Even as Russia seeks to deepen and expand trade alliances
in the face of economic isolation from the West, the unilateral trade
restrictions that Moscow unleashed last week show just how far its
Customs Union is from a genuine economic alliance, analysts said.
Russia last Thursday unilaterally banned deliveries of meat,
poultry, fish, cheese, milk and dairy products from the European Union,
the United States, Australia, Canada and Norway in retribution for the
countries' sanctions against Russia over its policy in Ukraine.
But Belarus and Kazakhstan, Russia's partners in the Customs
Union and its common economic space, have laid down no restrictions
on imports from Europe — and do not seem to see any contradiction.
Following the ban, Belarussian President Alexander
Lukashenko said his country can continue to buy European fruit
and delicacies for the domestic market as before. A spokesman for Kazakh
President Nursultan Nazarbayev said the ban was Russia's unilateral
decision and not meant to involve other members of the Customs Union.
Technically, the food ban does not violate any of the
union's rules. But while Russia's partners may not mind this drastic
departure from a united economic line, the food bans undermine the very
concept of a united customs zone, according to Alexander Knobel, head
of the international trade laboratory at the Gaidar Institute.
"The idea behind the Customs Union is that there should be
one agency that regulates these issues, as is done in the EU," Knobel
Despite numerous disagreements, the European Union has moved
as one in its sanctions against Russia over the crisis in Ukraine. As
for Russia's food bans, the 28-state bloc is already in discussions
on how to soften the impact for the countries most affected.
But even as the duress of international politics show that
the Russia-led Customs Union lives more on paper than in reality, Moscow
is luring more states into the zone and its planned successor,
the Eurasian Union, with gas deals and wads of cash.
On Monday, Kyrgyz President Almazbek Atambayev confirmed his
country's intention to join the Customs Union by the end of this year —
earlier than had been expected — following a meeting with Russian
President Vladimir Putin. Russia earlier promised Kyrgyzstan $1.2
billion in return for its agreement to join the union.
Meanwhile, Russian Foreign Minister Sergei Lavrov said
Monday that $500 million will be transferred to Kyrgyzstan to develop
its economy in return for agreeing to join the more intensively
integrated Eurasian Union, which Russia is developing with Customs Union
members Belarus and Kazakhstan.
Built on the three countries' previous economic agreements,
the European Union envisages the gradual integration of the former
Soviet countries' economies, including free trade, unhindered financial
interaction and open labor migration.
Armenia, which was expected to join the union in July but
has not yet reached a final agreement on the terms, is also receiving
substantial incentives from Russia. Armenia's gas duty was canceled
in the beginning of this year, reducing the price it had to pay for fuel
by 30 percent.
But adding more members alone will not give the Customs
Union more bite, nor does the current situation offer much hope for a
united economic front under the Eurasian Union.
"The more the reality drifts away from this concept,
the less likely it is that the idea behind the Customs Union will
finally be realized," Knobel said.
Even as its long-term objectives come into the question,
the Customs Union is facing an immediate threat from Russia's food bans:
Belarus and Kazakhstan could potentially profit off the restrictions
by re-exporting banned products onto Russian territory.
Such activity would "threaten the future of the Customs
Union," and Belarus and Kazakhstan are bound to know it, said Julian
Cooper, professor at the Centre for Russian and East European Studies
at University of Birmingham.
"There will be no problem identifying the origin of most
packaged food products, but difficulties could arise with some more
general goods like rice and flour, where tracing the country of origin
is clearly more difficult," he said.
Belarus and Kazakhstan are likely to stave off such re-exporting to avoid the consequences for the union, Cooper added.
This week, Lukashenko said that he would support Moscow's
import bans by clamping down on the transit of banned goods, following
a telephone conversation with Putin.