ICPS holds roundtable on “Customs Union, WTO and EU FTA”

Russia continues to play its traditional role as the driver of integrational processes in the Eurasian region and continues to “collect land.” In July 2010, Russia moved one more step in the direction by launching a customs union with Kazakhstan and Belarus. This is the theme of the latest issue of Inside Ukraine, a monthly published by the International Centre for Policy Studies (ICPS), presented on 28 July 2010.

For Ukraine, the dilemma is that that the country cannot simultaneously set up a Free Trade Area with the European Union and join a Customs Union with Russia, Belarus and Kazakhstan. What’s more, joining the Customs Union also violates Ukraine’s commitments as a member of the WTO.

Ukrainians are largely convinced that, sooner or later, their country will have to choose between the EU and Russia. Given this mistaken notion, the more active work of the Ukrainian Government in the Russian integration arena automatically slows movement towards the European Union. Despite the President’s optimistic announcements about signing an Association Agreement by the end of this year, negotiations stalled the minute talk switched from discusing general issues to agreeing concrete commitments.

Nor can the newly-formed integrational entity involving Russia, Belarus and Kazakhstan be really considered a proper customs union, since it does not meet the majority of principles for such an entity to function, including:

• more than 400 exceptions restrict the free movement of goods;
• customs controls are being retained at the borders between member countries;
• non-tariff trade barriers such as quotas and subsidies are being maintained.

In short, the new integration project is not even a free trade area, the simplest form of integration there is, as it does not, in fact, do away with internal duties and tariffs on imported goods.

Through sheer inertia, Russia is once more going down the path of the 18th and 19th centuries, building relations in the post-soviet region on the basis of a “colonial metropolis.” In a modern, globalized world, colonial relations are ineffective: the cost of maintaining colonies becomes greater than any benefit from doing so and, inevitably, contains the seeds of future conflict and imperial collapse. In fact, Russia is setting up delayed-response mines along all of its own borders, first with Georgia and Kyrgyzstan and then with Kazakhstan and Belarus. Now Moscow is stubbornly working to set the biggest mine of all, Ukraine, whose eventual explosion Russia will have a very hard time surviving.

Russia is the biggest integrational center in the Eurasian region and has embodied this particular mission for several centuries. Still, times change and what worked once upon a time can be very destructive today. Right now, Russia has a unique opportunity to develop a new integrational platform with Ukraine, following modern European principles.

You can download the July issue of Inside Ukraine at: http://www.icps.com.ua/files/articles/58/35/Inside_Ukraine_ENG_10.pdf