Customs Bloc First Success in CIS Integration – EBRD

The Customs Union of Russia, Kazakhstan and Belarus is the first successful example in regional economic integration between countries of the former Soviet Union, the EBRD said in a report on Wednesday.

“Removal of customs barriers between three CIS states has eased trade between the three economies, despite size differences,” the report said.

Russia, Kazakhstan and Belarus agreed to establish the Customs Union in November 2009. In November 2011 the Russian, Belarusian and Kazakh presidents signed a declaration on Eurasian economic integration, aimed at eventually creating the Eurasian Economic Union, which will be based on the Customs Union and common economic space among the three countries.

“While many benefits of the union remain to be seen, it is clear that common tariffs and reduced non-tariff barriers are affecting trade both internally, between the three members, and externally with the rest of the world,” EBRD economists said, adding potentially the union could bring further benefits such as improved cross-border infrastructure and strengthened institutions.

Previous attempts towards economic integration in the post-Soviet space, such as a free trade agreement between member countries of the Commonwealth of Independent States (CIS), a loose association of former Soviet republics, except for the Baltic states, created little actual integration, the EBRD said.

“However, the Customs Union has in fact introduced mechanisms of trade integration, particularly by lowering non-tariff trade barriers… Since the creation of the union, trade among the three countries has doubled. The increase has been caused mainly by post-crisis recovery, but also by reducing non-tariff barriers and to some extent by common tariffs.”


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