Expert: Customs union will work within Kazakhstan and Russia

Customs import duties on foreign cars will not be raised from July 1, because such a decision ahead of the presidential elections is dangerous for Alexander Lukashenka, economist Leanid Zaika who heads the Minsk-based Strategy think tank, told the European Radio for Belarus. He said: "Cars will become more expensive ahead of the presidential elections. Who will like such a president and who will vote for him? Lukashenka realizes that. When he said: "Give us oil", it was clear that if Russia gives, he will quietly agree on the Russian import duties for foreign cars".

We remind that the six-hour talks in Moscow on the Customs Union last Friday ended with nothing. Belarus stills wants to buy cheap oil, while Russian wants to protect its car-making and aviation industry.

The Russian business daily Kommersant reports that the documents prepared by experts on the Customs Union were not signed bcause of the stance of the Belarusian side. Belarus firmly stands on its position and does not refuse from its desire to buy cheap oil and petrochemical products.  

But Russia reckons that the problem of oil duties has nothing to do with the agreements on the Customs Union. As a result, the meeting between Belarus, Russia and Kazakh prime ministers last Friday ended with nothing. 

Talking to reporters, Vladimir Putin did not even mention the lawsuit from Belarus over customs duties on oil and petrochemical products. But Belarus PM Sergei Sidorski, standing nearby, rushed to remind him about it. Putin said: "I would like to make it clear that the issue of the volume of goods imported by physical entities is very important to Kazakhstan. For us, car-making industry is important... Our Belarusian colleagues have their own interests, e.g. export duties..."

Sergei Sidorski: "Oil and petrochemical products..."

Economist Leanid Zaika says that if Belarus buys oil at domestic Russian prices, the Belarusian "oligarchs" could make $3-4 billion by re-selling the cheap oil and petrochemical products. This is almost the amount close to what Belarus borrowed from the International Monetary Fund ($3.6 billion). "The whole idea was: "Give us oil and we will earn $4 billion, and then we will join the Customs Union"", says Zaika.

According to reports, Russian deputy prime minister Igor Shuvalov even suggested during the meeting last Friday that Belarus might join the Customs Union of Russia and Kazakhstan later. Leanid Zaika reckons it is totally possible. "The real customs union will work within the border of Kazakhstan and Russia. They decided not to give up to Lukashenka's provocations and not to be hostages of tiny Belarus. They decided to make the union, while Belarusians will join later", according to Zaika.

The three countries agreed to continue working on disagreements within the next weeks. The Customs Code is expected to come into force on July 1. 

However, negotiations could countinue within the next several months and the date could be shifted to October 1, according to an unknown Russian official close to the situation, reports the Russian newspaper Vedomosti.