On 5 May around 100 activists representing several Kyrgyz nongovernmental organisations held a protest against Kyrgyzstan joining the Russian-led Customs Union. It is not the first time that groups in (potential) member state countries have doubts about this Union.
On 5 May activists of the Kyrgyzstan Against Customs Union Movement, the Reforma and Democratic Alliance parties gathered in the capital Bishkek. During the protest they declared that “Kyrgyzstan’s joining of the Customs Union would lead to the limitation of its political and economic independence.” Meanwhile, Kyrgyz Prime Minister Joomart Otorbaev stated last week that the road map for the country to join the Customs Union “has been practically accomplished” and “will be approved soon by the union’s member states”. Currently, Kazakhstan, Belarus and Russia are members. Armenia is negotiating its membership.
Since the collapse of the Soviet Union, Russia has sought alternative forms of cooperation with the former Soviet states. This started with the Commonwealth of Independent States (CIS), which, according to Olga Shumylo-Tapiola of think-tank Carnegie Europe “did not materialize into something meaningful” and “there is still no trust between CIS members”. After a number of failed attempts to deepen integration three members – Russia, Belarus and Kazakhstan – agreed on a new pact: a Customs Union, which was launched at the beginning of 2010. The goals of this Union were “to eliminate trade and non-trade barriers within the union, and to agree on the common external tariff.” This agreement is the basis for free trade in services and the free movement of capital and labor among Russia, Belarus and Kazakhstan.
Shumylo-Tapiola argues that Russia’s goals with the Customs Union are to regain control over the neigborhood, to be an equal partner for institutions like the EU and to counterbalance China. The Customs Union is the basis for an Eurasian Union, planned to be initiated in May 2014, which is expected to also include a political aspect. This Union will be modelled after the EU and is expected to be launched next year. Russian journalist Vladimir Isachenkov argues that the Eurasian Union is on the top of Russian President Vladimir Putin’s agenda in order to realise his goals. According to Isachenkov, Putin “has sought to lure ex-Soviet nations with cheap energy and loans, while also expanding his military presence in these countries whenever he can.” It seems that Russia’s goals are clear, but what are the motives of the other (potential) member states?
Since 1996 Belarus has had close ties with Russia. The country is ruled by president Alexander Lukashenko, who is often referred to as the last European dictator. For him, the Customs Union is a way “to help ensure the survival of his regime”, Shumylo-Tapiola argues in her paper ‘The Eurasian Customs Union: Friend or Foe of the EU?’ Next to political aspects, Russia was able to help Belarus financially, something the International Monetary Fund and the EU were not willing to do. Although there are benefits for Belarus, at the moment it seems less interested in signing the Eurasian Union agreements. For Belarus the costs of further integration with Russia are rising, there is no progress with Russia in removing the exception it has put on its oil and due to Russia’s performance towards Ukraine, Belarus might be afraid for its own sovereignty. This could be a reason why president Lukashenko proposed to postpone the signing of the Eurasian Union agreements a week ago.
For Kazakhstan other factors were important in joining the Customs Union. The Kazakh economy is doing quite well and president Nursultan Nazarbayev is expected to pass easily the mantle of the presidency to his daughter. According to Shumylo-Tapiola, for him the decision to join “was driven by the ambition to be remembered as the father of this project.” He further wants to counterbalance China, which is also one of the goals of the Union. China’s influence has been growing in recent years in Kazakhstan, something the president wants to oppose.
Currently, many commentators in Kazakhstan worry that the Eurasian integration project is going too far and too fast. Vasily Misnik of the Almaty’s Institute of Political Solutions think-tank is afraid the project is feeding Kazakh nationalist tendencies because in the country “the topic of the Customs Union has turned into a symbol of Russia and all that is Russian.” One year ago president Nazarbayev said there were “no plans to give political functions to the union that would encroach on the states’ independence. The union is about purely economic integration, based on pragmatism and mutual advantage to all states.” However, the Eurasian Union is expected to have a political aspect, which could cause president Nazarbayev to become less favourable towards it.
On 30 April it was announced that Belarus and Kazakhstan will boost their bilateral cooperation in industry, agriculture and education. The meeting took place without Russia.
Armenia has accelerated its membership bid for the Customs Union and announced on 1 March its desire to complete the procedures within two months. Lilit Gevorgyan, regional analyst of think-tank IHS Global Insight, argues that this move could be an attempt to assure Russia that Armenia is pro-Russian integration at a time when questions about the Customs Union, Russian gas deals and the crisis in Ukraine increase and become more critical. According to Gevorgyan this standoff “is certainly making it more difficult for Armenia, heavily dependent economically and military on Russia, to pursue a more balanced foreign policy between the West and Russia.” This became also clear at the official announcement on 1 March. During the speech of Deputy Foreign Minister Shavarsh Kocharian the leader of an opposition party asked why Armenian authorities spent three years negotiating with the EU on an Association Agreement, only to back out at the last moment. A spokeswoman of Catherine Ashton, High Representative of the EU for Foreign Affairs and Security Policy, said that joining the Customs Union is not compatible with bilateral free trade agreements with the EU, which means this door will be closed once Armenia is a Customs Union member.
In the meantime, in recent months the pro-European parts of the Armenian civil society as well as several business associations have expressed concerns over possible economic costs to Armenia’s membership in the Customs Union, which will force a significant increase of the country’s relatively liberal customs tariffs. Some business associations expressed their members’ fears of going out of business under such conditions.
Although the (potential) member states do not agree with all of Russia’s conditions, they depend too much on the country, which makes it highly unlikely that Belarus, Kazakhstan, Armenia and Kyrgyzstan will back out of the Customs Union and the yet to be established Eurasian Union. In the upcoming months negotiations will take place, in order to get as favourable conditions within this union as possible. It remains to be seen to what extent the members will be able to negotiate with Russia.
Sources: Radio Free Europe Radio Liberty I, The Carnegie papers, The World Post, Belarus in Focus, Trade Bridge Consultants, Eurasianet I, Democratic Belarus, Eurasianet II, Radio Free Europe Radio Liberty II, The European Institute, Radio Free Europe Radio Liberty III