Vladimir Potapov

Russia has vigorously started creating a Common Economic Space, which was agreed upon by Presidents of Russia, Byelorussia, Kazakhstan and Ukraine. They signed an agreement on this score late last winter in the Kremlin. As Ukraine’s President and the Chairman of the CIS Council Leonid Kuchma said, the agreement to establish the Common Economic Space should already be prepared by September 2003.

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he four CIS republics are to work out "a coordinated economic policy in a number of areas, to harmonize appropriate laws and set up a single intergovernmental independent regulatory commission on trade and tariffs". The ultimate goal is to create an organization of regional integration covering the territory between Poland and China. To this end the participants appointed a joint high-level working group headquartered in Kiev and approved its credentials. President Nazarbayev was elected head of the group.
As Russia’s Vladimir Putin explained, the organization being created by Russia, Ukraine, Byelorussia and Kazakhstan was open "to other interested parties that would like to join in". The four presidents also assured that the new community would not become an alternative to the Commonwealth of Independent States (CIS). In the words of Leonid Kuchma, this initiative was aimed not at setting up just one more bureaucratic body within the CIS but at creating a common economic space "to be managed by a single organization instead of many".
It is true that Russia, Ukraine, Byelorussia and Kazakhstan are now entangled in a rather complicated system of integration agreements. All of them are members of the CIS. Besides, Russia and Byelorussia have been trying to build up a union state and along with Kazakhstan both states are members of the EuroAsian Economic Community (EURASEC), which Ukraine did not join in.
Each of the CIS member countries is experiencing considerable economic and political difficulties solving their domestic problems. That is why their leaders from time to time raise the idea of integration as a way of solving their domestic problems. They are also motivated by the desire to secure the support of their countries’ population much of which still regrets the breakup of the Soviet Union. One should also keep in mind that during the referendum on the future of the USSR conducted on March 17, 1991, over 76% of its participants supported the idea of preserving the united country. Even today, 12 years later, citizens of the former Soviet republics are feeling nostalgic for the lost common homeland and are tending to support any initiative to restore traditional economic and humanitarian ties. Unfortunately, people still have not had a chance to see any practical results of such initiatives. But this time around, as these four Presidents insist, everything will be different. What exactly makes them feel optimistic?
As Russia’s Minister for economic development and trade Herman Gref sees it, the new initiative of the four presidents is distinguished by the very fact that it is based more on economy than on politics. Participants of the future alliance are even providing for setting up a supranational economic regulatory body, the one that the CIS member countries have been so afraid of up till now. The pragmatic approach to the mutual opening-up of national markets may turn out to be more effective, though no less complicated, than arranging a political dialogue.

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The Commonwealth of Independent States (CIS) was established on December 30, 1991. In their adopted declaration member countries announced their interaction on the principles of sovereign equality. At present, the CIS incorporates 12 states: Azerbaijan, Armenia, Byelorussia, Georgia, Kazakhstan, Kyrghyz Republic, Moldavia, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine. In September 1993 heads of the CIS member countries signed the Treaty on creating Economic Union with a view to forming a common economic space. On April 15, 1994, the CIS Summit adopted the Agreement on establishing a free trade zone within the Commonwealth.

Gref particularly stressed that the presidents assumed personal responsibilities for establishing a new organization. In fact, in 2003 there should be drafts of an agreement worked out, which is to provide for a freer flow of goods and services across the four countries. Experts from these states will study not just tariff caps on importing goods, problems of integrating banking systems, transference of labor force but also possible protective measures against dumping and unfair competition. People at Russia’s Ministry for economic development and trade feel confident that they will manage to discuss with their colleagues every single trade issue by September. But it goes without saying that harmonizing interests of all sides will not be a simple matter. Recent trade conflicts around shipments of metal rolled products, motor vehicles, sugar beet and so on are a good reminder in this respect.
The Commission on trade and tariffs that is being created should unify foreign trade laws of Russia, Ukraine, Byelorussia and Kazakhstan since, otherwise, all talks about a common economic space will just lose sense. Of a particular importance is a single customs-and-tariff policy taken into account an accession to WTO, which is the goal of all agreement participants.

The Euroasian Economic Community (EURASEC) is an international economic organization empowered with functions related to forming common external customs borders of its member countries, working out a single foreign economic policy, tariffs, prices and other components of the common market mechanism. On October 10, 2000, heads of Russia, Byelorussia, Kazakhstan, Kyrghyz Republic and Tajikistan signed in Astana the Treaty on Establishing the Euro- asian Economic Community.

Re-integration attempts by the CIS member countries are closely followed both in Europe and the U.S. Vyachaslav Igrunov, the deputy chairman of the Russian Duma’s committee on the CIS and ties with compatriots living abroad believes that "Europeans, particularly such countries as France and Germany, are afraid of total dominance by the U.S. and feel the need for some counterbalance". But at the same time the EU is not interested in getting a powerful economic union instead of separate post-Soviet states, which today serve both as suppliers of cheap resources to Europe and consumers of European goods. Activities of Moscow and its partners are also a cause of ambiguous feelings in the U.S. On the one hand, there is still a historic legacy of the half-the-century-long global confrontation and any attempt to re-integrate is often looked at as a ghost of the former Soviet superpower. On the other hand, Washington cannot ignore new challenges. Like strengthening of China, which is quite capable of becoming a dominant force, first, on the Eurasian space and, then, in the world as a whole.
As far the presidents of the four CIS member countries are concerned, their political will is declared quite clearly. As experts think, exactly this objective fact will help the Commission on trade and tariffs avoid being amorphous as is the case now with the Euroasian Economic Community or the Customs Union of Russia and Byelorussia.
It is too early, of course, to speculate about the future of the Common Economic Space spanning from Poland to China. But it is worth recalling that the unification of Europe also started just with signing the General Coal and Steel Agreement by six West European states...