Russia’s Putin says customs union delayed

* Russia, Belarus, Kazakhstan customs talks fail

* Putin says will not abandon idea, wants to speed up work

By Dmitry Sergeyev

MOSCOW, May 22 (BestGrowthStock) – Russia’s planned customs union
with neighbouring Belarus and Kazakhstan will not fully come
into effect from July as planned, Prime Minister Vladimir Putin
told Mir TV in an interview on Saturday.

The customs union was envisaged as a first step on the way
for the three former Soviet republics and allies of Moscow to
create a free trade area, or single economic space, by 2012.

From July 1, they were meant to adopt a common external
tariff and start redistributing the duties they collect.

“This is correct. It cannot come into full force,” Putin
told an interviewer who asked him whether the project would take
full effect in July, after talks on it failed on Friday during a
meeting in St Petersburg.

A Russian source had earlier told Reuters that finalising
the union could be delayed beyond July. [ID:nLDE64K202]

Russia had pursued the project with fresh interest after
putting talks to join the World Trade Organisation (WTO) on the
back burner after more than a decade of wrangling.

But Moscow has recently renewed interest in the WTO talks
and said earlier this year it would no longer insist on joining
the WTO in a joint bid with Kazakhstan and Belarus, suggesting
the customs union might not have the same priority as before.

Putin gave no sign Russia would abandon its bid to create
the common economic space with neighbours, saying he wanted to
speed the process up, despite the hitch with the customs union.

“I have proposed today to accelerate solving the problems
linked to a creation of a single economic space,” Putin said,
according to a transcript of the interview published ahead of
the broadcast on the government website.

Instead of negotiating all the required documents by the end
of next year, Putin said he wanted the whole process finished by
the end of this year.

Now oil duties are holding the union back as Russia has
refused to abolish export duties on oil it sells to Belarus,
something analysts say Minsk had wanted and had seen as the key
reason to join the pact.

Russia has also accused Belarus of not paying enough for gas
deliveries and amassing debts while Belarus wants to pay less
for oil and gas if Moscow is serious about developing closer
ties with Minsk. [ID:nLDE64K0JG]

“They unilaterally pay us the 2008 price. They underpay us.
There debt is accumulated. But this is still a problem between
economic entities (corporations) and I hope the problem will be
solved at that level,” Putin said.

At the beginning of the year Russia and Belarus were
involved in a month-long oil supply row that had threatened to
disrupt oil flows to European Union members Germany and Poland.

Stock Research
(Editing by Maria Golovnina)

Russia’s Putin says customs union delayed