Interviewed by Maria Sidelnikova, exclusively to Vestnik Kavkaza
In the case of signing an association agreement with the EU by Ukraine, Russia does not see the possibility of applying customs tariff of the Customs Union to Kiev, Deputy Prime Minister Igor Shuvalov said. "According to the agreement of Ukraine with the EU on most goods mentioned there, zero tariff rate is applied. This is about 95 % of the goods , which will be supplied to the territory of Russia ... In Ukraine there is no way for the agreement to join the Customs Union and adopt a common customs tariff, and then start negotiations with all countries of the CU on measures of compensation. This can involve all the countries of the Customs Union in the endless years of negotiations on the level of regulation. This means that there will be no Customs Union", Shuvalov said.
But Kiev is more optimistic about this. "After the signing of the agreement with the EU, Ukraine could become the only state in the world that has a trade on the one hand with the largest economic entity , such as the European Union, and on the other hand - with a huge Eurasian space - the Customs Union”, the Minister of Foreign Affairs Leonid Kozhara hopes. "As for the fact that January 1, 2015 this association will reach a higher level of integration, and the subject of cooperation will be the Eurasian Economic Union, we also accept it as an objective factor of economic relations. Now Ukraine's government and business vigorously adjust their actions to ensure that in bilateral trade with the EEC there are no barriers”, Prime Minister Nikolai Azarov said . “Integration projects should not be opposed to each other. Rather, it is necessary to find the best ways of interaction."
Yevgeni Korchevoi, director of the Analytical Center "WTO-Inform", told VK about these and other contradictions within the CU.
- Yevgeni Anatolievich, as we know, this year Kazakhstan enters the WTO. Russia completes its accession to the organization. And Belarus is not yet there. What will happen to the Customs Union? Is there a contradiction here? How should Belarus behave in this case?
- Indeed, it will be very difficult to unite countries that have different obligations. This is one of the contradictions that will not break the Customs Union but have a significant negative impact on the internal processes of integration. Relatively speaking, uniting a planned state economy, which is in Belarus, with a completely liberal economy, which is in Kazakhstan, with the kind of mix that exists in Russia, is very difficult. But to be honest, I think this is not the main problem in the integration process, because the internal environment is different, but it can be aligned: you can change the law and move slowly to certain common rules of competition in the market, on subsidies or something else. But the fact that there are external obligations, and these obligations are different for all three countries, Kazakhstan comes with obligations and liabilities that differ from the Russian ones, and Belarus does not have them, and nobody even knows what they will be when Belarus enters the WTO, it will certainly have a very negative affect on the CU. Here is an example: Kyrgyzstan, the Kyrgyz Republic, wishes to become a member of the CU. It is next to Kazakhstan, they can make a single customs territory. But 10 years ago Kyrgyzstan joined the WTO with zero customs duties, it is the obligation of Kyrgyzstan. And when Kyrgyzstan joins the Customs Union, this commitment cannot be broken. This means that all other countries should establish the same liberal regime that exists in Kyrgyzstan. Or look at what is happening now to Ukraine - another candidate member of the CU. The contradiction is quite obvious that it is impossible to be a member of the association with the EU and have a free trade agreement with the EU and at the same time be a member of the CU with the obligations that an agreement on the CU implies. And one more thing: in the world, there is a general trend that countries are not so eager to work in the WTO, but in the last 20 years the formation of inter-regional and regional integration has been underway. These associations are much more effective: first, you can align certain conditions more quickly, neighborhood contacts influence this, cultural ties are developing rapidly, so, of course, regional integration associations in the world in the future have much greater potential for the future and development of the economies of individual countries than an instrument such as the WTO.
- In general, might the aspirations of Ukraine and Armenia to trade more with the EU than with us somehow affect our economic relations?
- Absolutely. Of course. If Ukraine has certain obligations to its partner - the EU - they may be different in respect of the goods, and at the same time we have preferential trade with Ukraine, it is clear that someone has to reconsider something. It will directly affect our relations. But in general, to be honest, if we consider the situation with the entry of Ukraine and Armenia, in principle (Ukraine is closer to the EU), signing a free trade agreement, then, in principle, this is just a gamble like Russia’s entry into the WTO. There is literally no economic benefit for Ukraine in the signing of this agreement.
