Customs Disunion

Putin's Plans for Regional Integration Go Boom

A commemorative coin minted in Russia to mark the recent accession of Crimea to the Russian Federation.
A commemorative coin from the series "The Gatherer of Russian Lands," which was minted in Russia to mark the recent accession of Crimea into the Russian Federation, May 6, 2014. (Andrei Romanov / Courtesy Reuters)

On April 29, after months of anticipation, the presidents of Kazakhstan, Belarus, and Russia met in Minsk to put the finishing touches on the Eurasian Economic Union (EEU), an ambitious plan to unite into a single economic entity. Observers from Washington to Moscow expected this meeting to be the last step before the official signing of the EEU treaty in May. But something went wrong.

Statements released just after the summit hinted at trouble. “If we are not ready to do it now,” Aleksandr Lukashenko, the president of Belarus, remarked, “we should openly admit it.” A few days later, Nursultan Nazarbayev, the president of Kazakhstan, noted that he was not in favor of “quick decision-making” about the union. In reality, both have acted increasingly wary of binding themselves too tightly to Russian President Vladimir Putin and his regional agendas.

The diminishing commitment of former Soviet Union countries to regional integration is a little noticed but critical side effect of Western sanctions on Russia. Russia remains the economic linchpin of the region, and costs imposed on the country are trickling down to Belarus, Kazakhstan, and beyond. In turn, post-Soviet leaders have started to reevaluate the wisdom of further integration with Russia. Sanctions may not stop Russia’s destabilization of Ukraine, but Western policymakers should embrace them for another reason: because they can put a nail in the coffin of the project that started the Ukraine crisis to begin with -- Eurasian integration.

IRRATIONAL CHOICE

On January 1, 2010, the Eurasian Customs Union, between Belarus, Kazakhstan, and Russia, went into effect. There have been a variety of such schemes since the Soviet Union’s collapse in 1991, but the Customs Union is the first to be meaningfully implemented. The three countries imposed a common external tariff and removed physical border controls for trade between their countries. Russia dominates the union economically and institutionally. It accounts for 63 percent of the union’s internal trade and holds 57 percent of the votes in the Customs Union Commission.

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