations in the West, Belarus has been moving closer to the EU since quarreling with traditional ally Russia in 2007 over energy prices.

The 27-member EU has lifted some punitive measures on Belarus in the past year and officials in Minsk said this week they had asked the bloc for financial assistance.

Semashko, addressing parliament on June 26, said creating a free-trade zone with the EU was the government's chief aim.

"The maximum achievement would be the creation of a free-trade zone," he said in a report on the government's activity. "If we move forward in normal fashion, we can form such a free trade zone in three to four years."

Semashko said such a zone would lower customs duties and create favorable trade terms.

He also said Belarus expected the EU to overturn a 2006 move to scrap preferential trade tariffs on grounds the country mistreated its trade unions.

Semashko said that in talks with the European Bank for Reconstruction and Development (EBRD) and EU foreign policy chief Javier Solana "it was my understanding that Belarus will return to the system of preferential trade at the beginning of 2010."

The EU has made no pledges on restoring trade privileges, but it invited Belarus to attend its Eastern Partnership summit last month with postcommunist states.

Invited To Summit

The invitation followed concessions by Belarus, including the release of detainees considered political prisoners and an election deemed more democratic than previous contests. The EU also suspended an entry ban on President Alyaksandr Lukashenka and other officials.

Belarus, meanwhile, has been caught up in a series of spats with Russia, which some analysts have linked to Minsk's rapprochement with the West.

The two countries last week resolved a "milk war" in which Russia briefly banned Belarussian dairy products. But at the same time, Russia's gas-export monopoly Gazprom demanded Belarus pay $230 million in arrears for gas.

Semashko said he believed it would take some time for any joint membership WTO bid by ex-Soviet republics to be processed.

"Russia has been trying to enter the WTO since 1993. We are now launching a new cycle over 10-12 years or more," he said. "This is a long process, a difficult process. And we have to get ready for it."

Belarus, he said, saw WTO membership as advantageous, though it had not withdrawn its individual bid for membership.

"This is to our benefit. It is beneficial to join the WTO in a single pool," he said.

Russia remains the biggest economy outside the 153-member global trade body. Russian Deputy Prime Minister Igor Shuvalov told Reuters this week the United States and EU were to blame for Russia's failure so far to secure membership.

Russian officials believe a joint WTO membership can be achieved by mid-2011 at the latest.

Analysts are less optimistic.

"The idea of joining the WTO in a single three-country bloc amounts to a diplomatic refusal by Russia to observe WTO rules and hold talks," said Yaroslav Romanchuk of the Mizes think tank. "It means, in effect, that Russia is not moving ahead on membership. Belarus, with its open economy, needs WTO membership and appears to want to distance itself from the Russian idea."

The head of the WTO, Pascal Lamy, expressed confusion this week over the joint membership bid and said it was unclear whether Russia could join the body in that form.