Minsk slightly freezes Eurasian integration to make Kremlin more cooperative
The Belarusian authorities have failed the Eurasian integration deadlines in order to strengthen their bargaining position with Moscow. Minsk and Moscow have not resolved a wide range of bilateral issues; including the oil and gas dispute. The Belarusian authorities are unlikely to have any principled objections to the interstate integration document and may sign it immediately after Russia makes counter-concessions.
President Lukashenka has approved the draft agreement on the Customs Code of the Eurasian Economic Union as a basis for negotiations.
The Belarusian authorities used the last available argument and slightly froze the Eurasian integration in order to advance their interests in the Kremlin. According to the Belarusian Foreign Ministry, President Lukashenka did not sign the Customs Code, but the decree on the negotiations about the draft Code. On December 26th, 2016, in St. Petersburg, four heads of the EEU states, Armenia, Kazakhstan, Kyrgyzstan and Russia, signed the EEU Customs Code. By not being present at the ceremony of the signing of the Code, President Lukashenka demonstrated his extreme discontent with the increased uncooperativeness of the Kremlin on crucial issues.
Until now, Belarus and Russia have not resolved several substantial issues: the price of gas and repayment of the due debt from 2016; resumption of the oil supply to the Belarusian refineries; waver of the 'visa barriers’ for foreigners at the Russo-Belarusian border. Last week, the parties only agreed on the tariffs for the Russian oil transit through Belarus. That said, under the pressure from Russian negotiators Minsk was prompted to curb its appetite for tariffs significantly.
Minsk regards the EEU as Putin’s integration project, the symbolic importance of which will increase before the 2018 presidential elections in Russia.
Minsk has no serious objections to the content of the EEU Customs Code and is likely to sign it as soon as the Kremlin makes concessions and guarantees to resume oil supplies and reduces price of the Russian gas.
According to Decree No. 221 of June 23rd, 2017, deadlines for the completion of foreign trade operations have been extended from 90 to 180 days for exports and from 60 to 90 days for imports. Delayed payments entailed a fine up to 2% of the transaction cost for each day of the delay, but could not exceed the total cost of the transaction. Most companies, when working with new counterparties, require a deferred payment for a period of three to six months. Due to the new regulation, violations are likely to reduce in number, so as the fines. Trade enterprises are likely to expand the assortment list due to the supply of new products in small lots, and the assortment list of exported Belarusian goods could expand, too. The new terms for completing foreign trade transactions would enable medium and small companies on the foreign trade market, exporters and importers are likely to grow in number and the geography of export-import operations could expand.