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. Last Updated: 07/27/2016

Putin Plans 4-Nation Free Trade Zone

Itar-TassPutin speaking with Lukashenko, center left, Kuchma and Nazarbayev by the Kremlin wall after signing the trade pact on Sunday.
President Vladimir Putin and the leaders of three other former Soviet republics signed a joint declaration Sunday putting forth their intention to take regional economic cooperation a big step forward and create a free trade zone.

The declaration said the move was motivated by the desire to raise the standard of living in the region and by the need for sustained development. Belarussian President Alexander Lukashenko put it more bluntly, saying that the four nations' goods weren't needed anywhere outside the region.

"We are taking concrete steps to protect our markets, to protect our states," Lukashenko told reporters in the Kremlin. "We understand that we are of no use to anyone except our own countries and peoples and will defend out markets in any way that we can."

All four countries have struggling manufacturing sectors and only slightly less troubled agricultural spheres. Ukraine and Belarus have not succeeded in following other former Soviet republics, such as the Baltics, in reorienting their markets toward the European Union; they are unwilling to either do away with widespread subsidies or take on the political and market reforms necessary to be welcomed into the European club.

If they are to enjoy the benefits of big markets at all, they'll have to turn to Russia, the biggest economic power in the region. But the establishment of a wider market embracing all four countries will require legislative amendments and the abolition of tariffs that in some cases are quite high, such as Russia's measures to prevent the dumping of highly subsidized Ukrainian pipes.

All four countries already belong to myriad organizations established over the past decade to promote integration in the former Soviet Union. But those organizations have been largely ineffective, said Kazakh President Nursultan Nazarbayev.

He said that instead of increasing trade, Kazakhstan last year had seen a 12 percent drop in trade with Russia and a 23 percent decrease in trade with Ukraine. In spite of their membership in a number of trade-promoting organizations, he said, Kazakhstan-Belarus trade was just beginning.

"I would like to hope this is a completely new breakthrough in our relations," Nazarbayev said.

In their declaration, the four leaders said that an agreement to form the free trade zone would be ready by September. By that time, their governments should have negotiated common economic policies, harmonized legislation and created an interstate commission on trade and tariffs, the statement said.

Putin, perhaps mindful of regional fears of Russian domination, said that the commission would be based in Kiev and headed by a Kazakh official. He also said that other interested members of the Commonwealth of Independent States, a loose grouping of former Soviet republics, would be welcome to join.

All stressed that the body was not intended to replace the CIS.

"I do not under any circumstances want to give the impression that we are creating a new four-strong body within the CIS," Ukrainian President Leonid Kuchma said. (AP, Reuters)