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Meeting of the presidents of Russia, Belarus, and Kazakhstan

November 18, 2011, The Kremlin, Moscow

Dmitry Medvedev, Nursultan Nazarbayev, and Alexander Lukashenko discussed integration in the Eurasian region and signed a number of joint agreements.

The three presidents signed the Declaration on Eurasian Economic Integration, the Treaty on the Eurasian Economic Commission, and the Resolution on the Eurasian Economic Commission Regulations.

The Declaration of the Presidents of Belarus, Kazakhstan and the Russian Federation announces the transition to the next stage of integration: the Common Economic Space (CES).

The Declaration states that the CES is based on the principles of compliance with universal norms of international law and that in their practical cooperation the CES states are governed by the rules and regulations of the World Trade Organisation and confirm the importance of all three states’ accession to the WTO.

The Declaration states the following main directions of further integration: ensuring the effective functioning of the common market for goods, services, capital and labour; the formation of a coherent industrial, transport, energy and agricultural policy; further harmonisation of national legislations; strengthening cooperation in the monetary sphere and in area of economic security.

Further integration also involves the improvement and growth of supranational institutions, the development of cooperation in the sphere of foreign policy on issues of mutual interest.

The Declaration states that the CES, at any stage of its formation and operation, will be open for accession by other states that share the goals and principles of the Union and are ready to implement them.

The Declaration also states that the parties will strive to complete by January 1, 2015 the codification of international treaties that make up the legal framework of the Customs Union and Common Economic Space, and on this basis to create the Eurasian Economic Union. This work will include agreements on a balanced macroeconomic, fiscal and competition policy; structural reforms of the labour, capital, goods and services markets; the creation of Eurasian energy, transport and telecommunications networks.

Reaffirming their commitment to further strengthen all-round mutually beneficial and equal cooperation with other countries, international integration organisations, including the European Union, with the option of creating a common economic space, the Presidents of Belarus, Kazakhstan and the Russian Federation stressed in the Declaration the benefits of coordinating efforts of the Customs Union and CES on the harmonisation and mutual convergence of the integration processes in the Euro-Atlantic and Eurasia.

Mr Medvedev, Mr Lukashenko, and Mr Nazarbayev gave a joint news conference following their talks.

* * *

News conference following meeting of the presidents of Russia, Belarus, and Kazakhstan

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Ladies and gentlemen, colleagues,

This is a big event, an event that took us a lot of time and effort to reach. Today’s meeting indeed has every chance of becoming one of this year’s key occasions.

We have just signed the Treaty on the Eurasian Economic Commission, the Declaration on Eurasian Economic Integration, and the Regulations. This marks our latest and big step forward towards establishing the Eurasian Economic Union, the grouping that will unquestionably play a big part in shaping our countries’ future.

“Since the Customs Union began work it has already boosted our economies’ investment attractiveness and is encouraging economic modernisation, which is a paramount goal in today’s world.”

I want to start by thanking my colleagues. I thank Mr Nazarbayev, who, to be perfectly honest, was the initiator behind this whole idea back during the difficult 1990s, when the word ‘integration’ was seen as a leftover from Soviet-era vocabulary and a sign of poor taste. But for all of the obstacles in the way back then, Mr Nazarbayev spared no effort in his calls to build and develop integration in the post-Soviet area. This took a long time, but steady effort always helps to accomplish even the most complicated tasks. What we see today is the result of this work that went on at many levels, work the historic significance of which I hope will win the appreciation it deserves now and in the future. 

I want to thank sincerely Mr Lukashenko for his persevering efforts to further integration and his energetic work throughout the Customs Union’s establishment, when he urged us to quicken the pace and assured us that we would succeed and settle all of the tasks ahead. This had a big influence on everyone taking part in the complex negotiations. Actually, it was Mr Lukashenko who proposed meeting today to sign these agreements. I hope he will not mind my divulging this information. He called me and said, ‘The plan is to sign the agreements in December, but this event is more important than the other matters on the December meeting’s agenda, so let’s hold the signing as a separate event. That way we can bring it forward and move straight on to the ratification procedures’. Mr Lukashenko called me, I thanked him, and Mr Nazarbayev also supported this idea.

And so I want to thank my colleagues sincerely for their hard work. I also want to thank all of our government colleagues who worked with such intensive energy over this difficult time, overcoming on the way the various bureaucratic hurdles such as exist in every country and coming up with the creative and at the same time compromise-based proposals that ultimately enabled us to conclude the agreements we have signed. This was a major undertaking. We have been steady and consistent in working towards our goals.

I remind you that as of July 1 this year, the Customs Union between Belarus, Kazakhstan, and Russia has been working in full-fledged operation. Work continues today to improve its mechanisms and strengthen its legal foundations. As I discussed just now with my colleagues, this union is not merely about making the paperwork easier, creating new organisations, or even simplifying regulations, but is something that has given a real and substantial boost to our reciprocal trade. Our trade is growing rapidly, which is very good to see. This was our goal, the objective we all pursued. Our aim is to make our economies work better.

“The next step is the establishment of the Eurasian Economic Union by 2015. If the conditions are right we will move quicker.”

Starting on January 1 next year, the Eurasian Economic Commission will begin work and the package of international agreements on the Common Economic Space between Belarus, Kazakhstan, and Russia will enter into force. Our countries have made a commitment to try to complete all of the internal procedures required for the Treaty on Eurasian Economic Commission, signed today, to enter into force by the end of the year. In order to set a good example I will take the simple step now of sending the treaty to the State Duma. Right here and now before you I sign this letter to the Speaker of the State Duma proposing the treaty’s ratification. 

The big priority for us now of course is to ensure free movement of goods, services, capital, and labour throughout our three countries, and work towards eventually carrying out coordinated currency and macroeconomic policy too, which was also something we discussed today. Since the Customs Union began work it has already boosted our economies’ investment attractiveness and is encouraging economic modernisation, which is a paramount goal in today’s world. 

The next step (clear to all) is the establishment of the Eurasian Economic Union by 2015. We discussed this too, today. If the conditions are right we will move quicker where possible. We will not run ahead of ourselves and take hasty or excessive steps, but where the opportunities exist we will move ahead faster.

We agreed today for the first time on establishing a supranational body, neutral with respect to all three countries, to which we will delegate increasing powers. This is a decision of major significance. 

“Some of our partners in the Eurasian Economic Community and the CIS are showing interest in this new integration organisation. This proves that the trend towards multilateral cooperation on an equal and mutually advantageous basis is gathering strength.”

I particularly stress that the [Eurasian Economic] Commission’s decision-making mechanisms completely exclude the possibility of any one country dominating over another. This is a body in which all are equal. It will work effectively I hope, on the basis of market-based and democratic principles, and I hope it will draw too on the best of integration practice and experience around the world. 

Life shows us that our multifaceted cooperation offers us a vast common resource, and this explains why some of our partners in the Eurasian Economic Community and the CIS are showing interest in this new integration organisation. This is good to see. It proves that the trend towards multilateral cooperation on an equal and mutually advantageous basis is gathering strength. We are open to all of course, open to everyone who realises the advantages we gain by pooling our potential, and we will work in this direction too, on the basis, of course, of the internal rules and regulations that we have only just adopted. 

In short, I can say that this meeting was very important and lived up to our fullest expectations. We know how to reach agreements, know how to listen to each other, and know how to work out compromises. We have a genuinely positive spirit and working commitment. All of this guarantees that our economies’ integration, the integration of the Russian, Belarusian, and Kazakhstani economies, will continue to develop successfully in the interests of our countries and peoples.

Thank you.

* * *

Question: I have a question for the presidents of Russia and Kazakhstan.

Mr Medvedev, you have said before that the European Union is the prototype for the integration projects you are pursuing. But along with its many positive aspects, the European Union is now going through a serious economic crisis. Do you not fear that the Eurasian Union could also encounter similar problems on its road?

Mr Nazarbayev, in 1994, you announced the idea of creating a Eurasian Union of countries. In what ways does what we see today differ from what you envisaged back then?

Dmitry Medvedev: I do not have any particular fears. Our union is the result of long and careful consideration. Mr Nazarbayev listed a number of the world’s various integration groups just now, and Mr Lukashenko and I spoke about this too. Each group has its strong points and also its particular internal problems. There are not many real economic integration groups and unions in the world though. The European Union is certainly one of them, and in my view, despite the difficulties the EU and the Eurozone are going through today, it is nonetheless a very successful union that has made it possible to create a huge common market and raise a number of EU member countries that were only very middling in their development to a decent development indeed through integration and mutual help and support. I am not even referring here to the euro, which currently faces problems.

But let me repeat something I have said at the G20 meetings and other gatherings: if it were not for the euro, I do not know how the world would have coped with the crisis that broke out in 2008 if the dollar had been the only reserve currency. The euro’s current problems arise from the fact that it serves as the currency not just in stronger economies but also in substantially weaker economies or in economies in which particular problems and poor management have created difficulties.

We can avoid such problems in our integration. First, we are aware of what we are doing and know exactly who is becoming part of this Eurasian Economic Union and part of the economic space we are building. This is not some collection of disparate countries, whether the countries using the euro as a currency or the 27 EU members, but for the time being is a grouping of three countries, three countries that share a common history and past what’s more, and are developing along similar lines because we are all in the process of forming a new economy. We are fast-growing economies, even with the problems that our countries face. We are starting out not from different levels, but from a similar departure point, even though we realise at the same time that Russia’s economy is bigger than those of its partners.

But this is our conscious undertaking, and we know who the members of this union are. I do not want to say too much about the European Union, but in some respects they took on board unknown quantities. We are not in this situation. I am therefore confident that we will build a solid, effective and dynamically developing economic union. We have all the right conditions for doing this. As for future new members of our union, as I said, we are open, but this does not mean that any country, even from among our close partners, can simply join tomorrow. As Mr Lukashenko very rightly said just now, a work map should be drawn up for each prospective new member, a programme for accession, and this process might take place over a year or two, or maybe over 10 or 15 years, in order not to violate our economic interests and the interests of our union, of common space, and our future union, and also in order not to create difficulties for the prospective members. We will proceed carefully and take the European Union’s experience into account.

President of Kazakhstan Nursultan Nazarbayev: In my article in newspaper Izvestia, I gave a detailed account of the history of my proposal to create the Eurasian Union, an idea that goes back to a speech I gave at Moscow State University in 1994. That was a time of collapse, a time when what had been a single country fell apart. We were all fragments of that whole, like pieces of a shattered plate. The result was complete stagnation. It seemed to me then that we were to make use of the things we had built up over those decades, the shared mentality and common economy, to somehow save our ordinary people from disaster.

Despite the years that have passed, my view has not changed. Any integration project begins above all with creating a common free trade zone, then a customs union, then a common economic space, and finally, an economic union with the eventual possibility of a common currency. This is the classic road that we are taking. We have established a free trade zone and a customs union, and we are now creating our common economic space. Most important of all is to give this economic space the full power and capacity it requires to get everything developing effectively, macroeconomic indicators and everything else, and then we can start putting the union in place. 

Perhaps this is running ahead somewhat, but we discussed too, today, the possibility of moving over to conducting settlements in our own currencies when it comes to big trade deals, using the Kazakhstani tenge, the Russian ruble, and the Belarusian ruble between ourselves instead of the dollar. We buy dollars in order to settle accounts with Russia when we could do this using the tenge or the ruble. In other words, we are only at the start of all the possible exchanges we can conduct. Indeed, I envisage in the future establishing a common defence space (we have the CSTO working on this), a common technological space, common electricity networks (as we used to have), and a common resolution of food supply issues. We have been blessed with no shortage of energy supplies, at any rate.

All round, this is a very powerful grouping that brings together 170 million people: 144 million in Russia, 16 million in Kazakhstan, and more than 10 million in Belarus. With a population of 170 million this is a market with the kind of self-sufficiency to get by on its own if the need arise. This is what we are working towards, what we are proposing, and everything is moving in the right direction.

Question: I have a question for the President of Belarus.

The principles, the mechanisms laid into the foundation of Eurasian integration also exist and are largely applied in the Allied State of Belarus and Russia. Perhaps, going ahead, I would like to clarify, could this project, the Allied State, dissolve within this larger project, the Eurasian Economic Union? Will the practical purpose of the Allied State be maintained? Thank you.

President of Belarus Alexander Lukashenko: The Allied State project may dissolve, if we do not progress or fail to develop the Allied State of Belarus and Russia project, while this current project, the Common Economic Space, moves forward very quickly. Then, perhaps, the Common Economic Space will become as integrated as Russia and Belarus currently are. And then, we will have the right to ask ourselves whether we need a parallel Allied State, as we are currently calling it.

But for now, the situation is such that the Allied State has advanced significantly, even given all the shortcomings in our efforts, and the degree of integration is quite high. Suffice it to state the clear fact that when shaping the regulatory and legal framework of the Customs Union and then of the Common Economic Space, we employed various elements from our experience of building the Allied State.

Moreover, I have already said that the Common Economic Space is our very important brainchild in the economic sense, financially, etc. But the Common Economic Space, which we are designing now, or the Customs Union, they are still far from the degree of integration that we have in the Allied State. For example, currently we draft joint balances for energy and food supplies and many other positions, as Russia’s Economic Development Minister present here may explain in more detail.

The citizens of the Russian Federation and Belarus have absolutely equal rights; we do not have any borders. If you go to Minsk or Moscow, you won’t find any border patrol on the way from one to the other, nobody will stop you. [Prime Minister] Viktor Chernomyrdin and I, supported by the first President of the Russian Federation, removed all border control formalities back in 1996 or even 1995 so now Russia and Belarus don’t have that.

Today, within the framework of [the Allied State of] Belarus and Russia, we are coordinating not only domestic policy, but foreign policy issues as well. Recently, a joint council of our foreign ministries had a meeting in Moscow which produced good results. Incidentally, joint councils are set by all ministries and agencies.

We also have a common defence space and have well advanced in that respect. We have a common air defence system which is managed from one command centre and, God forbid, in case of a conflict or war, will be employed. So we have gone quite a long way in this respect.

Yes, at a certain stage, we may have slowed down a bit, due to some objective and subjective causes, still, I should say, all these efforts were not in vain. You must have heard the term of varied degree integration which the Prime Minister of Russia mentioned in his article and Mr Medvedev has referred to on numerous occasions (which I know since I follow the meetings he has as part of electoral campaign), and which we in Belarus also use. This is not just a term; this term resulted from essential efforts and achievements within the Allied State, the Common Economic Space, the Customs Union, EurAsEC, the CIS, and so on.

Is there any point to abandon the current varied degree integration and leave it behind? Certainly not. After all, speaking in economic terms, let all these projects compete.

A journalist asked a question here about the European Union. She asked the President of Russia if the Eurasian Union may face the same problems as the European Union. You know, if you were referring to Kazakhstan, then I don’t think it will ever happen, since Kazakhstan has everything it needs, same as the Russian Federation – natural gas, oil, well advanced new modernised enterprises or even the generally modernised economy. The plan that the President is currently implementing in Kazakhstan deserves a great deal of praise.

And if you were referring to Belarus, there is no point to worry either. Fortunately, Belarus has a very diverse economy which does not overlap with that of Kazakhstan or Russia, and the goods produced in Belarus are in demand in Russia and so our trade with the Russian Federation will reach some 35 billion dollars this year.

Dmitry Medvedev: That is a high figure.

Alexander Lukashenko: It’s huge, particularly for a nation of 10 million.

Dmitry Medvedev: Our turnover with the United States is lower than our turnover with Belarus.

Alexander Lukashenko: That’s right. For example, we are selling food products to the Russian Federation. Russia is our market. In four years, we will have seven billion dollars in food product sales in all markets, with Russia holding the greatest share. This year, we will sell [to Russia] 4 billion worth of food products, even a bit more.

Seven years ago, we were afraid that we would have nothing to eat for ourselves. Today, we have modernised agriculture and advanced a great deal and can satisfy the domestic needs and export agricultural products making some $4 billion. Our exports are in demand.

Let’s look at oil, oil refining, etc. Recently, we agreed with Russian officials when discussing bilateral trade that this year we will supply up to 40 thousand tonnes of high-octane gasoline, which the Russian Federation is currently lacking, because we were able to modernise our oil refineries including this particular segment. In the future, we will maintain supplies to the Russian Federation. We will be able to refine up to 30 million tonnes of crude oil at least, as opposed to 21 million tonnes today, and produce high-octane gasoline for the Euro-4, Euro-5 and other engine systems, for all your Mercedes and the other cars driven here.

Dmitry Medvedev: Those aren’t ours.

Alexander Lukashenko: They are Russian since they are purchased by Russia, so they are yours.

So don’t worry about Belarus. You in Russia do have a tractor production industry, but you nevertheless buy our tractors too. You have good combine harvesters, but you still buy ours as well. So the fruits of our economy, our products, are in demand in the Russian Federation.

As for Kazakhstan, we are participating in its modernisation through 30 programmes, thanks to my friend Mr Nazarbayev, by supplying products from Belarus. So if we cooperate rationally, as equals, as we currently do, believe me, we will only grow closer. Our economies will push us toward closeness, and nobody will be freeloading off of anyone else. Russia, Kazakhstan and Belarus are capable of earning the means to get what we need for our people to live and exist normally.

Question: I have a question for all three Presidents, or whoever wishes to answer, on the Common Economic Space. What are your specific expectations with regard to this project, how much the integration between our countries will broaden and how, specifically, this will influence the lives of average people?

Nursultan Nazarbayev: That is the main thing we have been discussing today.

We, the Presidents, are elected by our peoples. Our main objective is to improve the well-being of our citizens. After all, developing the economy is not an end in and of itself. The goal is to improve people’s lives. The economy earns money so that people gain these benefits. That is precisely why we are doing all this. We are opening the market. In the last decade, before the crisis, Kazakhstan was developing at rates of about ten percent. This year, we will end at 7.5 percent. Without these rates, the economy does not grow. The economy is producing goods and hence growing. Where are these goods going? We supply these goods to 16 million people [of Kazakhstan]. Where do we go next? The markets we are opening to one another by removing customs barriers, obstacles to the free flow of capital, labour force, and so on will boost the growth of all three economies and result in improvement in our people’s living standards. So the question is well put. That is what our integration is all about.

Dmitry Medvedev: I think Mr Lukashenko and I don’t really have anything to add, but I would nevertheless like to say a couple words about what our integration, economic community, and the Eurasian Economic Union will bring to our peoples.

You know, good times are no tests. When economies are growing, when the domestic market is hot, when there are various major economic projects pushing the economy forward, one would not know how strong the economy is. Economies are tested during the times of crisis; weaknesses are revealed during crises.

Let’s look at what happened in Russian economy, for example. I won’t talk about our friends, so as not to make them uncomfortable. We in Russia have an export-oriented economy. This is mostly good, but less so in certain situations, because if exports are falling, prices drop and then the economy immediately starts to weaken. What can be done? Either the exports should be redirected to other consumers which is not always possible, or the domestic market should be expanded. And this is the point at which we are focussed today.

First of all, our export opportunities within our now-enlarged economic space are growing. Second, if we are talking about the domestic market, then our goal is to create a major common domestic market that will be less susceptible to crisis fluctuations and better protected against a crisis wave which may at some moment come. Let’s see what happened in 2008 and 2009 when self-sufficient countries with large domestic markets did not feel the blow of the crisis as much as others. India is a good example.

Nursultan Nazarbayev: So is China.

Dmitry Medvedev: The example of China is less evident since they have enormous exports and an export-oriented economy which is so huge that the crisis was a challenge for China as well. But if the domestic market is well-developed, then a country can overcome any problems and hence the lives of average people in our states will be more stable and predictable, less susceptible to fluctuations in global economic processes. Maybe 20 or 30 years ago it was not evident, but now it is clear to everyone that once foreign markets are shaken then trouble will surely come to your domestic market. Therefore our goal is to make our domestic market stable, and today we have made a great step in that direction. I would like to once again congratulate everyone on this feat.

Alexander Lukashenko: Mr Medvedev said it very well, with regard to macroeconomics. I do not want to add anything, I will just say one thing to the average citizens to show that this is advantageous.

Nobody can argue against the fact that our integration is leading to an increase in trade; nobody is arguing this, and we can see such increase in practice. An increase in trade means an increase in production. How can trade grow? Not through higher prices only. Indeed, these days one can hardly expand trade by increasing prices. Rather, trade is growing on ever greater production. And since the production is growing, than the people involved in such production would make more money, even at stable prices. This means we are on the right path as far as advantages for ordinary people are concerned. More goods produced mean higher salaries.

But most importantly, this will remove a number of conflicts and misunderstandings between us, and ultimately, do away with any milk wars, sugar wars and any other wars between us. We have declared free movement of goods, services, capital and labour force and have practically ensured relevant conditions. Isn’t this done for the benefit of our peoples? Of course it is. The facts speak for themselves.

November 18, 2011, The Kremlin, Moscow