Customs Union talks fail

Russian Prime Minister Vladimir Putin told reporters that import duty rates on automobiles, the import of goods by individuals and export duties were stumbling blocks.

The Customs Union will hardly begin its full-fledged operation on July 1 as originally scheduled, as Belarus, Kazakhstan and Russia have failed to agree on its Code, Russian Prime Minister Vladimir Putin told reporters following the talks on Friday, BelaPAN reports.

On May 21, the heads of government of the three countries held lengthy talks in Russia’s St Petersburg in an attempt to resolve disputes on customs duties.

“We have agreed that the talks about the ratification of the Customs Code should continue at the level of experts in the next two weeks,” RIA Novosti quoted Mr. Putin as saying following the meeting.

Mr. Putin said that import duty rates on automobiles, the import of goods by individuals and export duties were stumbling blocks.

He said that the first issue was sensitive for Russia, the second for Kazakhstan and the third for Belarus.

Belarusian Prime Minister Syarhey Sidorski said that Russia’s export duty on deliveries of oil and petrochemical products to Belarus was, in particular, a major sticking point.

Mr. Putin said that the negotiations would continue. “This is a serious matter. It should not be handled in a rush,” he said.

“We have offered a preference to Belarus, giving it 6.3 million tons of crude oil for internal consumption duty-free,” he said. “Our colleagues want us to offer a greater preference. But this is a different story.”

Besides, Minsk is worried about Russia’s natural gas price that is to reach average European levels for the country in 2011 under a bilateral agreement, Mr. Putin said. “In 2008, our Belarusian friends asked us to keep the price and discounts at that year`s level, and we consented to this in 2009. They then promised that they would make two steps upward later.”

“Belarus currently pays Russia a unilaterally set price equal at the 2008 level,” he said. “They underpay us, a certain debt has amassed. But this is the problem of economic entities and I hope that it will be solved at this level.”

On Friday, a spokesman for Russian natural gas monopoly Gazprom warned that Belarus’ debt to Gazprom might reach $500 million to $600 million by the end of the year.

Reports have had it that Belarus currently pays $150 per 1000 cubic meters of Russian natural gas, lower than the contract price that was raised by Gazprom from $121.98 in the fourth quarter of 2009 to $169.22 in the first three months of this year.

The Customs Union began formal operation on January 1, 2010. The three countries say that the establishment of the Union is a step on the way to set up a common economic zone, initially scheduled to come into existence on January 1, 2012.

In an interview with broadcaster Mir TV following the talks in St Petersburg, Mr. Putin emphasized the need to accelerate work on the establishment of the common economic zone.

“To make it work, two packages of agreements need to be prepared,” he said. “One should be ready by this July and the other by the end of 2011. I propose that we should prepare both of them by the end of 2010.”

The Russian premier suggested that the documents could be signed promptly to make it possible for the zone to come into existence earlier.

He acknowledged that the Customs Union "cannot come into full force" by its previously planned July deadline.